TSMC $TSM is riding high on the AI wave. The world’s largest contract chipmaker reported second-quarter earnings Thursday that blew past expectations, with net income jumping nearly 61% year over year to NT$398.3 billion ($12.7 billion) and revenue climbing almost 39% to NT$933.8 billion ($31.7 billion). Both figures beat Wall Street estimates and marked an all-time high for the company.
Behind the massive jump? Unrelenting demand for artificial intelligence chips.
High-performance computing (HPC) — a category that includes AI and 5G-related chips—accounted for 60% of TSMC’s revenue last quarter, up from 52% a year ago. The company manufactures advanced processors for big names like Nvidia $NVDA, Apple $AAPL, AMD $AMD, and Qualcomm $QCOM, and its most cutting-edge chips — those made with 7-nanometer processes or smaller — made up a whopping 74% of its total wafer revenue.
CEO C.C. Wei told investors TSMC now expects full-year revenue to grow around 30% in U.S. dollar terms, up from its previous forecast of 24%–26%. For the third quarter, the company is guiding for revenue between $31.8 billion and $33 billion — well ahead of what analysts were expecting.
Shares of TSMC rose nearly 4% in U.S. trading after the report.
That said, the company isn’t immune to broader risks. It’s watching for potential trade tensions with the U.S., including possible new tariffs on semiconductors. There's also the usual foreign exchange pressures and signs that demand from PC and smartphone makers could soften.
Still, with demand for AI infrastructure continuing to boom, TSMC’s positioning at the heart of the global chip supply chain gives it a major edge.