TSMC Q2 Revenue Up 33.7%, Full-Year Capex Raised to $64 Billion
0xBroomberg
TSMC posted Q2 revenue of $40.2 billion, up 33.7% year-on-year, with EPS beating consensus by 9.4%; full-year capex guidance was raised to $60–64 billion, forcing investors to weigh surging profits against near-term free-cash-flow pressure.
How strong was this quarter, really?
Revenue hit $40.2 billion, up 33.7% year-on-year; EPS — earnings per share, the profit each share earns — came in at $4.31, up 74%.
That EPS figure beat Wall Street consensus by $0.37, an overshoot of roughly 9.4%. This means → TSMC didn't just meet the bar — it cleared it by a wide margin.
In plain terms = the company earned more than expected, and it earned it faster than expected. Both growth quality and growth speed surprised to the upside.
Profits are surging — so why spend even more?
TSMC raised full-year capex guidance to $60–64 billion and added to its investment commitment in Arizona.
This means → management believes downstream demand — chiefly AI chips — is strong enough to justify locking in future capacity with massive spending now.
In plain terms = earn more, spend more. TSMC is betting real money that the AI-driven order wave is not a one-off but a multi-year trend.
What are investors worried about?
Heavy capex squeezes near-term free cash flow — the cash left after a company pays for everything it must, available for dividends or buybacks.
This reflects a classic semiconductor tension: the harder the expansion cycle, the thinner the near-term cash cushion, even when the long-run return outlook is brighter.
In plain terms = investors are staring at stellar profit numbers with one eye, and doing the math with the other: how long before all this factory spending turns into cash they can actually pocket?
Content is for reference only, not financial advice.