Taiwan Semiconductor Manufacturing Company (TSMC) delivered the strongest quarterly results in its history on July 16, with second-quarter revenue surpassing NT$1.27 trillion for the first time and earnings per share reaching a record NT$27.25 — propelled by relentless orders from artificial intelligence hardware makers that have made the Taiwanese chipmaker one of the clearest financial barometers of the global AI investment cycle.
TSMC, which manufactures the most advanced chips in the world for clients that include Nvidia, Apple, and AMD, reported consolidated revenue of NT$1.2703 trillion for the April-to-June quarter, equivalent to roughly USD $40.2 billion. That represents a 36% jump from the same period a year ago and a 12% increase over the first quarter. Net profit after tax reached NT$706.56 billion, surging 77.4% year-on-year and climbing 23.4% above the previous quarter.
Quarterly Profit Surges 77% as Advanced-node Mix Widens
Revenue growth alone does not fully capture the second quarter's performance. TSMC's gross margin rose to 67.7%, gaining 1.5 percentage points from Q1's already elevated 66.2%. Operating margin expanded from 58.1% to 60.3%, while the net profit margin widened meaningfully from 50.5% to 55.6%. The across-the-board improvement reflects a structural shift in what TSMC is making: AI accelerators and high-performance computing chips — which command premium pricing and run on the company's most expensive-to-build nodes — now dominate the order book in a way that compresses cheaper, lower-margin legacy work into a shrinking share of total output.
2nm Chips Enter Mass Production, Opening a New Technology Cycle
The most consequential detail buried inside Thursday's earnings release was a single percentage: TSMC's 2-nanometer process technology contributed revenue for the first time in Q2, accounting for 3% of total wafer sales. That figure may appear modest, but its significance is outsized. It confirms that the world's most advanced commercial fabrication node has crossed from development into mass production — a transition that typically takes years of engineering and capital investment to reach.
The 2nm ramp arrives as the 3nm process continues to mature rapidly, rising to 30% of wafer revenue in Q2 from 25% in Q1. Combined with 5nm at 33%, 7nm at 11%, and the newly revenue-generating 2nm slice, chips produced at 7nm and below collectively accounted for 77% of all wafer sales — up from 74% in the prior quarter and a new record high. For the industry, the figures underscore how thoroughly AI and HPC demand has pulled volume toward cutting-edge nodes, effectively making yesterday's leading-edge technology a baseline expectation rather than a differentiator.
Investors Look to Management for Second-Half Guidance on AI and CoWoS
With the headline numbers now public, market attention turns to the investor conference Thursday, where TSMC chairman C.C. Wei and senior executives are expected to address the durability of the AI demand cycle through the second half of the year. Also on the agenda: whether the company will revise its full-year US dollar revenue forecast upward, the pace at which 2nm volume will scale, and expansion plans for CoWoS — a proprietary advanced packaging technology that bonds chiplets directly onto silicon substrates and has become a critical bottleneck for producing Nvidia-class AI accelerators at scale.
Progress at TSMC's overseas fabs in the United States, Japan, and Europe is also expected to draw questions, as geopolitical pressure on semiconductor supply chain diversification continues to shape the company's long-term capital allocation. Thursday's results make clear that demand is not the constraint; the question investors will press management on is whether TSMC's production capacity — and the advanced packaging ecosystem around it — can keep pace. （Related： Taiwan's Powerchip Rides TSMC CoWoS Overflow Into AI Packaging ｜ Latest ）
