TSMC Q2 2026 — The Node Everyone Needs Just Sold Out

The setup

TSMC walked into the July 16 print with the top line essentially pre-announced — the company reports monthly sales, and June closed a quarter no one doubted. The bar was never revenue; it was margin durability and forward commitment. Could gross margin hold above 65% while the company absorbs N2 start-up costs, how hard would capex get pushed, and would management concede that leading-edge demand is running ahead of a supply base it has spent two years expanding? On all three the answer came in hot.

The answer, in a sentence: demand is outrunning supply, margins made a new high anyway, and management put more capacity money behind the view.

The numbers

Consolidated revenue was NT$1,270.38B (US$40.2B), up 33.7% year-over-year in dollar terms and 12.0% sequentially — a record. Net income was NT$706.56B with diluted EPS of NT$27.25 (US$4.31 per ADR), both up 77.4% year-over-year and 23.4% quarter-over-quarter. The margin stack is the story: gross margin 67.7%, operating margin 60.3%, both all-time highs, with net margin at 55.6%. High-performance computing was 66% of revenue and the advanced-technology mix (7nm and below) reached roughly 77%. N2 contributed for the first time at about 3% of wafer revenue, up from zero in Q1. Alongside the print, TSMC announced an additional US$100B Arizona investment.

The guide extends the setup rather than softening it. Q3 2026 is set at US$44.6–45.8B in revenue, with gross margin of 65–67% and operating margin of 56–58% — the midpoint GM of ~66% is about 1.7 points below Q2, and management tied the step-down primarily to N2 ramp costs. Full-year 2026 revenue growth was framed at "slightly above 40%" in US-dollar terms, and 2026 capex was raised to US$60–64B. Management also guided that N2 start-up costs will dilute gross margin by roughly 3–4 points in the second half.