Taiwan Semiconductor Manufacturing NYSE:TSM, the world's largest contract chipmaker, jumped approximately 7% in Thursday's U.S. regular-session trading as Microsoft's results renewed investor confidence in AI infrastructure demand. The Philadelphia Semiconductor Index increased approximately 6.7%, placing it on course to end a five-session decline. Microsoft reported 43% Azure growth and maintained its underlying data-center expansion plans despite lowering its reported capital-spending forecast through an accounting change.
TSMC manufactures advanced processors designed by major customers across artificial intelligence, smartphones and high-performance computing. The company generated second-quarter revenue of $40.2 billion, representing a 36% year-over-year increase in New Taiwan dollar terms. TSMC reported a gross margin of 67.7% and an operating margin of 60.3%, both exceeding the upper ends of its earlier guidance ranges.
Management expects third-quarter revenue between $44.6 billion and $45.8 billion, with a gross margin ranging from 65% to 67%. The midpoint of the revenue forecast represents approximately 12.4% sequential growth from the second-quarter result. Microsoft's continued infrastructure expansion may support demand for processors manufactured using TSMC's advanced production technologies, although the financial effect will depend on customer orders and product mix. Investors may now focus on whether hyperscalers maintain their AI budgets and whether TSMC can expand advanced capacity without materially weakening its industry-leading margins.