# TSMC raises capex and revenue forecast, highlighting growing AI chip demand > Source: > Published: 2026-07-16 11:31:01+00:00 **What happened: **Taiwan Semiconductor Manufacturing ([TSM](https://finance.yahoo.com/quote/TSM)) stock moved 4% lower in premarket trading on Thursday. **What's behind the move: **The world's largest semiconductor manufacturer posted record second quarter revenue of $40.2 billiion and raised its capital spending and revenue outlook for the year, underscoring growing demand for AI chips and data centers. TSMC, which is the primary chip supplier for Nvidia ([NVDA](https://finance.yahoo.com/quote/NVDA/)), now expects capital expenditures of $60 billion to $64 billion in 2026, at least $4 billion above its previous forecast. **What else you need to know: **While the company said in the third quarter it sees strong demand, management warned of rising prices. As part of its capital expenditures, TSMC announced an additional $100 billion investment in Arizona. The company also raised its revenue growth projection to slightly more than 40%, well above the 30%-plus increase it had previously anticipated. "Our conviction in the multi-year AI megatrend remains very high supported," TSMC Chairman C.C. Wei said during Thursday's earnings call. Despite the stronger outlook, TSMC's US-listed shares fell as investors took profits off the table. The stock is up almost 40% year to date. "Looking ahead, we observe consumer and price sensitive end market segment are being challenged due to the impact of rising component prices and macroeconomic uncertainties," Wei said. Investors were closely watching TSMC's outlook and capex as another litmus test of the AI trade. The results come after Dutch chipmaker [ASML raised its outlook,](https://finance.yahoo.com/markets/article/asml-raises-outlook-on-strong-orders-for-advanced-chipmaking-equipment-120303217.html) as leading semiconductor makers continue to spend on the advanced equipment needed to manufacture cutting-edge processors and memory chips. *Ines Ferre is a Senior Business Reporter for Yahoo Finance covering the US stock market, publicly traded companies, and commodities.* **Click here for in-depth analysis of the latest stock market news and events moving stock prices**