4 weeks ago
8
Adam Levy, The Motley Fool
Sat, July 18, 2026 astatine 8:11 AM CDT 4 min read
On Thursday, Taiwan Semiconductor Manufacturing (NYSE: TSM), amended known arsenic TSMC, released second-quarter net that blew distant expectations. But absorption besides noted it plans to summation its superior spending amid increasing request for precocious semiconductors. That includes different $100 cardinal committedness to physique caller facilities successful Arizona connected apical of its existing plans to walk $165 cardinal successful the U.S.
It seems the marketplace is wary of that accrued superior spending -- it sent shares little connected the news. But the sell-off the banal has been undergoing this period could beryllium a buying accidental for investors.
Missed Nvidia successful 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" awesome flashed for a little-known chipmaker called Nvidia. For the archetypal clip successful years, that aforesaid "Total Conviction" awesome is flashing for a institution 1/100th the size of Nvidia. Continue »
TSMC's insurmountable pb
Management was comparatively vague astir its $100 cardinal committedness to physique further facilities successful the U.S., but it was wide successful its plans to ramp up full accumulation capableness successful the 2nd fractional of 2026 and beyond. Management said it present expects superior expenditures for the twelvemonth betwixt $60 cardinal and $64 billion, up from its erstwhile outlook of $52 cardinal to $56 billion.
Investors are concerned, though, arsenic it's not wide however durable the maturation successful request for TSMC's leading-edge chips for AI information centers volition beryllium successful the agelong term. Its high-performance computing conception -- which is mostly comprised of AI chips -- accounted for two-thirds of TSMC's gross past quarter, and it was the fastest-growing extremity marketplace for the chipmaker arsenic well.
But respective factors should supply assurance successful TSMC's quality to present beardown returns connected its invested capital. In the adjacent term, absorption expects gross maturation to accelerate, forecasting full-year gross maturation of much than 40%. That maturation comes with highly precocious margins for the business. Its gross borderline was 67.7% past quarter, and its operating borderline reached 60.3%, year-over-year improvements of 9.1 percent points and 10.7 percent points, respectively.
What's more, TSMC's technological pb successful producing cutting-edge chips with debased defect rates astatine standard gives it important pricing power. It utilized that powerfulness to rise prices astatine the commencement of the year, and did truthful again past month. Combined with continued improvements successful the profitability of its 3-nanometer process node, it should nutrient beardown borderline expansion. That volition beryllium offset by the ramp-up of its caller 2-nanometer process, which is moving up of schedule.
.png)
English (CA) · 
English (US) · 
Spanish (MX) ·