TSMC posts 59% rise in second-quarter net profit to new record

KUALA LUMPUR, 21 JULY 2026 —

KUALA LUMPUR — Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest producer of advanced AI chips, is set to report a fifth consecutive quarter of record earnings, driven by surging demand for AI infrastructure.

On Thursday (July 16), TSMC is projected to report a 59% surge in net profit to T$632.6 billion (S$25.4 billion) for the second quarter, according to an LSEG SmartEstimate compiled from 18 analysts. SmartEstimates prioritise forecasts from analysts with higher accuracy records. The earnings call, scheduled for 6am GMT (2pm SGT), will also provide third-quarter and updated full-year guidance.

Any net profit exceeding T$572.5 billion would mark TSMC’s highest-ever quarterly earnings and its 10th straight quarter of profit growth. On Monday, the company posted a 36% year-on-year increase in second-quarter revenue, surpassing market expectations and setting a new record.

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

Analysts widely anticipate TSMC to raise its full-year revenue growth outlook. Haas Liu, Bank of America’s Asia semiconductor analyst, noted in a research note that supply chain checks indicate continued strong AI demand, suggesting TSMC could increase its full-year revenue guidance from the current “above 30%” year-on-year target.

Investors will also closely watch whether TSMC raises its capital expenditure outlook, seen as a key indicator of management’s confidence in AI demand durability. In its last earnings call in April, TSMC indicated that 2026 capital expenditure would align with the high end of its earlier guidance of US$52 billion to US$56 billion.

While some analysts, including Nystedt, expect TSMC to maintain this guidance, Liu forecasts a potential increase to around US$58 billion, citing tight equipment supply and aggressive capacity expansion by memory chipmakers such as Samsung Electronics, Micron Technology, and SK Hynix.

TSMC is also investing US$165 billion to construct chip factories in Arizona, US. Its Taipei-listed shares have surged 56% year-to-date, outpacing the broader market’s 54% gain.

Malaysia’s tech sector to feel indirect impact While TSMC’s operations are primarily based in Taiwan, its supply chain and global demand dynamics have ripple effects across Southeast Asia, including Malaysia. Local semiconductor firms and tech-dependent industries may benefit from sustained AI-driven chip demand, particularly in advanced packaging and testing services.

However, Malaysia’s exposure to TSMC’s supply chain remains limited compared to regional hubs like Singapore and Thailand, which host more direct suppliers. Analysts suggest Malaysian tech firms could see secondary benefits through increased orders for materials, equipment, or ancillary services tied to the broader AI ecosystem.

Outlook hinges on AI investment sustainability The broader outlook for TSMC and the global semiconductor industry depends on the longevity of AI infrastructure spending. If hyperscalers and cloud providers continue to prioritise AI chip deployments, TSMC’s record earnings streak could extend further.

Conversely, any slowdown in AI investment—potentially driven by economic uncertainties or supply chain constraints—could temper growth expectations.

For now, the data points to a AI-driven demand cycle, positioning TSMC to maintain its leadership in advanced chip manufacturing.

Related: TSMC