TSMC plans bigger Arizona investment after record profit

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TSMC raises Arizona bet

Highlights

TSMC profit rose 77.4%.
Revenue reached NT$1.27 trillion.
Arizona investment will total $265 billion.
AI demand remains the main growth driver.

The world’s largest contract chipmaker said second-quarter net profit rose 77.4% from a year earlier to NT$706.56 billion, beating the NT$632.64 billion expected by analysts, CNBC reported. Revenue reached NT$1.27 trillion, or about $39.45 billion, slightly above forecasts.

AI demand drives another record

The quarter marked TSMC’s fifth consecutive record for net income. Profit was also up 23.4% from the previous quarter, while revenue climbed 36% from NT$933.79 billion a year earlier.

TSMC forecast third-quarter revenue of $44.6 billion to $45.8 billion, with an operating margin of 56% to 58%. Chairman C.C. Wei said demand tied to artificial intelligence remained extremely strong.

The company is benefiting from orders from some of the world’s largest technology groups, including Nvidia, Apple, and Broadcom. High-performance computing accounted for 66% of revenue by platform, followed by smartphones at 22% and the Internet of Things at 5%.

Advanced chips continue to dominate the business. Technologies of 7 nanometers and below made up 77% of total wafer revenue. The 5-nanometer process accounted for 33% of second-quarter revenue, while 3-nanometer contributed 30%.

Arizona expansion grows larger

TSMC said it will invest an additional $100 billion in Arizona, bringing its total planned investment in the state to $265 billion. The company plans to build more logic wafer fabs for 2-nanometer mass production, along with advanced packaging facilities to support demand from major U.S. customers.

The expansion comes as governments and technology companies try to reduce dependence on concentrated chip supply chains in Asia. For TSMC, Arizona is becoming a key part of its long-term plan to serve U.S. clients more directly.

The company also raised its capital spending budget for this year to between $60 billion and $64 billion, reflecting heavy investment in capacity and advanced manufacturing.

Chip dominance comes with pressure

TSMC’s results show the strength of the AI investment cycle, but also the pressure it creates. The company has strong pricing power, yet analysts say it is using it carefully to protect long-term customer relationships.

The memory boom is also affecting non-AI markets, where higher component costs and tight supply are weighing on consumer and price-sensitive segments. Still, TSMC shares rose 1.23% Thursday and are up more than 58% this year, reflecting investor confidence in its central role in advanced chipmaking.

Earlier, we reported that Nvidia deepens Japan's push as robotics becomes the next AI frontier.

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