Taiwan Semiconductor Manufacturing Co. (TSMC) reported a 77.4% surge in net profit for the second quarter of 2026, driven by what the company called “insatiable” demand for chips used in artificial intelligence. The world’s largest contract chipmaker also raised its capital expenditure forecast and announced a $100 billion expansion of its Arizona fabrication plant.
Why the profit surged
The profit jump came as TSMC’s advanced 3-nanometer and 5-nanometer nodes ran near full capacity, with AI accelerators and data-center processors accounting for a growing share of revenue. Chief Financial Officer Wendell Huang told analysts that AI megatrends are “the single most important driver” of the company’s growth outlook. Huang said the company expects AI-related revenue to more than triple this year compared with 2025.
Arizona expansion details
TSMC said it will invest an additional $100 billion in its Arizona campus, bringing the total planned investment in the U.S. facility to more than $165 billion. The expansion includes a third fabrication plant, which will begin producing 2-nanometer chips by 2028. The company said the move is partly a response to customer demand for a more geographically diverse supply chain.
Capital expenditure outlook
The chipmaker raised its 2026 capital expenditure forecast to between $44 billion and $48 billion, up from a previous range of $40 billion to $44 billion. The increase reflects both the Arizona buildout and continued investment in advanced packaging capacity in Taiwan. TSMC said it expects capital spending to remain elevated through 2027 as it races to meet demand for AI chips.
The company’s stock rose 3.2% in Taipei trading after the earnings release. TSMC’s market capitalization now exceeds $1.2 trillion.
TSMC’s next quarterly report is due in October. Investors will be watching for any signs that AI chip demand is slowing, though the company’s current guidance suggests no letup.
