Taiwan Semiconductor Manufacturing Company (TSMC) reported revenue of NT$1,270.38 billion for the second quarter of 2026, its latest reported quarter. NT$ stands for New Taiwan dollars, the currency TSMC reports in. That equals US$40.20 billion. High Performance Computing chips, the category that includes artificial intelligence (AI) processors, made up 66% of it.
TSMC does not sell chips under its own name. It manufactures chips that other companies design. This guide explains that model, what TSMC's revenue is made of, who its customers are and what it has announced lately. TSMC reports its third quarter on 15 October 2026, so no figure below includes that result.
What does TSMC do? TSMC is a foundry, a company that makes chips for other companies from their designs. Its shares trade in Taiwan. In New York, they trade as American depositary shares (ADS), each worth five TSMC shares, under the ticker TSM.
Chips built to the 3-nanometre and 5-nanometre sizes, a measure of how fine their circuits are, brought in 30% and 33% of wafer revenue in the second quarter of 2026. Wafer revenue is the money from making silicon wafers.
High Performance Computing chips were 66% of revenue in that quarter, against 58% across 2025.
On 16 July 2026, TSMC raised its 2026 capital spending plan, the money for factories and equipment, to US$60 billion to US$64 billion. It spent US$40.9 billion in 2025.
What is a foundry and what does TSMC do?
A foundry makes chips for customers. TSMC was founded in 1987 and calls itself a pure-play foundry, meaning it makes chips and sells none of its own design.
The chips are printed on wafers. A wafer is a thin disc of silicon. Many identical chips are printed on each one. TSMC counts its output in wafers converted to a standard 12-inch size.
TSMC's annual report, its Form 20-F, lists three kinds of customer. Fabless companies design chips and own no factory. System companies design chips for their own products. Integrated device manufacturers design and build their own chips.
Factories are costly. TSMC's capital spending was US$40.895 billion in 2025. A foundry serves many customers from the same factories. TSMC made 12,682 products for 534 customers in 2025.
For where a foundry sits between chip designers and machine makers, see our guide to the semiconductor value chain. The machines that print the circuits come from companies such as ASML (the Dutch maker of chip-printing machines), covered in What Does ASML Do?
How TSMC's wafer revenue splits by circuit size
Each chip is built to a circuit size, called a node and quoted in nanometres (nm). A nanometre is a billionth of a metre. A smaller number means finer circuits and a more advanced technology. TSMC calls 7 nanometres and below its advanced technologies.
Source: TSMC quarterly earnings releases (Form 6-K); YX Insights
Chart 1 shows each node's share of wafer revenue over five quarters. Wafer revenue was about 86% of TSMC's net revenue in 2025. The rest came mainly from packaging, testing, mask making, design and royalties.
In the second quarter of 2026, the 3-nanometre node brought in 30% of wafer revenue and the 5-nanometre node 33%. The 7-nanometre node brought in 11%. The 2-nanometre node, its newest in volume production, brought in 3%. Advanced technologies, meaning 7 nanometres and below, were 77% in total, against 74% in the second quarter of 2025.
Over the five quarters, the 3-nanometre share rose from 24% to 30%, while the 5-nanometre share fell from 36% to 33%.
Which products TSMC's revenue comes from
TSMC sorts its revenue by platform, meaning the end use of the chip. High Performance Computing (HPC) covers AI accelerators, server processors, personal computer processors and networking chips. The other platforms are smartphone, Internet of Things (IoT, meaning connected devices), automotive and digital consumer electronics.
Source: TSMC 2025 annual report (Form 20-F) and second quarter 2026 earnings slides; YX Insights
Chart 2 shows annual shares for 2023 to 2025 and one quarter. HPC was 43% of net revenue in 2023, 51% in 2024 and 58% in 2025. It was 66% in the second quarter of 2026.
Smartphone fell from 38% in 2023 to 29% in 2025. It was 22% in the second quarter of 2026. HPC revenue rose 48% in 2025, to NT$2,192.93 billion.
TSMC's customers: what the annual report discloses
TSMC does not name its customers in its annual report. It labels the two largest Customer A and Customer B. Customer A was 19% of 2025 net revenue, or NT$726.97 billion. Customer B was 17%, or NT$645.18 billion.
The ten largest customers together were 78% of 2025 net revenue. The other 524 customers shared the remaining 22%.
TSMC also sorts revenue by the country where a customer is headquartered. Customers headquartered in North America were 78% of net revenue in the second quarter of 2026, against 75% in 2025.
Capacity and capital spending
TSMC's annual capacity exceeded 17 million 12-inch equivalent wafers in 2025. It shipped about 15 million. In the second quarter of 2026 it shipped about 4.3 million.
A fab is a chip factory. TSMC's 2025 annual report lists 23 fabs, counting advanced packaging sites. Eighteen are in Taiwan. The other five are in the United States, China and Japan.
Capital spending was NT$1,272.41 billion in 2025, or 33.4% of net revenue. The annual report gave a 2026 plan of US$52 billion to US$56 billion. On 16 July 2026, TSMC raised it to US$60 billion to US$64 billion.
How profitable TSMC is
TSMC's quarterly results are prepared under TIFRS, meaning International Financial Reporting Standards (IFRS) as adopted in Taiwan. Its annual report is prepared under IFRS Accounting Standards.
Neither is US Generally Accepted Accounting Principles (GAAP). TSMC publishes no US GAAP reconciliation. The margins below are its reported figures in New Taiwan dollars, not adjusted or non-GAAP measures.
Source: TSMC quarterly earnings releases (Form 6-K); YX Insights
Chart 3 shows revenue and gross margin for five quarters. Gross margin is revenue minus the direct cost of production, as a share of revenue. It rose from 58.6% in the second quarter of 2025 to 67.7% in the second quarter of 2026.
Revenue rose 36.0% over those four quarters, from NT$933.79 billion to NT$1,270.38 billion. Operating margin, which is operating profit as a share of revenue, was 60.3%. Net profit margin, which is net income as a share of revenue, was 55.6%. Reported net income was NT$706.56 billion, or NT$27.25 per share (US$4.31 per ADS).
Latest developments, with dates
The latest reported quarter is the second quarter of 2026, April to June. On 16 July 2026, TSMC reported revenue up 36.0% from a year earlier in New Taiwan dollars and 33.7% in US dollars. Management said it expects 2026 revenue growth of slightly above 40% in US dollar terms.
The same day, TSMC announced a further US$100 billion investment in Arizona. It will build more fabs for 2-nanometre and smaller technologies, plus advanced packaging, which joins several chips into one unit.
On 11 August 2026, the board approved capital appropriations, meaning money authorised for projects, of about US$29.44 billion for advanced capacity, packaging and fab construction. It also approved a joint venture with Sony Semiconductor Solutions to make image sensors in Kumamoto, Japan, with volume production expected in 2029.
On 16 July 2026, management gave a range for the third quarter. The range was revenue of US$44.6 billion to US$45.8 billion, a gross margin of 65% to 67% and an operating margin of 56% to 58%. It assumes 32 NT dollars per US dollar.
That is management's own range, not our forecast. TSMC publishes the actual figures on 15 October 2026 at 14:00 Taipei time.
The risks and how to read TSMC's reports
Customer concentration is one risk. Customer A alone was 19% of 2025 net revenue.
Currency is another. Substantially all of TSMC's sales are in US dollars, but it reports in New Taiwan dollars. A stronger New Taiwan dollar lowers reported revenue. The annual report says this offset part of the 2025 increase.
Location and rules are a third. The annual report lists geopolitical tensions, tariffs and export controls among its risks. Most of its fabs are in Taiwan.
TSMC is a foundry. It made chips for 534 customers in 2025. In its latest reported quarter, 66% of its revenue came from High Performance Computing.
Common questions about TSMC
Is TSM the same as TSMC?
Yes. TSM is the New York ticker for TSMC's American depositary shares (ADSs). Each ADS represents five of TSMC's ordinary shares, which trade in Taiwan under the code 2330. TSMC's shares are quoted in New Taiwan dollars in Taiwan. The ADSs are quoted in US dollars in New York.
When does TSMC report its next results?
TSMC reports third-quarter 2026 results on 15 October 2026, with the conference at 14:00 Taipei time. It reported the second quarter on 16 July 2026. TSMC also publishes monthly revenue, with the October figure due on 10 November 2026.
Who are TSMC's biggest customers?
TSMC does not name them. Its annual report labels the two largest Customer A and Customer B, at 19% and 17% of 2025 net revenue. The ten largest customers were 78% together. Customers headquartered in North America were 78% of revenue in the second quarter of 2026.
How much does TSMC spend on new factories?
TSMC spent NT$1,272.41 billion, or US$40.895 billion, on capital projects in 2025. That was 33.4% of its net revenue. On 16 July 2026 it raised its 2026 plan to US$60 billion to US$64 billion. See the semiconductor value chain guide for context.
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