TSMC’s second-quarter net profit soared 77% and it announced an additional $100 billion investment in Arizona
Net profit surged by 77.4% year-on-year, and the month-on-month growth rate exceeded 23%; both revenue and net profit exceeded market expectations. The company gave third-quarter revenue guidance range of US$44.6 billion to US$45.8 billion. Demand for AI chips continues to be extremely strong, and the company has raised its full-year capital expenditure for 2026 to US$60 billion to US$64 billion. On July 28, 2023, the TSMC logo was seen at the opening ceremony of the TSMC Global R&D Center in Hsinchu, Taiwan. TSMC, the world's largest wafer foundry, announced its second quarter 2026 financial report on Thursday. Net profit surged 77.4% year-on-year. The performance significantly exceeded market expectations, and the company's performance continued to set new historical highs. TSMC’s second quarter results vs. Refinitiv’s market consensus expectations (LSEG SmartEstimates, weighted by long-term accurate analyst forecasts) Revenue: NT$1.27 trillion (equivalent to US$39.45 billion), market estimate of NT$1.264 trillion Net profit: NT$706.56 billion, market estimate of NT$632.64 billion Wei Zhejia, chairman of TSMC, said: "Demand related to artificial intelligence is still extremely strong." The company gave third-quarter performance guidance: revenue of 44.6 billion to 45.8 billion U.S. dollars, and operating profit margin range of 56%-58%. Wei Zhejia added that in order to meet the strong order demand from U.S. customers, TSMC will invest an additional US$100 billion in Arizona, raising the total investment in local projects to US$265 billion. "The additional funds will be used to build at least multiple logic wafer fabs that can mass-produce 2-nanometer processes, and simultaneously support advanced packaging plants to meet the long-term demand from leading US customers for many years to come." TSMC Chief Financial Officer Huang Renzhao said at the earnings call that the company continues to increase investment in production capacity to match customer growth and has raised its full-year capital expenditure budget for 2026 to US$60 billion to US$64 billion. In the second quarter as of June, TSMC’s net profit hit a record high for five consecutive quarters, with single-quarter net profit soaring 23.4% from the previous quarter. Sravan Kundojala, an analyst at SemiAnalysis, a semiconductor analysis agency, commented: TSMC holds extremely strong pricing power, but it has not fully released it. "Overall, the company's current actual price increase is far lower than its own bargaining space." He added that TSMC only selectively and slightly raises the prices of some products to earn reasonable profits; the pricing strategy is restrained and does not take the opportunity to increase prices all the time, taking into account its own gross profit margin and customer operating pressure. Kundojala said that the hot market for memory chips has actually squeezed TSMC’s non-AI business sectors: rising memory chip prices and tight supply of components have impacted price-sensitive end markets such as consumer electronics. Financial report data shows that TSMC’s revenue in the second quarter reached NT$1.27 trillion, a year-on-year increase of 36% from NT$933.79 billion in the same period last year; advanced processes of 7 nanometers and below contributed 77% of total wafer revenue. Huang Renzhao disclosed the proportion of process revenue at Thursday's press conference: 5-nanometer technology contributed 33% of total revenue in the second quarter, and 3-nanometer technology accounted for 30%. Revenue structure in 2026 by application platform: high-performance computing (mainly AI chips) accounts for 66% of total revenue, smartphones 22%, and the Internet of Things 5%. As Asia’s most valuable company, TSMC continues to benefit from Nvidia, , Broadcom and other global technology giants' AI chip orders, the stock closed up 1.23% on Thursday, with a cumulative increase of more than 58% during the year.