TSMC Expected to Deliver Record Earnings as AI Chip Demand Drives Growth

BY COMFORT OGBONNA

Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s leading producer of advanced artificial intelligence chips, is expected to report another quarter of record earnings as demand for AI infrastructure continues to surge globally.

Analysts believe the company is on track for its fifth consecutive quarter of record profits, supported by strong demand for its cutting-edge 3-nanometre and upcoming 2-nanometre chip manufacturing technologies. Growth in its advanced chip packaging technology, known as CoWoS, has also become a major driver as companies race to build more powerful AI systems.

TSMC’s rapid expansion has strengthened its position as Asia’s most valuable company. The chipmaker, which supplies major technology firms including Nvidia and Apple, now has a market value of nearly $1.97 trillion, almost twice that of South Korean competitor Samsung Electronics.

The company is expected to report second-quarter net profit of approximately 632.6 billion Taiwan dollars ($19.65 billion), representing a 59% increase compared with the same period a year earlier, according to an estimate compiled from 18 analysts. The forecast suggests TSMC could achieve its highest quarterly profit ever and mark its 10th consecutive quarter of earnings growth.

TSMC is scheduled to release its earnings report on Thursday, followed by a conference call at 0600 GMT where executives are expected to provide guidance for the third quarter and update their outlook for the full year.

The company already reported strong revenue growth for the second quarter, with sales increasing 36% from a year earlier and reaching a new record level, exceeding market expectations.

“TSMC’s strong second-quarter revenue shows AI demand remains healthy, driving demand for its advanced chip production and CoWoS packaging,” said Dan Nystedt, a research analyst at TriOrient, an Asia-based private investment firm.

Investors are also watching closely to see whether TSMC raises its full-year revenue forecast. Analysts widely expect the company to improve its current outlook, which calls for annual revenue growth of more than 30%.

Haas Liu, Bank of America’s Asia semiconductor analyst, said supply chain checks indicate that demand for AI-related chips remains strong. He suggested that TSMC could increase its full-year growth expectations due to continued demand from companies investing heavily in artificial intelligence technologies.

Another key focus for investors will be TSMC’s capital spending plans, which are seen as an important indicator of management’s confidence in the long-term strength of the AI market.

During its previous earnings call in April, TSMC said its 2026 capital expenditure could reach the upper end of its earlier forecast range of $52 billion to $56 billion.

Some analysts expect the company to maintain that guidance, while others believe TSMC may increase spending further. Liu estimated that capital expenditure could rise to around $58 billion, citing limited equipment availability and aggressive expansion plans by major memory chip producers, including Samsung Electronics, Micron Technology, and SK Hynix.

The company is also investing heavily in expanding its global manufacturing footprint. TSMC has committed $165 billion to building semiconductor production facilities in Arizona, United States, as governments and technology companies seek to secure critical chip supplies outside Asia.

TSMC’s strong performance has also been reflected in its stock price. Shares listed in Taipei have climbed 56% so far this year, slightly outperforming Taiwan’s broader stock market index, which has gained about 54%.

The company’s continued success highlights the growing importance of artificial intelligence in the global technology industry. As demand for AI servers, advanced processors, and next-generation computing systems accelerates, TSMC remains at the center of the race to produce the world’s most advanced chips.

However, investors will continue monitoring challenges such as rising production costs, global trade tensions, supply chain constraints, and the massive investment required to maintain leadership in semiconductor manufacturing. For now, strong AI demand continues to fuel expectations that TSMC’s growth momentum will remain powerful throughout the year.