Taiwan Semiconductor Manufacturing Company, the world's largest contract chipmaker, reported a record second-quarter profit on Thursday, July 16. According to Reuters, net profit jumped 77% from a year earlier, far surpassing market forecasts.
The figures were driven by relentless demand for the advanced chips that power artificial intelligence. According to CNBC (via Techmeme), revenue rose 36% year-on-year to about $39.45 billion and net income climbed 77.4% to roughly $21.9 billion, both above estimates. CNBC also reported that chips built on 7-nanometer or smaller processes made up 77% of TSMC's wafer revenue. Nikkei Asia likewise tied the 77.4% surge to record AI chip demand.
Why chips matter here: TSMC manufactures the most advanced processors used by leading AI companies. Newsbytes reported that adoption of its cutting-edge 3nm and 2nm technology helped power the quarter, with supply staying tight. According to invezz, TSMC's operating margin reached 60.3% and gross margin 67.7% — a sign of genuine pricing strength rather than a one-off gain.
The results landed after a jittery run-up. Asian markets slid ahead of the report amid a broad semiconductor selloff, according to BusinessToday Malaysia. Invezz reported that South Korea's Kospi tumbled 6% and memory maker SK Hynix fell about 11%, while finance.biggo.com reported Japan's Nikkei 225 plunged nearly 2,000 points, falling below 67,000. Investors feared TSMC's guidance on advanced computing might signal fewer AI builds ahead.
Why it matters: TSMC sits at the center of the global AI supply chain, so its earnings act as a barometer for whether the AI spending boom is still accelerating — and its record quarter suggests, for now, that demand shows no sign of cooling.