TSMC's net profit in the second quarter surged by 77.4%, exceeding expectations, with the 2-nanometer process contributing to revenue for the first time

Global chip foundry giant TSMC announced its financial report for the second quarter of 2026. Benefiting from the strong demand for advanced process chips driven by global AI infrastructure development, TSMC's performance this quarter significantly exceeded market expectations. During the period, it achieved revenue of NT$1.27 trillion (approximately US$40.2 billion), a year-on-year increase of 36%; net profit reached NT$706.6 billion (approximately US$22 billion), a year-on-year surge of 77.4%, far exceeding the market's previous estimate of NT$623.7 billion. In addition, the company's gross margin for the quarter reached 67.7%, and the operating margin was 60.3%, both better than expected.

In terms of process structure, advanced processes (7 nanometers and below) contributed a total of 77% to the total wafer revenue this quarter. Among them, the 3-nanometer and 5-nanometer processes accounted for 30% and 33%, respectively, while the 7-nanometer process accounted for 11%. Notably, TSMC's newly shipped 2-nanometer advanced process recorded revenue for the first time, accounting for 3%.

Looking ahead, TSMC confirmed that its capital expenditure for 2026 will approach a record US$56 billion and plans to invest approximately US$26.5 billion in its advanced manufacturing park in Arizona, USA. TSMC CEO C.C. Wei stated that the current pace of capacity expansion still lags behind demand, and the situation of supply not meeting demand is expected to continue for several years. Meanwhile, despite TSMC's strong performance, the market remains somewhat cautious and concerned about whether the massive AI investments by tech giants can translate into actual returns and the medium- to long-term competitive landscape.