TSMC's June revenue jumps 68% as AI chip demand outstrips supply

TSMC, the world's largest contract chipmaker, reported June 2026 revenue of NT$398.27 billion (roughly €10.8 billion), up 67.9% from June 2025. First-half 2026 revenue reached NT$2.4 trillion (about €65.4 billion), a 35.6% increase over the same period last year. The figures arrive ahead of TSMC's full second-quarter earnings report, due Thursday, and put quarterly revenue at approximately NT$1.27 trillion — above the NT$1.264 trillion analysts had forecast.

What's driving the surge

TSMC executives attribute the growth to what the company describes as “extremely robust” demand for AI processors, with one executive specifically pointing to the industry's shift from conversational chatbots toward agentic AI systems capable of independently executing multi-step tasks. That shift matters for TSMC's business because agentic systems require substantially more inference compute per task than a simple chat response — a shift in workload character that translates directly into higher chip demand, not just higher chip volume.

The advanced-node concentration

The revenue growth is concentrated at the leading edge of TSMC's manufacturing capability. Chips built on 7-nanometer or smaller process nodes accounted for 74% of wafer revenue in the first quarter, with the 3-nanometer node alone contributing 25% of that figure. This concentration underscores why TSMC's pricing power has grown alongside demand — customers building frontier AI accelerators have no viable alternative supplier at the leading edge, giving TSMC unusual leverage even as it faces its own capacity constraints.

Nvidia's outsized claim on capacity

Those capacity constraints are severe enough that Nvidia alone has reportedly reserved roughly 60% of TSMC's advanced chip-packaging capacity for 2026. That figure illustrates how concentrated AI chip demand has become around a small number of buyers, and it raises a structural question for the rest of the industry: any AI hardware company competing with Nvidia for TSMC's packaging capacity is negotiating for what's left after the largest customer has already claimed the majority share.

Guidance and expansion plans

TSMC is projecting full-year 2026 revenue growth exceeding 30% in US dollar terms, with capital expenditure planned between $52 billion and $56 billion as the company expands fabrication capacity in Arizona, Japan, and Germany. Thursday's full earnings report is expected to include updated guidance on profitability and progress on TSMC's 2-nanometer process technology, the next leading-edge node customers are counting on to keep pace with AI compute demand, as reported by Euronews.