Taiwan Semiconductor Manufacturing Company is expected to deliver a fifth consecutive quarter of record earnings as demand for artificial intelligence chips and advanced packaging remains strong.

Reuters reports that analysts expect second-quarter net profit to rise 59% year on year to $19.65 billion. Quarterly revenue has already increased 36% to a new record.

The result matters beyond $TSM. TSMC manufactures advanced chips for major technology companies, including its 3-nanometre and 2-nanometre processes and CoWoS packaging.

Investors will focus on whether management raises its full-year growth outlook and increases 2026 capital spending. Guidance is near the upper end of $52 billion to $56 billion, while some analysts see $58 billion.

Winners

AI processor and custom-chip designers

These companies could benefit if production and packaging demand remains stronger than capacity. Nvidia relies on TSMC for AI accelerators, AMD for data-centre chips, and Broadcom for custom AI silicon and networking products.

Strong guidance would suggest cloud companies are still placing large orders and the AI cycle remains healthy.

Names: $NVDA (Nvidia), $AMD (Advanced Micro Devices), $AVGO (Broadcom)

Semiconductor equipment suppliers

A higher capital-spending forecast would support suppliers of deposition, etching, inspection and process-control equipment. TSMC needs more machinery to expand 2-nanometre manufacturing and advanced packaging.

A move toward $58 billion would improve equipment-order expectations.

Names: $AMAT (Applied Materials), $LRCX (Lam Research), $KLAC (KLA)

Memory and data-centre networking

AI processors require high-bandwidth memory and faster server connections. Micron could benefit from HBM demand, Marvell from custom silicon and optical connectivity, and Arista from AI data-centre construction.

Names: $MU (Micron Technology), $MRVL (Marvell Technology), $ANET (Arista Networks)

Losers

Competing semiconductor foundries

TSMC’s growth reinforces its manufacturing leadership. Intel is spending heavily to attract outside customers, but strong demand and loyalty at TSMC may make contracts harder to win.

GlobalFoundries focuses on mature processes, giving it less exposure to advanced AI chips.

Names: $INTC (Intel), $GFS (GlobalFoundries)

Traditional analogue and mature-node chipmakers

These companies could lag if investors keep shifting capital toward AI semiconductor stocks. Their businesses depend more on industrial, automotive and consumer demand, where recoveries may be slower.

Strong TSMC guidance could widen the valuation gap between AI leaders and traditional chipmakers.

Names: $TXN (Texas Instruments), $ADI (Analog Devices), $MCHP (Microchip Technology)

Customers exposed to capacity and cost pressure

Limited advanced-node and packaging capacity may strengthen TSMC’s pricing power. Apple and Qualcomm need advanced manufacturing for premium devices, while Dell depends on processors and accelerators for AI servers.

Higher component prices, supply delays or competition for capacity could pressure margins and product schedules.

Names: $AAPL (Apple), $QCOM (Qualcomm), $DELL (Dell Technologies)

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