Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker and a key supplier to Nvidia and Apple, delivered a record-breaking second quarter in 2026 as surging artificial intelligence (AI) demand continued to fuel growth.
TSMC reported 77 percent year-on-year increase in net profit to a record T$706.6 billion (approximately $22 billion), significantly exceeding market expectations.
High Performance Computing (HPC) remained TSMC’s largest business segment, contributing 66 percent of total revenue as demand for AI GPUs, AI accelerators and custom processors from major customers such as Nvidia, AMD, Apple and Broadcom continued to surge.
TSMC’s smartphone business accounted for 22 percent of revenue despite seasonal softness. TSMC’s Internet of Things (IoT) segment contributed 6 percent.
Automotive represented 3 percent of revenue, Digital Consumer Electronics (DCE) generated 1 percent, and other businesses contributed the remaining 2 percent.
Advanced manufacturing technologies continued to dominate wafer revenue. The 2nm process contributed 3 percent, 3nm accounted for 30 percent, and technologies 7nm and below represented 77 percent of total wafer revenue, highlighting the industry’s rapid transition toward leading-edge nodes for AI and high-performance computing workloads.
The latest Omdia report said global smartphone shipments dropped 4 percent in 2Q26 as the memory crisis disrupted supply and pushed up component costs. Apple, one of the main customers of TSMC, has increased its smartphone market share to 20 percent in Q2 2026 from 16 percent in Q2 2025.
Geographically, North America generated 78 percent of TSMC’s revenue in the second quarter, underlining the company’s growing dependence on U.S. hyperscale cloud providers and AI chip designers.
Asia Pacific accounted for 8 percent, China contributed 6 percent, while Japan and Europe, Middle East and Africa (EMEA) each represented 4 percent of total revenue. The regional mix reflects sustained AI infrastructure investments in the United States alongside steady demand from customers across Asia and Europe.
The strong financial performance was driven by sustained demand for advanced semiconductor technologies, including 3nm and 2nm process nodes and advanced CoWoS chip packaging, which are critical for AI accelerators and high-performance computing applications. TSMC also maintained a positive outlook, forecasting more than 40 percent revenue growth for full-year 2026, supported by robust AI infrastructure investments from global technology companies.
Reflecting confidence in long-term AI demand, TSMC increased its 2026 capital expenditure guidance to between $60 billion and $64 billion, up from its earlier upper-end estimate of $56 billion. The higher investment will support capacity expansion for advanced manufacturing technologies and packaging facilities to meet accelerating customer demand.
The company also announced an additional $100 billion investment in Arizona, expanding its total planned U.S. investment to $265 billion. The expansion includes plans for four additional semiconductor fabrication plants, adding to the eight facilities previously announced, strengthening domestic semiconductor manufacturing in the United States while supporting growing AI chip requirements.
TSMC’s market capitalization has climbed to approximately $1.97 trillion, nearly double that of Samsung Electronics, underscoring its dominant position in the global semiconductor industry, Reuters news report said. CEO C.C. Wei said AI demand remains exceptionally strong, with customers continuing to expand investments in advanced computing infrastructure.
BABURAJAN KIZHAKEDATH