TSMC (TSM/2330 TT) provides guidance (TWD): Q2 Revenue 39-40.2bln (exp. 38.1bln), Gross Margin 65.5-67.5% (exp. 64.1%), Op. Margin 56.5-58.5% (exp. 55.3%)

• Raises FY26 Revenue above 30% (prev. saw "close" to 30%). (in USD terms).
• Adjusts FY26 Capex to upper end of prior forecast 52-56bln (prev. saw 52-56bln).

• AI is so strong.
• Demand is very robust and continues to increase. 
• To meet strong AI demand, are stepping up Capex to increase N3 capacity.
• Demand for chops will continue to be very fundamental.
• Customers provide us with very strong signals.
• Strategy to continue to optimise our capacity.
• High level of of customer interest for A14.
• Customers give a positive outlook.
• Both Intel (INTC) and Tesla (TSLA) are our customers, and competitors; Intel is a formidable competitor.
• Very confident in our tech position.

• Plans to wind down 6 inch Fab.
• Increasing Capex to boost 3NM capacity, to meet AI demand.
• Takes 2-3 years to build a new Fab.

• Too early to quantify Middle East war impact on profitability .
• Have safety stock in hand for helium and hydrogen.
• Do not expect a near term impact to operations from energy supplies.

TSMC's second-quarter guidance exceeds expectations across key metrics, indicating strong demand, particularly in AI, which aligns well with their strategic capacity expansion plans. This positive outlook could bolster confidence in tech equities, especially among competitors like Intel and Tesla, as they signal ongoing robust industry demand. The adjustments to their fiscal forecasts and capex underscore a commitment to capturing growth opportunities in a high-demand environment.