TSMC’s second-quarter net profit surged 77.4%, beating expectations; 2-nanometer process contributes revenue for the first time

Mars Finance reported that TSMC, the world’s leading semiconductor foundry giant, released its 2026 second-quarter financial results. Driven by strong global AI infrastructure demand for advanced-process chips, TSMC’s performance this quarter comprehensively exceeded market expectations. Revenue for the period came in at NT$1.27 trillion (about $40.2 billion), up 36% year over year; net profit reached NT$706.6 billion (about $22 billion), up 77.4% year over year, far exceeding the market’s earlier estimate of NT$623.7 billion. In addition, the company’s gross margin for the quarter was 67.7%, and its operating margin was 60.3%, both better than expected.

In terms of process mix, advanced processes (7 nanometers and below) accounted for a combined 77% of total wafer revenue for the quarter. Of this, the 3-nanometer and 5-nanometer processes accounted for 30% and 33%, respectively, while 7-nanometer processes accounted for 11%. Notably, TSMC’s newly shipped 2-nanometer advanced process recorded revenue for the first time this quarter, reaching a 3% share. Looking ahead, TSMC confirmed that its 2026 capital expenditures will be close to a record $56 billion, and plans to invest about $265.0 billion into an advanced manufacturing park in Arizona, USA. TSMC CEO Wei Zhejia (C.C. Wei) said that, at present, the pace of capacity expansion still lags behind demand, and it is expected that a supply-demand imbalance will persist for several years. Meanwhile, although TSMC’s results are strong, the market still has a degree of watch-and-wait and concern about whether the technology giant’s massive AI investments can translate into tangible returns, as well as the medium- to long-term competitive landscape.