Taiwan Semiconductor Manufacturing Co.’s (NYSE: TSM) Arizona operations are on track for a sharp profit increase this year as demand for advanced artificial intelligence chips accelerates the company’s U.S. expansion.

The new Arizona plant generated about NT$36.1 billion ($1.13 billion) in cumulative profit during the first half of 2026, compared with NT$16.1 billion ($504.6 million) for all of 2025, according to Taiwan’s Money UDN.

What the Numbers Show

The Arizona operation posted roughly NT$18.8 billion ($589.2 million) in profit in the first quarter alone. Of this amount, approximately NT$16.9 billion ($529.66 million) was derived from investment income. This indicates that investment returns accounted for roughly 90% of the Q1 profit, highlighting a significant non-operational contribution to the early-year financial performance.

Operational Drivers and Expansion

The strong performance is attributed to increased customer orders, demand for geographically diversified production, and smoother supply-chain coordination. Analysts expect TSMC’s full-year profit from the U.S. operation to improve significantly as production scales and the company benefits from economies of scale.

TSMC reported strong overall demand for its leading-edge technologies in the second quarter:

• 2nm nodes accounted for 3% of wafer revenue.
• 3nm nodes contributed 30% of wafer revenue.

The Arizona expansion is moving faster than expected. Construction of its third wafer fab began in May, with the facility expected to support 2nm and A16 production. The third fab could begin mass production around 2028, potentially several quarters earlier than previously anticipated.

The second Arizona fab, designed for 3nm production, has been completed and is expected to receive equipment in the second half of 2026, with mass production targeted for the second half of 2027.

Investment and Revenue Growth

TSMC Chairman CC Wei previously stated the company would add another $100 billion to its U.S. investment, bringing its planned Arizona commitment to $265 billion. This investment is driven by strong, multi-year demand from U.S. customers for advanced AI and high-performance computing chips.

In July, TSMC reported consolidated revenue of approximately NT$467.58 billion, marking a 44.7% increase from NT$323.17 billion a year earlier. July revenue also rose 5.6% from NT$442.68 billion in June.

Stock Performance and Technical Setup

TSMC shares closed at $426.35 on Friday, down 0.96%, and fell another 0.27% to $425.22 in after-hours trading. On Tuesday, the stock traded lower as investors took profits amid a broader market pullback, with Nasdaq futures down 1.13% and S&P 500 futures shedding 0.42%. In premarket trading, shares fell 2.72% to $419.26.

Technically, Taiwan Semiconductor remains in a longer-term uptrend, trading 15.2% above its 200-day simple moving average of $364.14. However, it is 1.3% below its 50-day SMA of $424.88. The stock is roughly flat against its 20-day exponential moving average of $419.39 and remains above its 20-day SMA of $413.57. The 20-day SMA remains below the 50-day SMA, signaling near-term weakness, while the 50-day SMA remains above the 200-day SMA, supporting the longer-term bullish trend. Resistance sits near $477, just below the 52-week high of $479. Key support is around $385.50.

Taiwan Semiconductor (NYSE: TSM) has generated an average annual return of 21.32% over the last 20 years, significantly outperforming the broader market by 11.96% on an annualized basis. The semiconductor manufacturer currently commands a market capitalization of $2.23 trillion.

An investor who purchased $1,000 worth of TSM stock 20 years ago would see that position valued at $47,270.08 today, based on the stock price of $429.69 at the time of writing.

What the Numbers Show

The data illustrates the compounding effect of consistent high returns over a long horizon. The difference between TSM’s annualized return (21.32%) and the market’s implied return (approximately 9.36%, derived from the 11.96% outperformance) resulted in a nearly 47-fold increase in capital value for early investors.