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.

TSMC shares closed at $426.35 on Friday, down 0.96%, and fell another 0.27% to $425.22 in after-hours trading.

Viking Global Investors has significantly reduced its exposure to Taiwan Semiconductor Manufacturing Co (TSMC), cutting its shareholding by 29.0%.

According to a filing with the US Securities and Exchange Commission (SEC), the hedge fund's stake now stands at 3.2 million shares. The disclosure highlights a notable shift in the investor's position regarding the semiconductor manufacturer.

Filing Details

The reduction was reported through standard regulatory disclosures required for large institutional investors. No additional commentary or strategic rationale was provided in the filing excerpt.