TSMC, the world's dominant producer of advanced AI chips and primary supplier to Nvidia and Apple, reported its most profitable quarter ever on Thursday — posting a 77% jump in second-quarter net profit to a record $22.36 billion. Revenue hit $40.2 billion, up 33.7% year-over-year, as the company raised its full-year revenue growth outlook to "slightly more than 40%" from a prior forecast of over 30%.
Capex Surge
The company lifted its 2026 capital expenditure guidance to a range of $60 billion to $64 billion, up from the previous $52–56 billion range. TSMC said capital spending over the next three years would be "even more significantly higher" than the past three years, underscoring management's conviction that AI-driven semiconductor demand has years of runway ahead.
"Our customers and customers' customers, who are mainly the cloud service providers, continue to provide us with their very strong signal and positive outlook," TSMC CEO C.C. Wei told an earnings conference. "Thus, our conviction in the multi-year AI megatrend remains very high."
$100 Billion More for Arizona
In a major win for the Trump administration's push to reshore semiconductor manufacturing, TSMC pledged an additional $100 billion investment in Arizona, bringing its total US commitment to $265 billion. The company said its eventual American footprint could grow to 10 fabs and two advanced-packaging facilities. Four new plants are expected, primarily focused on 2nm logic production.
The investment builds on TSMC's already-announced $165 billion for Arizona chip factories. The U.S. Commerce Department said the move "highlights the Trump Administration's commitment to strengthening domestic manufacturing."
Node Mix and Q3 Guidance
Advanced nodes continue to dominate: 3nm and 5nm processes each represented roughly a third of wafer revenue, with the newer 2nm node contributing 3%. High-performance computing (HPC) drove 66% of platform revenue, growing 20% quarter-over-quarter, while smartphone revenue slipped to 22%.
For the third quarter, TSMC guided revenue of $44.6 billion to $45.8 billion, above analyst estimates, representing 37% annual growth. The company reiterated a long-term revenue CAGR of around 25%, with AI accelerator revenue growth in the high-50% range.
Market Context
TSMC's market capitalization now stands at approximately $1.97 trillion — nearly double that of South Korean rival Samsung Electronics. Its Taipei-listed shares have gained 59% so far in 2026. The earnings also buoyed sentiment across the semiconductor supply chain, with ASML having raised its own 2026 sales forecasts earlier in the week.
