TSMC Overseas Fabs H1 2026: Arizona Profits Surge 663%, Japan Turns Profitable
Nashnova编辑部
TSMC's Arizona fab posted NT$36.07 billion in net profit for H1 2026, up roughly 663% year-on-year, while its Japan subsidiary swung to profit. The overseas buildout is shifting from cash burn to cash generation.
Arizona profit up 663% — where did the money come from?
The Arizona fab earned NT$36.07 billion in H1 2026 net profit, versus just NT$4.73 billion a year earlier.
TSMC holds 100% of the fab and booked NT$31.15 billion in investment income — about 2.44% of its H1 consolidated net profit of roughly NT$1.28 trillion.
This means → Arizona has flipped from a financial drag to a measurable profit contributor. The share is still small, but the growth rate is striking.
Why did Q2 actually dip quarter-on-quarter?
Arizona's Q2 investment income was roughly NT$14.60 billion, down about 13.6% from Q1's NT$16.91 billion.
The culprit: ongoing construction of P2 and later phases, which pile on depreciation, amortization, and operating costs.
In plain terms = the first fab is making money, but the second is still being built. Stack both ledgers together and quarterly profit gets dragged down.
Japan turned profitable, Germany still losing — what explains the gap?
Japan subsidiary JASM (TSMC stake: ~73%) lost NT$6.22 billion in H1 2025 but swung to a NT$1.68 billion profit in H1 2026. TSMC booked NT$1.22 billion in investment income.
Germany subsidiary ESMC (stake: ~70%) lost NT$693 million in H1 2026, widening from NT$689 million for all of 2025. It remains in the construction phase.
This reflects a simple timeline difference: Japan has started volume production; Germany is still installing equipment.
How are the China fabs performing?
TSMC's China subsidiary posted NT$5.81 billion in H1 net profit, roughly flat with NT$5.57 billion a year earlier.
The Nanjing fab earned NT$14.98 billion in H1 net profit; TSMC booked NT$14.90 billion in investment income.
Both fabs run mature nodes. Profits are steady but not growing — their role is "stable cash cow."
Subsidies are falling while tax breaks are rising — what does that signal?
In full-year 2025, TSMC received roughly NT$7.63 billion in combined government support from the U.S., Germany, Japan, and China. In H1 2026 that figure dropped to about NT$590 million.
Meanwhile, the investment tax credit rate applicable to the Arizona fab rose from 25% to 35%, effective January 1, 2026.
This means → the overseas fabs are transitioning from "subsidized life support" to "tax-break cost reduction." The former is one-off; the latter is recurring — a better setup for long-term margins.
What is the market watching next?
The key proof point: whether P2 and later-phase construction costs can be absorbed smoothly.
The Q2 quarter-on-quarter dip already flags this pressure — depreciation from new phases will weigh for several more quarters.
In plain terms = the story of "the first Arizona fab makes money" is established. The real test is whether profitability holds as more fabs come online.
Content is for reference only, not financial advice.