Taiwan Semiconductor Manufacturing Company (TSMC) reported a 67.9% year-on-year increase in June revenue on Monday, reaching NT$398.27 billion (€10.8 billion). The strong monthly performance pushed first-half 2026 revenue to NT$2.4 trillion (€65.4 billion), a 35.6% rise compared to the same period in 2025.
Based on the company's monthly disclosures, second-quarter revenue came in at approximately NT$1.27 trillion, slightly above the NT$1.264 trillion (€34.4 billion) consensus estimate from 20 analysts surveyed by LSEG. The figures underscore the sustained appetite for advanced semiconductors, particularly those used in artificial intelligence applications.
AI Demand Fuels Expansion
TSMC sits at the heart of a historic investment cycle in the semiconductor industry. The company manufactures the majority of the world's leading AI processors, including Nvidia's graphics processing units (GPUs) and custom AI chips designed by Amazon, Google, and Microsoft. At the company's April earnings presentation, CEO Che-Chia Wei described AI demand as "extremely robust," driven by a shift from simple chatbots to agentic AI systems capable of autonomous actions. This transition requires significantly greater computing power, boosting orders for TSMC's advanced nodes.
Advanced technologies—chips produced using processes of seven nanometres or smaller—accounted for 74% of TSMC's wafer revenue in the first quarter. Its three-nanometre technology alone contributed 25% of wafer revenue. Reports indicate that Nvidia has reserved roughly 60% of TSMC's advanced chip-packaging capacity for 2026, highlighting ongoing supply constraints in the AI semiconductor market.
To meet this demand, TSMC is expanding manufacturing capacity globally. New fabrication plants are under construction or in preparation in Arizona, Japan, and Germany. The German facility, located in Dresden, is particularly significant for Europe, as it aims to bolster the continent's semiconductor self-sufficiency amid geopolitical tensions and supply chain vulnerabilities. This aligns with broader EU efforts to reduce reliance on Asian chip production, a topic that has gained urgency as global trade dynamics shift.
Financial Outlook and Investor Focus
TSMC will publish its full second-quarter earnings on Thursday, including net profit, gross margin, operating margin, and updated financial guidance. At its April earnings presentation, the company forecast full-year 2026 revenue growth of more than 30% in US dollar terms and projected capital expenditure between $52 billion (€45.5 billion) and $56 billion (€49 billion). These investments are aimed at expanding capacity to meet AI-driven demand.
Shares in TSMC rose about 1% following Monday's revenue update. Investors will now focus on Thursday's report for details on profitability, margins, and the rollout of the company's two-nanometre manufacturing technology, which is already attracting strong customer interest. The two-nanometre node is expected to further solidify TSMC's technological lead and drive future revenue growth.
The company's performance also has broader implications for European markets. As TSMC expands its global footprint, including its Dresden plant, it could help alleviate chip shortages that have affected European automakers and industrial firms. However, the concentration of advanced chip production in Taiwan remains a strategic risk, particularly given tensions in the Taiwan Strait. European policymakers have been exploring ways to diversify semiconductor supply chains, a challenge that intersects with other geopolitical issues, such as the disruptions in global shipping routes.
In the near term, TSMC's earnings will provide a key indicator of the health of the AI sector and the broader technology industry. With demand showing no signs of abating, the company is well-positioned to maintain its growth trajectory, though investors will be watching for any signs of margin pressure or shifts in customer demand.
