TSMC profit surges 77% as Arizona spending swells by $100 billion

Taiwan Semiconductor Manufacturing Co. posted a 77.4 percent year-on-year rise in second-quarter net income that beat forecasts, while disclosing plans to pour another $100 billion into its Arizona operations.

TSMC reports record second-quarter results. Net income totaled NT$706.56 billion, above the NT$632.64 billion that analysts had projected on average. Revenue climbed to NT$1.27 trillion, equivalent to $39.45 billion and surpassing the NT$1.264 trillion consensus; the figure represented a 36 percent gain from NT$933.79 billion in the year-earlier period.

Processes at 7-nanometer and below made up 77 percent of wafer revenue. The 5-nanometer node generated 33 percent of total revenue, with the 3-nanometer technology contributing 30 percent.

Guidance points to continued AI-driven growth. The foundry projected third-quarter revenue of $44.6 billion to $45.8 billion and an operating margin between 56 percent and 58 percent. Chairman C.C. Wei stated that "AI related demand continues to be extremely robust."

For 2026, high-performance computing is expected to account for 66 percent of revenue by platform, smartphones 22 percent and Internet of Things 5 percent. The latest quarter marked the fifth straight record net-income result and delivered a 23.4 percent sequential increase.

Arizona investment expands to $265 billion. TSMC will commit an extra $100 billion in the state, lifting its cumulative Arizona outlay to $265 billion. The money is earmarked for multiple logic wafer fabs targeting two-nanometer mass-production technologies plus advanced packaging facilities.

Wei said the outlay addresses "strong multi-year demand from our leading U.S. customers." The company lifted its 2024 capital-spending plan to between $60 billion and $64 billion.

Analysts note pricing discipline amid memory pressures. Sravan Kundojjala at SemiAnalysis observed that TSMC possesses substantial leverage yet is opting not to deploy it fully. He added that the chipmaker holds far more pricing power than it is currently exercising and is staying deliberate to protect margins without alienating clients.

Kundojjala pointed out that the memory boom is now squeezing TSMC's non-AI business. Consumer and price-sensitive end markets took a hit from rising memory prices and tight component supply.

Shares of the Taiwanese company rose 1.23 percent on the day of the earnings release and are up more than 58 percent for the year to date. TSMC produces chips for leading technology firms including Nvidia, Apple and Broadcom.