Taiwan Semiconductor Manufacturing Co. NYSE:TSM, the Taiwanese producer of most of the world's most advanced chips for data centers and smartphones, reported a 36% increase in quarterly sales as global demand for AI computing continued to support its business. Revenue for the June quarter reached NT$1.27 trillion, or approximately $39.6 billion, matching the average analyst estimate, while June sales alone climbed 67.9% year over year to NT$442.7 billion. The performance reinforces TSMC's position as the main chip manufacturer for NVIDIA NASDAQ:NVDA, an AI-chip designer, and Apple, a consumer technology company, while suggesting that demand for AI and server processors may be strong enough to offset weakness in smartphones and personal computers.
The results also provide another indication that the global AI infrastructure expansion remains active, with spending by companies such as Meta Platforms, a technology company building AI computing capacity, expected to help push industry investment above $725 billion this year. TSMC Chief Executive Officer C.C. Wei warned in June that the company may remain unable to meet demand from American customers for years, despite additional manufacturing capacity coming online in the United States. SK Hynix (HXSCL), a South Korean producer of conventional and high-bandwidth memory chips used in AI systems, expects memory shortages to continue beyond 2030 as data-center operators increase spending, although the strength of these demand signals did not prevent a regional technology selloff that pushed SK Hynix shares lower and weighed on Tokyo Electron, a major supplier of chipmaking equipment to TSMC.
Investors are now expected to focus on TSMC's full earnings report on Thursday and its July 16 earnings call for further details on pricing, gross margins, capacity constraints and capital spending in 2026. Bloomberg Intelligence analyst Charles Shum said June revenue placed second-quarter sales near the upper end of TSMC's $39 billion to $40.2 billion guidance and argued that stronger pricing could move the company's gross-margin outlook above the 67.1% consensus estimate and closer to the 67.5% upper end of guidance. TSMC has indicated that it will allocate close to a record $56 billion to capital expenditures this year and is directing an estimated $265 billion toward an advanced manufacturing campus in Arizona, while investors continue assessing rising borrowing among data-center operators, uncertain returns from AI investment, Intel's EMIB-T packaging initiative and Tesla's Terafab ambitions.