TSMC Forecast to Post Fifth Straight Record Profit on Surging AI Demand

Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, is poised to report a fifth consecutive quarter of record earnings, driven by the unabated boom in artificial intelligence infrastructure spending.

Earnings Preview

Ahead of its earnings call on Thursday, TSMC is expected to report a 59% surge in second-quarter net profit to T$632.6 billion ($19.65 billion), according to an LSEG SmartEstimate compiled from 18 analysts. A result above T$572.5 billion would represent the company's highest-ever quarterly net income and its tenth straight quarter of profit growth.

This forecast follows the company's announcement on Monday of a 36% year-on-year rise in second-quarter revenue, which set a new record high. Analysts attribute the strong performance to robust demand for TSMC's leading-edge 3-nanometre and 2-nanometre process technologies, as well as its advanced CoWoS chip packaging, which are critical for AI hardware from clients like Nvidia and Apple.

Outlook in Focus

Investors will be closely watching for any revisions to the company's full-year guidance. In a research note, Bank of America analyst Haas Liu stated that supply chain checks suggest the AI demand pipeline remains strong, and that TSMC could raise its full-year revenue growth outlook from its current guidance of "above 30%."

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Another key indicator will be the company's capital spending plans, which are seen as a gauge of management's confidence in sustained AI demand. In April, TSMC said its 2026 capital expenditure would be at the high end of its $52 billion to $56 billion guidance. Some analysts, including Liu, forecast a potential increase to approximately $58 billion, citing tight equipment supply and aggressive capacity expansion by memory chipmakers.

Market Context

Fueled by its central role in the AI supply chain, TSMC has become Asia's most valuable company, with a market capitalization of around $1.97 trillion, nearly double that of its rival Samsung Electronics. The company's Taipei-listed shares have gained 56% so far this year.

To meet global demand, the chipmaker is also undertaking significant international expansion, including a $165 billion investment to build advanced semiconductor factories in Arizona in the United States.