TSMC's 2nm Strategy Strengthened by ASML Orders, Solidifying Its Leading Position

Recent financial and operational news from TSMC confirms its solid leadership in the global semiconductor industry. According to it’s latest conference call, TSMC not only delivered an impressive third-quarter performance but also raised its full-year revenue guidance, all while outlining a clear roadmap for future technology and capacity expansion.

First, TSMC's financial performance is its greatest source of confidence. Based on the conclusions of its earnings call, TSMC's third-quarter gross margin and earnings per share both exceeded expectations. This reflects not only effective cost control but also a healthy utilization rate for its high-end process capacity. Even more encouraging, the company raised its full-year revenue growth forecast to 34-36%—the second upward revision this year—clearly signaling strong market demand, particularly from the AI sector.

Second, TSMC's ambition in technology and capacity expansion remains strong. ASML's robust order book indirectly confirms that TSMC is accelerating its expansion efforts. TSMC is not only ASML's largest customer but also holds over 60% of the world's EUV equipment capacity. It plans to continue adding more EUV machines over the next two years to aggressively push its 2nm advanced process. This determination is also reflected in TSMC's increased capital expenditure to $40-42 billion, with about 70% of that allocated to advanced processes.

However, challenges lurk beneath the optimistic outlook. ASML's warning that demand from Chinese customers could drop significantly in 2026 points to geopolitical challenges within the global semiconductor supply chain. Additionally, the high costs of building overseas fabs will continue to affect some gross margins.

In conclusion, TSMC remains the global semiconductor leader, thanks to its excellent financial performance and forward-looking technology investments. Although it may face future geopolitical and overseas cost challenges, its strong growth momentum and continuous technological innovation ensure its future remains full of potential. Furthermore, the company's better-than-expected financial results indirectly provide a boost to the AI market.