TSMC is swimming in cash as the global AI boom shows no signs of slowing down. During the latest quarterly meeting, Chairman and CEO CC Wei shared that the company is upgrading its full year revenue growth forecast. Instead of the previous estimate of 30% growth, TSMC now expects its USD sales to surge by slightly over 40%. The momentum is real. To support this massive growth, the chipmaker is raising its capital budget to a range between $60 billion and $64 billion. Wei told investors that the world is watching a brand new AI industry take shape. Semiconductors are the bedrock of this tech shift, and TSMC is positioned right at the center.
Tech buyers are locking in orders years in advance. Signals from cloud service providers suggest that demand for artificial intelligence chips will stretch until at least 2029 or 2030. AI is rapidly moving past cloud data centers and entering factories, robotics, smart cities, and everyday consumer products. To keep up with these long term orders, the company is accelerating global factory construction. They are fast tracking developments for the upcoming A14 chip family, advanced packaging, and COUPE silicon photonics integration platforms.
The financial results of the second quarter tell a story of absolute dominance. Net revenue reached 1,270.3 billion Taiwan dollars, marking a 12% increase from the previous quarter and a 36% jump compared to last year. Net income after taxes stood at 706.56 billion Taiwan dollars. This is a 23.4% rise quarter over quarter and a massive 77.4% leap year over year. Earnings per share hit 27.25 Taiwan dollars, setting historic records for both revenue and profits. Analysts now predict that the company could end up making 10 times its capital stock in earnings for the full year.
Looking ahead to the third quarter, revenue is projected to fall between $44.6 billion and $45.8 billion. Using the midpoint of $45.2 billion, this points to a 12% sequential growth and a 37% annual climb. Gross margin is expected to settle between 65% and 67% with operating margin landing between 56% and 58%. These numbers are incredibly high, but they represent a slight dip from the previous quarter. Expanding production is expensive. Management admitted that the rapid scaling of the new 2 nanometer process will chip away 3% to 4% of the gross margin. Overseas factory startups will shave off another 2% to 3% initially, which could grow to 4% over time.
Agentic AI is changing how data centers are built. This shift is bringing the CPU back into the spotlight for high performance computing. Major chip design companies use TSMC factories to build their processors, regardless of whether they rely on x86, Arm, or RISC V architectures. More CPU orders mean the foundry is secure even if the demand for dedicated AI accelerators experiences a temporary drop. The market is simply expanding.
To support these expansion plans, TSMC is spending heavily. The leadership previously stated that capital spending over the next 3 years would be higher than the last 3 years. Now, they are calling it vastly higher
to match current market opportunities. If customers want chips, TSMC will build the factories. Right now, they are constructing 13 advanced fabrication and packaging facilities in Taiwan. Over in the US, they added $100 billion to their Arizona plans, bringing total investment there to $265 billion. Finally, they are building 3 new 3 nanometer factories across Taiwan, Japan, and the US to guarantee global supply.
