Taiwan Semiconductor Manufacturing Co (ADR) (NYSE:TSM) posted a 77% jump in second-quarter net profit and raised its capital spending forecast for the year, as the world's largest contract chipmaker rides sustained demand for AI processors.
Net profit came in at $22.36 billion for the quarter, well above analyst estimates of $19.74 billion, on revenue of $40.2 billion, up 33.7% from a year earlier.
Gross margin rose to 67.7%, ahead of the 67.1% consensus estimate.
The company lifted its 2026 capital expenditure guidance to a range of $60 billion to $64 billion, up from a prior forecast of $52 billion to $56 billion. TSMC said capex over the next three years would be "even more significantly higher" than in the previous three-year period.
Shares fell about 2% on Thursday morning following the capex increase.
For the third quarter, TSMC guided revenue of $44.6 billion to $45.8 billion, above the $43.11 billion analyst estimate and representing 37% annual growth. Gross margin is expected between 65% and 67%, with operating margin seen at 56% to 58%.
High-performance computing remained TSMC's largest revenue driver, accounting for 66% of the platform mix and growing 20% quarter-over-quarter. Smartphone revenue slipped 4% sequentially to 22% of the total, while automotive revenue rose 15% to reach 4%.
Advanced nodes continued to dominate output, with chips at 7nm and below making up 77% of wafer revenue. The 3nm and 5nm processes each represented roughly a third of the mix, while the newer 2nm node contributed 3%.
TSMC also expanded its US investment plans, announcing an additional $100 billion commitment in Arizona that brings its total US investment to $265 billion. The company said its eventual American footprint could grow to 10 fabs and two advanced-packaging facilities, with four new facilities expected to focus primarily on 2nm logic production, though the final mix could shift to three logic fabs and one packaging plant.
Construction timing has not been disclosed and will depend on market conditions.
Looking further ahead, TSMC said it expects the ramp-up of its N2 process to dilute gross margin by 3 to 4 percentage points in the second half of 2026, with overseas fabs weighing on margins by 2 to 3 points initially and 3 to 4 points in later stages. The company reiterated a long-term revenue compound annual growth rate of around 25%, with AI accelerator revenue growth in the high-50% range.