TSMC plans additional $100B US investment as Q2 profit surges

TSMC, the world’s main ‌producer of advanced AI chips and a major supplier to Nvidia pledged on Thursday to invest a further $100 billion in the US state of Arizona and said AI-driven demand will remain strong up to 2030.

Reinforcing its bullish viewpoint on demand, Taiwan Semiconductor Manufacturing Co raised its forecast for capital spending by up to ​14% for this year.

“Our customers and customers’ customers, who are mainly the cloud service providers, continue to provide us with ​their very strong signal and positive outlook,” company CEO C.C. Wei told an earnings conference.

“Thus, our conviction ⁠in the multi-year AI megatrend remains very high.”

The upbeat outlook came after TSMC, a bellwether for AI chip demand, posted a 77% jump ​in second-quarter profit to a record high of T$706.6 billion ($22 billion), beating a market forecast of T$632.6 billion and marking its ninth straight quarter of ​double-digit percentage growth.

Capital expenditure for 2026, a key indicator of management’s confidence in the durability of AI demand, is forecast to be between $60 billion and $64 billion, compared with previous guidance of the high end of between $52 billion and $56 billion, it said.

Thriving on surging demand for advanced chips used in AI applications, TSMC’s ​further $100 billion investment in Arizona would add to already-announced investments of $165 billion to build chip factories there.

“We believe this investment will help ​to further foster the development of the US semiconductor ecosystem, strengthen the supply chain, and support an increasing number of high-tech, high-paying jobs in the ‌United States,” ⁠Wei said.

An additional four plants would probably be built in Arizona, including for advanced packaging and adding to the eight already being built or planned, though the timeline for the additional ones would depend on the “market situation”, he added.

TSMC’s aggressive capital spending and soaring profit margins have made it a barometer of demand in the global semiconductor industry.

The company expects full-year revenue in U.S. dollar terms will increase ​by slightly more than 40% for ​2026, compared with a previous ⁠forecast of more than 30%. For the current quarter, it forecasts sales between $44.6 billion and $45.8 billion, up from $33.1 billion a year earlier.

Analysts said demand for TSMC’s 3-nanometre and 2-nanometre process technologies for AI ​chips, as well as for its advanced chip packaging technology, CoWoS, remains strong.

That has catapulted Asia’s most ​valuable company, also ⁠a key supplier to Apple, to new heights. Its market capitalisation is now nearly double that of South Korean rival Samsung Electronics at around $1.97 trillion.

On Monday, the company announced a 36% rise in second-quarter revenue, ahead of market forecasts and a record high.

In related news, on Wednesday Dutch company ASML, ⁠the world’s ​dominant supplier of equipment needed to make high-tech computer chips, raised its 2026 sales ​forecasts and pledged a capacity boost that may ease fears a production bottleneck could slow the AI boom.

TSMC’s Taipei-listed shares have gained 59% so far this year, largely in line with ​the broader market. Reuters