Just days after Samsung’s record-breaking second-quarter earnings, history repeated itself when Taiwan Semiconductor Manufacturing Co. (TSMC) reported record second-quarter earnings on the chipmaker’s central role in the global artificial intelligence (AI) boom.
The world’s largest contract chip manufacturer posted second-quarter revenue of NT$1.27 trillion (US$40.2 billion), a 36% increase from Q2 of 2025. Net income surged 77.4% to a record NT$706.6 billion (US$22.4 billion), while diluted earnings per share reached NT$27.25, exceeding analyst expectations.
The results are due in no small part to TSMC’s role in providing hyperscale cloud providers and AI developers with billions of dollars in graphics processors and AI accelerators, as only TSMC has the advanced manufacturing technologies needed to produce those chips.
“Our business in the second quarter was supported by strong demand for our leading-edge process technologies,” said Wendell Huang, Senior VP and Chief Financial Officer of TSMC. “Moving into third quarter 2026, we expect our business to be supported by continued strong demand for our leading-edge process technologies, including the steep ramp-up of our 2-nanometer technology.”
TSMC manufactures chips for many of the world’s largest technology companies, including Nvidia’s AI GPUs, Apple’s custom processors, AMD’s EPYC server CPUs and Instinct AI accelerators, and numerous custom AI chips developed by cloud providers like Google and Amazon Web Services.
In the second quarter, shipments of 2-nanometer accounted for 3% of total wafer revenue; 3-nanometer accounted for 30%; 5-nanometer accounted for 33%; and 7-nanometer accounted for 11%. Advanced technologies, defined as 7-nanometer and more advanced technologies, accounted for 77% of total wafer revenue.
Gross margin reached 67.7%, while operating margin climbed to 60.3%, reflecting the favorable mix of high-value AI chips. The company expects third-quarter gross margins of 65% to 67% and operating margins of 56% to 58%, which would indicate continued profitability even as it ramps production capacity with its new process nodes.
TSMC has increased its 2026 capital spending outlook to support additional advanced manufacturing capacity, including new fabs in Taiwan, Arizona, Japan and Germany. Alongside its earnings report, TSMC announced an additional US$100 billion investment in U.S. manufacturing, bringing its total planned investment in Arizona to US$265 billion, one of the largest foreign direct investments in U.S. manufacturing history.
TSMC issued an upbeat outlook for the third quarter, forecasting revenue between US$44.6 billion and US$45.8 billion, comfortably ahead of the second quarter and signaling that AI demand remains strong.
