Taiwan Semiconductor Manufacturing Co. reported its highest quarterly net profit in company history this week, and the number leaves little doubt about what’s driving it: AI chip demand that keeps climbing well past what analysts expected.
For the quarter ending in June, TSMC’s net profit came in at roughly $22 billion, up 77% from the same period last year and comfortably ahead of Wall Street’s forecasts. Revenue reached about $40.2 billion, a 36% jump year over year, and gross margin rose to 67.7% — above the top end of the company’s own guidance range. It’s the ninth consecutive quarter of double-digit profit growth for the chipmaker.
High-performance computing, the segment that covers AI accelerators for data centers, is now the clearest sign of how much the industry has shifted. That category made up 66% of TSMC’s revenue this quarter, while smartphones — once the company’s largest business — fell to just 22%. Chips built on process nodes below 7 nanometers accounted for 77% of wafer sales, a strong tilt toward the advanced manufacturing that companies like Nvidia and Apple depend on for their most demanding products.
TSMC isn’t treating this as a temporary spike. The company raised its full-year revenue growth outlook to above 40%, lifted its 2026 capital expenditure plans to as much as $64 billion, and committed an additional $100 billion to its Arizona operations, bringing total US investment there to $265 billion. CEO C.C. Wei also confirmed that CoWoS advanced packaging — a manufacturing step increasingly essential for AI chips — is fully sold out, with lead times now stretching past a year.
That last detail matters more than the headline profit number. When your most advanced packaging capacity is booked out for over a year, it tells you demand isn’t just strong right now — it’s already locked in for a long stretch ahead, regardless of which AI lab’s next model actually ships on schedule.
