Taiwan Semiconductor Manufacturing Co. is increasing its planned U.S. investment to $265 billion, adding $100 billion to expand its Arizona manufacturing campus. The move follows record quarterly results and comes as the company raises its capital spending outlook, citing sustained demand from cloud providers building out AI infrastructure.
The expansion will add more leading-edge fabrication plants and advanced packaging facilities to the Arizona site, further positioning it as a major AI chip manufacturing hub. Chairman and CEO C.C. Wei said cloud service providers, TSMC’s largest customer base, continue to signal strong and positive demand, reinforcing the company’s confidence in a multi-year AI growth trend.
Capital Spending and Revenue Both Rise
TSMC raised its 2026 capital spending budget to a range of $60 billion to $64 billion, up from a prior range of $52 billion to $56 billion. The company now expects full-year revenue growth of slightly more than 40% in U.S. dollar terms. Second-quarter revenue hit a record NT$1.27 trillion (about $40.2 billion), up 36% year over year, with net income climbing 77.4% and gross margin reaching 67.7%.
An analyst at Counterpoint Research said the higher spending and growth outlook confirm that the AI buildout cycle remains intact, describing the continued investment in leading-edge manufacturing and advanced packaging as a sign of structural rather than temporary demand.
High Performance Computing Now Dominates
High performance computing, which covers AI accelerators, CPUs, and networking silicon, accounted for 66% of second-quarter revenue, up from 61% in the prior quarter and 60% a year earlier. Smartphone revenue fell to 22% of the total, underscoring how central AI has become to TSMC’s business.
Wei noted that the rise of agentic AI is driving renewed demand for CPUs in AI data centers, adding to demand for AI accelerators. He said this trend benefits TSMC regardless of processor architecture, since the company manufactures chips for customers building on x86, Arm, and RISC-V designs.
Leading-Edge Nodes Drive Growth
TSMC’s newest 2-nanometer process generated 3% of wafer revenue in its first commercial quarter, while 3-nanometer and 5-nanometer technologies made up 30% and 33% respectively. Technologies at 7 nanometers and below represented 77% of total wafer revenue. Wei said third-quarter growth will again be led by leading-edge manufacturing, including a steep ramp of the 2-nanometer process.
Chief Financial Officer Wendell Huang said 70% to 80% of this year’s capital budget will fund advanced process technologies, with another 10% to 20% supporting advanced packaging and testing. Huang said the company does not foresee bottlenecks in its capacity expansion plans.
For data center operators and hosting providers watching the AI infrastructure buildout, TSMC’s expanded investment and raised outlook signal that chip supply for next-generation AI hardware continues to scale to meet demand.