Taiwan Semiconductor Reports Q2 2026 Results: Full Earnings Call Transcript

Taiwan Semiconductor (NYSE: TSM ) reported second-quarter financial results on Thursday.

The transcript from the company's second-quarter earnings call has been provided below.

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Access the full call at Summary Taiwan Semiconductor Manufacturing Co Ltd reported a strong second quarter with advanced technology nodes (7nm and below) contributing 77% of wafer revenue.

HPC platform revenue increased significantly by 20% quarter-over-quarter, while smartphone revenue decreased slightly.

The company ended the quarter with cash and marketable securities of $110 billion and expects third quarter revenue to rise 12% sequentially.

Gross margin improved to 67.7% in Q2 but is expected to decrease slightly in Q3 due to the ramp-up of the 2nm technology.

TSMC plans a significant capital investment in 2026, increasing its budget to $60-$64 billion, driven by strong demand in 5G, AI, and HPC sectors.

The company announced an additional $100 billion investment in Arizona for new fabs to meet strong demand from U.S. customers.

TSMC is maintaining a focus on capacity expansion in both advanced and mature nodes, with strategic investments in Taiwan, the U.S., and Japan.

Management expressed confidence in the strong multi-year demand driven by AI, emphasizing robust collaboration with customers.

Full Transcript Jeff Hsu, Director of Investor Relations Good afternoon everyone and welcome to TSMC's second quarter 2026 earnings conference.

This is Jeff Hsu, TSMC's Director of Investor Relations and your host for today.

Today's event is being webcast live through TSMC's website at where you can also download the earnings release materials.

If you are joining us through the conference call, your dial-in lines are in listen-only mode.

The format for today's event will be as follows.

First, TSMC's Senior Vice President and CFO Mr.

Wendell Huang will summarize our operations in the second quarter 2026, followed by our guidance for the third quarter 2026.

Afterwards, Mr.

Huang and TSMC's Chairman and CEO Dr.

C.C.

Wei will jointly provide the company's key messages.

Then we will open both the floor and the line for the question and answer session as usual.

I'd like to remind everybody that today's discussions may contain forward-looking statements that are subject to significant risks and uncertainties which could cause actual results to differ materially from those contained in the forward-looking statements.

Please refer to the safe harbor notice that appears in our press release.

And now I would like to turn the microphone over to TSMC CFO Mr.

Wendell Huang for the summary of operations and the current quarter guidance.

Wendell Huang, Senior Vice President and CFO Thank you, Jeff.

Good afternoon everyone.

Thank you for joining us today.

My presentation will start with financial highlights for the second quarter of 2026.

After that, I will provide the guidance for the third quarter of 2026.

Now let's move on to revenue by technology.

2 nanometer process technology contributed 3% of wafer revenue in the second quarter.

3 nanometers, 5 nanometers, and 7 nanometers accounted for 30%, 33%, and 11% respectively.