TSMC posts record Q2 and boosts U.S. investment

Taiwan Semiconductor Manufacturing Co. (TSM) delivered record results for the second quarter, with net profit rising 77% year-on-year to NT$706.6 billion. Revenue for the April–June period reached NT$1.27 trillion, representing about a 36% increase from a year earlier, or roughly US$40.2 billion. The performance marked a significant acceleration in both top-line and bottom-line growth within a single quarter.

Net profit exceeded an LSEG SmartEstimate consensus of NT$632.6 billion, highlighting the scale of the earnings surprise. The company also reported that its second-quarter gross margin improved to about 67.7%, coming in above its prior guidance range. This margin expansion underscored the profitability of its most advanced technologies and services.

TSMC attributed the strong quarterly performance to surging global demand for advanced AI processors and high-performance computing chips. Demand was particularly strong for 3-nanometre and ramping 2-nanometre process technologies, which serve leading-edge computing applications. The company also highlighted robust uptake of its advanced packaging offerings, including CoWoS solutions used in high-performance computing.

The combination of advanced-node wafer capacity and specialized packaging positioned TSMC to capture a large share of the AI-related build-out in data centers and other infrastructure. This demand helped drive both higher revenues and better-than-expected margins in the quarter.

Alongside its earnings, TSMC pledged an additional US$100 billion of investment in Arizona. The new commitment is intended to fund several logic wafer fabrication plants for 2-nanometre and below technologies, as well as advanced packaging facilities. With this pledge, the company’s total planned investment in the United States rises to about US$265 billion.

The Arizona expansion is aimed at building out production and packaging capacity for leading-edge process nodes, supporting customers that require onshore manufacturing for critical AI and high-performance computing chips. The scale of the investment underscores the central role of advanced process technologies in TSMC’s growth strategy.

TSMC also raised its 2026 capital expenditure budget, indicating further investment in advanced manufacturing capacity. The company now plans to spend between US$60 billion and US$64 billion in 2026, up from previous guidance of US$52–56 billion. This planned increase reflects ongoing preparation for sustained demand for cutting-edge chips.

The higher capex outlook, combined with the enlarged Arizona program, signals a multi-year build-out of production, particularly for 2-nanometre and more advanced technologies and related packaging. Management indicated that the AI-driven surge in demand is a key factor behind both the robust current results and the enlarged investment plans.