AI chip demand in the numbers
TSMC reported $40.2 billion in Q2 2026 revenue, up 33.7% year over year in U.S. dollars. Net income and diluted EPS both rose 77.4% in New Taiwan dollars. Advanced nodes of 7 nanometers and below represented 77% of wafer revenue, while the HPC platform grew 20% sequentially to 66% of total revenue.
Why the investment plan increased
Management said emerging agentic AI may expand CPU demand in data centers in addition to demand for AI accelerators. TSMC raised its 2026 capital budget to $60–64 billion, with 70% to 80% planned for advanced process technologies. Actual Q2 capital expenditure was $15.7 billion.
Results and outlook
- Q2 revenue: $40.2 billion
- Gross margin: 67.7%
- Operating margin: 60.3%
- Q3 revenue guidance: $44.6–45.8 billion
- Full-year 2026 U.S.-dollar revenue outlook: slightly above 40% growth
The 2-nanometer node already contributed 3% of wafer revenue and is expected to ramp steeply in the second half. TSMC also warned that the initial N2 ramp could dilute second-half gross margin by roughly 3 to 4 percentage points.
What to watch
Investors need to track whether demand signals convert into orders and utilization, the margin effect of N2 and overseas fab ramps, and the payback period on higher capital spending. Management guidance is forward-looking and can change with demand, foreign exchange, geopolitics, and supply conditions. This article is not investment advice.