Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) sparked a broad rally in semiconductor equipment stocks on Thursday after unveiling sharply higher capital spending plans and a bullish revenue outlook for 2026.
Shares of major chip equipment suppliers surged following the announcement. Lam Research (NASDAQ:LRCX) jumped 7%, Applied Materials (NASDAQ:AMAT) climbed 8%, KLA Corporation (NASDAQ:KLAC) rose 6%, and Teradyne (NASDAQ:TER) advanced 3%.
TSMC said it expects capital expenditures of between $52 billion and $56 billion in 2026, well above analysts’ consensus estimate of roughly $46 billion. The company also noted that spending over the next three years will be “significantly higher” than the $101 billion invested during the previous three-year period, while forecasting revenue growth of close to 30% in 2026.
The upbeat outlook from the world’s largest contract chipmaker lifted sentiment across the wider semiconductor space. NVIDIA (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) each gained about 1%, while Broadcom (NASDAQ:AVGO) rose 2%.
Memory-related stocks also moved higher, with Micron Technology (NASDAQ:MU) up 3%, Western Digital (NASDAQ:WDC) adding 3.6%, and Seagate Technology (NASDAQ:STX) gaining 2%.
TSMC’s aggressive investment plans underscore confidence in sustained demand for advanced chipmaking capacity, particularly as artificial intelligence workloads continue to drive the need for more complex and powerful semiconductors.
Taiwan Semiconductor stock price