TSMC to invest another $100 billion in US as Q2 profit blows past forecasts

TSMC to invest another $100 billion in US as Q2 profit blows past forecasts

Asian shares fall on chipmaker drag, bonds cheer cooler inflation By Wen-Yee Lee, Ben Blanchard and Faith Hung TAIPEI, July 16 (Reuters) - 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 U.S. state of Arizona and said it was still seeing robust AI-driven demand for chips. Riding the AI boom, TSMC also raised its forecast for capital spending by up to 14% for this year. The upbeat outlook came after Taiwan Semiconductor Manufacturing Co, 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. 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, TSMC forecast sales between $44.6 billion and $45.8 billion, up from $33.1 billion a year earlier.

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. TSMC’s aggressive capital spending and soaring profit margins have made it a barometer of demand in the global semiconductor industry. 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. ($1 = 32.1340 Taiwan dollars)