Taiwan Semiconductor Manufacturing Co reported a 77.4 percent jump in second-quarter net income to NT$706.56 billion, blowing past the NT$632.64 billion consensus and marking a fifth consecutive quarter of record profit. Revenue rose 36 percent year on year to NT$1.27 trillion, equivalent to $39.45 billion, while advanced process nodes of 7-nanometer and below accounted for 77 percent of wafer revenue, underscoring the pricing power that comes with leading-edge dominance.
The results reflect insatiable demand for AI accelerators. Chairman C.C. Wei described AI-related demand as “extremely robust,” and the company guided third-quarter revenue between $44.6 billion and $45.8 billion with an operating margin of 56 to 58 percent. High-performance computing is projected to represent 66 percent of platform revenue by 2026, with smartphones at 22 percent and internet of things at 5 percent.
To lock in that demand, TSMC will invest an additional $100 billion in Arizona, lifting its total commitment in the state to $265 billion. The capital will fund several logic wafer fabs for 2-nanometer mass production and advanced packaging facilities, Wei said, aimed at supporting multi-year orders from leading U.S. customers. The company also raised its 2024 capital expenditure budget to between $60 billion and $64 billion, up from the previous range, as it continues to build out capacity.
Analyst Sravan Kundojjala of SemiAnalysis argued TSMC is exercising restraint despite considerable leverage. “Net, they have far more pricing power than they are currently exercising,” he said, noting the chipmaker is capturing more value through selective price increases but remains deliberate rather than opportunistic to preserve margins without alienating customers.
That discipline coexists with pressure elsewhere. Kundojjala said the memory boom is squeezing TSMC’s non-AI business, as consumer and price-sensitive end markets absorb higher memory costs and tight component supply. In the quarter just ended, 5-nanometer contributed 33 percent of revenue and 3-nanometer 30 percent, a mix that highlights how concentrated the growth engine has become.
Shares rose 1.23 percent on Thursday and have climbed more than 58 percent year to date, making TSMC Asia’s most valuable company. The stock’s advance prices in not only the current AI cycle but also the strategic bet that U.S. customers will pay a premium for domestic leading-edge supply.