TSMC August Revenue Surges 53% as AI Chip Demand Soars

According to TSMC, the company’s revenue rose 53.3% year over year in August, as it continues to expand production capacity to meet strong global demand driven by AI infrastructure investment.

TSMC reported August revenue of NT$514.8 billion (approximately US$16.3 billion). Analysts broadly expect the company’s sales to increase by 46.8% in the current quarter, reflecting continued demand for advanced semiconductor manufacturing.

TSMC has recently indicated that its production capacity is still struggling to keep pace with demand, despite expanding new facilities at an unprecedented rate. Cliff Hou, TSMC’s Senior Vice President and Deputy Chief Operating Officer, said the company is currently working to build and equip around 20 factories simultaneously across Taiwan and overseas, compared with the four or five new facilities typically handled at the same time in the past.

“The scale is now almost four to five times larger than before, yet even with these efforts, we still cannot fully meet demand,” Hou said. He added that TSMC’s demand for semiconductor manufacturing equipment has nearly doubled since the end of last year.

The company is also expected to increase investment in advanced manufacturing equipment. TSMC recently reached an agreement with ASML to introduce ASML’s most advanced High-NA extreme ultraviolet (EUV) lithography systems into high-volume manufacturing starting in 2030. TSMC had previously been cautious about deploying the technology because of its high cost, with each system reportedly priced at around US$400 million.

Charles Shum, an analyst at Bloomberg Intelligence, said market expectations may underestimate TSMC’s ability to maintain resilient profit margins in 2027. Current estimates call for revenue growth of 35% and earnings growth of 31% in 2027, implying that gross margin could decline from 66.4% in 2026 to 65.5%.

The expected margin pressure reflects several known factors, including the transition to TSMC’s 2nm process technology and the expansion of overseas manufacturing facilities, which are each expected to dilute gross margins by around 3 to 4 percentage points. In addition, TSMC’s capital expenditure budget of more than US$60 billion is expected to increase depreciation costs. However, some pricing adjustments that were originally expected in the second half of 2026 have been delayed until the first quarter of 2027, which could help offset part of the margin pressure.

In July, TSMC raised its full-year capital expenditure and revenue outlook, signaling confidence that strong demand for AI chips will continue through 2027 and beyond. The company expects 2026 capital expenditure to reach a record US$60 billion to US$64 billion and forecasts full-year revenue growth of more than 40% in U.S. dollar terms.

TSMC’s shares have gained approximately 60% since the beginning of the year, reflecting continued investor optimism over the company’s position in the rapidly expanding AI semiconductor market.