TSMC reported a record second-quarter profit on July 16, with net income jumping 77% from a year earlier to T$706.6 billion, far above market forecasts and strong enough to mark its ninth straight quarter of double-digit percentage growth.
The result gave investors the clearest sign yet that demand for advanced chips tied to AI is still running hot. TSMC is the main producer of advanced AI chips and a major supplier to Nvidia, and analysts said demand remains strong for its 3-nanometre and 2-nanometre process technologies as well as CoWoS advanced packaging. The company had already said on Monday that second-quarter revenue rose 36% to a record high, reinforcing the scale of the surge before the profit figure even landed.
By the numbers, the quarter beat the LSEG SmartEstimate forecast of T$632.6 billion by a wide margin. That gap matters because it shows how much of the gain is still being driven by the most advanced chip categories, not just a broad rebound in semiconductors. Wen-Yee Lee, who co-authored the report, highlighted the strength in AI-linked demand and the market's focus on whether that momentum can last.
The harder question is what TSMC does with the cash. Analysts are watching whether the company raises capital spending, because the durability of AI demand is not yet fully confirmed. TSMC already said on its last earnings call in April that 2026 capital expenditure would be at the high end of its earlier guidance of $52 billion to $56 billion, and it is also investing $165 billion to build chip factories in Arizona. If management sounds more aggressive on spending, it would be a clear signal that the company sees AI demand holding up beyond this quarter.
TSMC's shares in Taipei have gained 59% so far this year, and its market value now stands at about $1.97 trillion, nearly double Samsung Electronics. The next test comes at 0600 GMT, when TSMC is scheduled to give third-quarter and full-year guidance. That call will show whether this record quarter is a peak or another step in a run that still has room to go.
