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The headline’s 52% figure refers to TSMC’s Q2 2024 results, when its high-performance computing (HPC) platform first exceeded half of revenue. The latest second-quarter results, announced July 16, 2026, show HPC at 66% of revenue and a much larger quarter: US$40.20 billion in revenue and NT$706.56 billion in net income. HPC includes AI-related products, but it is not the same as AI revenue.
How TSMC’s Q2 results changed from 2024 to 2026
TSMC’s Q2 2024 earnings were a record at the time. Two years later, Q2 2026 set a substantially higher bar for revenue and profit. The table compares the two quarters; it shows the scale and mix shift, not that AI alone caused every change.
| Metric | Q2 2024 | Q2 2026 |
|---|---|---|
| Revenue | NT$673.51 billion / US$20.82 billion | NT$1,270.38 billion / US$40.20 billion |
| Year-over-year revenue growth | 40.1% in NT dollars; 32.8% in U.S. dollars | 36.0% in NT dollars; 33.7% in U.S. dollars |
| Net income | NT$247.85 billion | NT$706.56 billion |
| Diluted EPS | NT$9.56 / US$1.48 per ADR unit | NT$27.25 / US$4.31 per ADR unit |
| Gross margin | 53.2% | 67.7% |
| Operating margin | 42.5% | 60.3% |
| Advanced technologies’ share of wafer revenue | 67% | 77% |
| HPC share of total revenue | 52% | 66% |
Sources: TSMC Q2 2024 earnings release and TSMC Q2 2026 earnings release. ADR earnings per share are U.S.-dollar figures per ADR unit; they are not Taiwan-listed ordinary-share EPS converted directly.
What TSMC means by HPC—and what the percentage does not mean
HPC is TSMC’s High Performance Computing platform category. It encompasses AI accelerators as well as CPUs, GPUs, data-center processors, networking silicon and other high-performance computing products. As a result, 66% means that products classified by TSMC as HPC accounted for that share of its revenue; it does not mean that 66% was AI-chip revenue.
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TSMC’s platform percentages use total revenue as the denominator. Its process-node percentages use wafer revenue. Those are different classifications, so the figures should not be combined as if they measured the same slice of the business. TSMC’s Q2 2024 earnings transcript discusses AI-related demand within a broader HPC platform.
What drove the mix shift and larger results?
Leading-edge manufacturing and computing demand
In Q2 2024, TSMC said strong demand for 3nm and 5nm technologies supported results, partly offset by smartphone seasonality. HPC revenue rose 28% sequentially to 52% of revenue, while smartphone revenue represented 33%. By Q2 2026, HPC was 66% and smartphone was 22% of revenue.
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In Q2 2024, 3nm, 5nm and 7nm made up 15%, 35% and 17% of wafer revenue, respectively. In Q2 2026, 2nm represented 3%, 3nm 30%, 5nm 33% and 7nm 11%; advanced technologies—7nm and more advanced—totaled 77% of wafer revenue. These figures indicate a shift toward newer processes, but they do not isolate how much of the shift came from AI versus other products, customer ramps or changes in the overall mix.
More than one factor affects the share
A platform’s percentage can rise because its revenue grows, because other platforms grow more slowly or decline, or both. Alongside demand for AI and data-center infrastructure, HPC includes non-AI processors and networking products. Smartphone seasonality can also change the relative share even if smartphone revenue does not disappear. TSMC has also emphasized the role of advanced packaging in serving complex computing systems.
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TSMC CEO C.C. Wei said in the Q2 2026 transcript that AI-related demand remained extremely robust and that cloud-service-provider customers continued to give strong demand signals. That is management’s assessment, not proof that spending will continue at the same pace. See the Q2 2026 earnings transcript.
Why the margin expansion matters
Revenue growth was accompanied by sharply higher margins: gross margin increased from 53.2% in Q2 2024 to 67.7% in Q2 2026, while operating margin rose from 42.5% to 60.3%. Net profit margin was 36.8% in Q2 2024 and 55.6% in Q2 2026. This points to more than a larger sales base; profitability also improved.
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For Q2 2026, TSMC attributed sequential gross-margin improvement mainly to cost improvements and higher utilization, partly offset by overseas-fab dilution. It also warned that the steep 2nm ramp could reduce gross margin by roughly 3–4 percentage points in the second half of 2026. That forecast is a management estimate, not a reported outcome.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Capacity investment: growth opportunity and execution risk
TSMC narrowed its 2024 capital-expenditure budget to US$30 billion–US$32 billion. It allocated 70%–80% to advanced process technologies, 10%–20% to specialty technologies and about 10% to advanced packaging, testing, mask-making and other activities. In 2026, it raised its capital budget to US$60 billion–US$64 billion, directing most of it toward advanced technologies. Management linked the investment to structural demand for AI, HPC, 5G and emerging agentic-AI applications.
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Building capacity can let TSMC serve future demand, but the spending creates risks as well as opportunity. New fabs and process ramps take time, require execution, and can raise depreciation before capacity is fully utilized. Overseas facilities may dilute margins, and capacity built for a strong upcycle could be underused if customer demand slows. Capital spending does not guarantee a particular return.
What TSMC forecast after Q2 2026
For Q3 2026, TSMC guided to revenue of US$44.6 billion–US$45.8 billion, gross margin of 65%–67%, and operating margin of 56%–58%. The midpoint of its revenue range implies approximately 12% sequential growth and approximately 37% year-over-year growth, according to the earnings transcript. The company also expected 2026 revenue growth to be slightly above 40% in U.S.-dollar terms. Guidance and full-year outlook are forward-looking estimates, not guarantees.
For context, after Q2 2024 TSMC had guided to Q3 revenue of US$22.4 billion–US$23.2 billion, gross margin of 53.5%–55.5%, and operating margin of 42.5%–44.5%. The difference between those outlooks illustrates how much the company’s scale and profitability expectations have changed.
What could interrupt the AI-driven growth story?
- Spending digestion: Cloud providers and other customers could pause or slow infrastructure purchases after a period of rapid investment.
- Customer concentration: A limited number of large chip designers and cloud customers can have an outsized influence on orders, even though TSMC does not attribute a specific share of quarterly revenue to individual customers in these results.
- Capacity and technology execution: Advanced-node production and packaging capacity must ramp on schedule; underutilization would weaken the economics of expensive facilities.
- Geographic and operating costs: Overseas-fab start-up costs can weigh on margins, while exchange-rate movements affect reported results across currencies.
- Industry and external shocks: Semiconductor cyclicality, competition, changing customer orders, capacity management challenges and natural disasters can all affect performance.
TSMC’s earnings materials caution that forward-looking statements may differ materially because of market conditions, cyclicality, customer orders, competition, capacity management, natural disasters and foreign-exchange movements. Its results establish that HPC has become a much larger part of the business; they cannot establish how long the current demand cycle will last.
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