Taiwan Semiconductor Manufacturing Company (TSM) is down after reporting a sharp jump in first-quarter profit while simultaneously flagging new cost and supply-chain uncertainties tied to the Iran war. The market reaction reflects a classic “good numbers, higher risk” setup: results and AI demand look strong, but investors are repricing near-term margin and execution risk as geopolitical disruption raises input and logistics costs and the company keeps spending aggressively to expand capacity.

TSMC reported Q1 net profit of 572.5 billion new Taiwan dollars (about $18.1 billion), up 58% from a year earlier, and guided April–June quarter revenue to $39.0–$40.2 billion. Management also warned the Iran war is pushing up supply-chain costs and disrupting access to chipmaking inputs such as helium, even as the company said it has built safety stock and does not expect a near-term operational hit.

The selloff appears driven by forward-looking concerns: higher risk premium from geopolitical disruption, and the possibility that cost inflation and overseas expansion dilute profitability even in a strong AI cycle. TSMC also indicated 2026 capital spending is likely to land toward the higher end of its $52–$56 billion plan, reinforcing near-term cash burn and depreciation headwinds that can pressure margins despite robust demand.