The Number
$40.20 billion in second-quarter revenue is the figure Taiwan Semiconductor Manufacturing (NYSE:TSM | TSM Price Prediction) disclosed in its 6-K filing on July 16, 2026, a record top line for the world’s largest contract chipmaker. Revenue climbed 36.0% year over year, and diluted ADR earnings landed at $4.31, beating the $3.89 consensus by 10.89%. This is reported revenue, not guidance.
What It Means
The scale here reflects a business that has become the utility layer of the AI hardware buildout. Advanced process technologies at 7nm and below accounted for 77% of total wafer revenue, with 5nm at 33% and 3nm at 30%. High-performance computing represented 66% of TSM revenue, the direct read-through from insatiable AI accelerator orders. Gross margin came in at 67.7%, the top of guidance and up 9.1 percentage points year over year. Wafer shipments rose 16.6% to 4,336 thousand 12-inch equivalents, meaning most of the revenue lift came from mix and pricing rather than pure volume.
Market Reaction
Shares traded at $423.48 at filing on July 16, 2026, and $409.35 one hour later, a decline of roughly 3.3% in the immediate window. The stock has still returned 78.95% over the past year and 38.73% year to date heading into the report. The pullback mirrors the pattern from the prior beat, when the Q4 2025 report closed up just 0.22% before recovering.
Strategic Outlook
Management raised full year 2026 revenue growth expectations to slightly above 40% in US dollar terms, up from the prior close to 30% outlook. Q3 revenue guidance of $44.60 billion to $45.80 billion implies continued acceleration. The 2nm node made its commercial debut at just 3% of wafer revenue, signaling that the largest node transition in the roadmap has barely begun. A steep 2nm ramp is expected in Q3, which pressures gross margin guidance to 65% to 67%. Capital expenditures reached $496 billion NT (up 65.57% YoY), funding the capacity to absorb that ramp.
Bottom Line
The $40.2 billion print validates the raised guide and confirms that AI-driven wafer demand is compounding rather than plateauing. With 2nm at only 3% of wafer mix, the mix shift that has driven margin expansion has the largest leg still ahead. The next catalyst is Q3 execution against the $44.60 billion to $45.80 billion range, where investors will judge whether the 2nm ramp costs are absorbed cleanly. Keep an eye on the stock into that report.
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