TSMC Posts Record Q2 Profits, Raises Capex Forecast on AI Demand
The foundry giant increases its full-year capital expenditure outlook to $60 billion–$64 billion and announces a further $100 billion investment in its US operations.
Taiwan Semiconductor Manufacturing (TSMC) has reported record second-quarter financial results, driven by surging demand for artificial intelligence and high-performance computing semiconductors. Revenue reached NT$1.27 trillion, approximately $40.2 billion, marking a 36% increase year-on-year. The company’s net profit margin surged to 55.6%, up from 42.7% in the previous year, while gross margins improved by 910 basis points to 67.7%. Diluted earnings per share hit a record NT$27.25, representing a 77% year-on-year increase.
High-performance computing chips accounted for 66% of total revenue, underscoring the pivotal role of AI infrastructure in the company’s growth. Leading-edge process technologies contributed significantly to this performance, with 3nm, 5nm, and 7nm wafers accounting for 30%, 33%, and 11% of revenue respectively. Smartphone chips made up the remaining 22% of revenue, highlighting the dominance of data centre demand over consumer electronics in the current quarter.
In response to this sustained demand, TSMC raised its full-year capital expenditure forecast to between $60 billion and $64 billion, up from the previous guidance of $52 billion to $56 billion. Management indicated that capital spending over the next three years will be significantly higher than in the past three years. This increased investment is necessary to meet the growing demand for advanced semiconductor manufacturing capabilities.
The company also announced an additional $100 billion investment in its Arizona facility, bringing the total committed investment in the United States to $265 billion. CEO C.C. Wei stated that this funding will support the construction of several semiconductor logical wafer fabs for two-nanometer mass production technologies, as well as advanced packaging fabs to serve leading US customers.
Looking ahead, TSMC provided third-quarter revenue guidance of $44.6 billion to $45.8 billion, which represents approximately 37% growth at the midpoint compared to the previous year. The outlook projects gross profit margins of 66% and operating profit margins of 57%. These robust results and forward-looking guidance contradict narratives suggesting a slowdown in AI chip adoption, reinforcing TSMC’s position as a critical enabler of the global technology sector.
