Taiwan Semiconductor Manufacturing Co. (TSMC) raised its full-year 2026 revenue growth guidance to slightly above 40%, up from a prior forecast of more than 30%, after reporting a record second-quarter profit. The chipmaker also increased its 2026 capital spending target to between $60 billion and $64 billion and pledged an additional $100 billion for factories in Arizona. The moves signal sustained demand for AI chips from customers like Nvidia and AMD.
Record Profit Sets Up the Guidance Raise
TSMC posted second-quarter net income of NT$706.56 billion, a 77.4% jump from a year earlier, beating the NT$632.6 billion analyst forecast. Profit climbed 23.4% from the prior quarter, marking a fifth straight quarterly record. Revenue reached NT$1.27 trillion, roughly $40 billion, up 36% year-on-year. Gross margin came in at 67.7%, above the company's guided range, and June capped the quarter as its strongest month with revenue of NT$442.68 billion ($13.7 billion).
The stronger figures gave management room to lift its outlook. TSMC now expects 2026 capital spending of $60 billion to $64 billion, up to 14% above its prior $56 billion ceiling. For the third quarter, the company guided revenue of $44.6 billion to $45.8 billion.
What TSMC's Guidance Signals for AI Chip Demand
The guidance raise points to firm underlying demand. Analysts said orders for TSMC's 3-nanometre and 2-nanometre process technologies remain strong, and interest in its CoWoS packaging is holding up well. The capital spending increase carries added weight because TSMC committed an additional $100 billion to Arizona, adding to $165 billion already set aside for factories there. The scale suggests management sees the AI buildout as durable rather than a short-cycle project.
"This is to build several or more semiconductor logical wafer fabs for two nanometer mass production technologies, as well as advanced packaging fabs to support the strong multi-year demand from our leading U.S. customers," said TSMC Chairman C.C. Wei. Because TSMC supplies the most advanced AI chips, the twin raise reads as a green light for customers including Nvidia, AMD, and other chip designers. Still, the aggressive commitment raises the stakes: if AI spending slows, TSMC would feel it late, having added capacity at peak utilization. The next test comes with third-quarter results, which will show whether the $45 billion revenue pace holds.