Taiwan Semiconductor Manufacturing ADR, listed on NYSE, is under pressure despite posting strong second-quarter earnings. TSMC ADR is down over 2% in the initial minutes of trade on Thursday.
The fall in the TSMC ADR could be on the back of concerns arising after a selloff in chipmakers in other markets. Investors are getting more cautious about whether significant investments in artificial intelligence will validate high valuations.
US equity markets opened lower on Thursday, driven by volatility in the speculative chip sector and economic data indicating a hawkish Federal Reserve.
The S&P 500 dropped 0.3%, the Nasdaq Composite fell by 0.6%, while the Dow remained flat, in the initial trades.
Chip producers faced sharp declines amid skepticism about potential reductions in capital expenditure by AI hyperscalers. Additionally, Korea’s prohibition on leveraged ETFs and advancements in machine efficiency by ASML further dampened speculative demand in the sector.
According to the White House and the Department of Commerce, TSMC has announced an incremental $100 billion investment, bringing the total to $265 billion in the U.S. This investment will result in four additional advanced semiconductor manufacturing facilities, bringing the total to 12 leading-edge semiconductor and packaging facilities.
This follows the March 2025 announcement with President Trump and Secretary Lutnick, in which TSMC agreed to expand its original $65 billion investment commitment by an additional $100 billion.
Taiwan Semiconductor Manufacturing Co (TSMC) on Thursday announced consolidated revenue of NT$1,270.38 billion, net income of NT$706.56 billion, and diluted earnings per share of NT$27.25 (US$4.31 per ADR unit) for the second quarter ended June 30, 2026.
This is a 77.4% jump in second-quarter net profit for the world’s largest contract chipmaker, beating market forecasts. The strong results show the surging global demand for its artificial intelligence processors. The numbers make it clear that AI is no longer a side story for TSMC; it is now the primary engine of growth.
TSMC deployed 305 distinct process technologies, and manufactured 12,682 products for 534 customers in 2025 by providing the broadest range of advanced, specialty and advanced packaging technology services.
Taiwan Semiconductor Manufacturing Co, whose customers include Nvidia and Apple, saw April-June net profit rise to $21.99 billion. (at an exchange rate of $1 = 32.2340 Taiwan dollars).
On a consolidated basis, revenue for June 2026 was approximately NT$442.68 billion, an increase of 6.2 percent from May 2026 and an increase of 67.9 percent from June 2025. Revenue for January through June 2026 totaled NT$2,404.48 billion, an increase of 35.6 percent compared to the same period in 2025.
The Taiwanese tech giant reported a record high net income for the quarter ending in June, marking the fifth consecutive quarter of growth, with a significant increase of 23.4% compared to the previous quarter and a 12% increase in revenue. Year-over-year, second-quarter revenue increased 36%, while net income and diluted EPS both increased 77.4%.
In US dollars, second-quarter revenue was $40.20 billion, which increased 33.7% year-over-year and increased 12.0% from the previous quarter. Gross margin for the quarter was 67.7%, operating margin was 60.3%, and net profit margin was 55.6%.
Q3 Guidance from Management
Based on the Company’s current business outlook, management expects the overall performance for the third quarter of 2026 to be as follows:
Revenue is expected to be between US$44.6 billion and US$45.8 billion;
Gross profit margin is expected to be between 65% and 67%;
Operating profit margin is expected to be between 56% and 58%.
If the projections hold, TSMC would be looking at yet another strong quarter, extending its current run of growth.
TSMC Share Price
TSMC ADR listed on NYSE under the ticker TSM fell 0.22% on Wednesday, and despite the strong financial results, the ADR is down by over 2% on Thursday. TSMC, with a market cap of $1.97 trillion, has gained over 70% in one year and is up by over 35% YTD.
The company, recognized as Asia’s most valuable, attributes this growth to the robust demand for AI chips produced for major global technology firms such as Nvidia, Apple, and Broadcom.
TSMC Board of Directors had earlier approved NT$7.00 cash dividend for the first quarter of 2026 and set September 16, 2026 as ex-dividend date, September 22, 2026 as the record date and October 8, 2026, as the distribution date.
Risks
Behind the headline numbers, however, sits a concentration risk that investors continue to watch closely. Over the years, the company’s customer profile and the nature of the company’s customers’ business have changed dramatically. While TSMC generates revenue from hundreds of customers worldwide, TSMC’s ten largest customers in 2023, 2024, and 2025 accounted for approximately, 70%, 76% and 78% of TSMC’s net revenue in the respective years.
TSMC’s largest customer in 2023, 2024 and 2025 accounted for 25%, 22% and 19% of the Company’s net revenue in the respective year. TSMC’s second largest customer in 2023, 2024 and 2025 accounted for 11%, 12% and 17% of TSMC’s net revenue in the respective year. This rising reliance on a handful of customers means any slowdown in orders from even one of them could have an outsized impact on TSMC’s future results.
Disclaimer: This content is for informational purposes only and should not be construed as investment advice. This article is based on TSMC’s official earnings announcement and publicly available market data. Third-quarter projections are management estimates, not guarantees of future performance. Readers are advised to consult a qualified financial advisor before making any investment decisions.
