Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE: TSM) said Thursday that August revenue jumped more than 53% from a year earlier, hitting a record monthly high as booming artificial intelligence demand continued to fuel growth.

AI Demand Drives Record August Revenue

Taiwan Semiconductor reported consolidated August revenue of about 514.81 billion New Taiwan dollars, up 53.3% year over year and 10.1% from July.

Revenue for January through August reached 3.387 trillion New Taiwan dollars, up 39.3% from a year earlier.

During its July earnings call, management described AI-related demand as "extremely robust," CNBC reported Thursday. The company also reported second-quarter profit growth of more than 77% and forecast third-quarter revenue of $44.6 billion to $45.8 billion.

Analysts expect current-quarter sales to rise 46.8%, according to Bloomberg.

Capacity Expansion Struggles To Catch Demand

Deputy Co-Chief Operating Officer Cliff Hou told Bloomberg that Taiwan Semiconductor is simultaneously building and equipping about 20 factories worldwide, compared with four or five projects historically.

"Right now you're almost 4x or 5x, trying to catch up, but still you cannot meet demand," Hou said.

The company expects 2026 capital spending of $60 billion to $64 billion and full-year U.S. dollar revenue growth slightly above 40%.

Analyst Sees Margin Resilience

Bloomberg Intelligence analyst Charles Shum said consensus estimates may underestimate the company's ability to protect margins in 2027.

Consensus estimates call for 35% revenue growth and 31% earnings growth next year. That implies a gross margin of 65.5%, down from 66.4% in 2026.

However, Shum said pricing could partly offset pressure from 2-nanometer production, overseas factories and higher depreciation.

Taiwan Semiconductor carries a Buy consensus rating. Analysts have an average price forecast of $547.38.

Stifel initiated coverage with a Buy rating and $515 price forecast on Sept. 2. Bernstein raised its price forecast to $554 while maintaining an Outperform rating on Aug. 11. Needham maintained Buy and raised its forecast to $530 on July 27.

Taiwan Semiconductor Top ETF Exposure

• VanEck Semiconductor ETF (NASDAQ: SMH): 9.28% Weight
• Brown Advisory Flexible Equity ETF (NASDAQ: BAFE): 5.96% Weight
• Harbor International Compounders ETF (NYSE: OSEA): 6.77% Weight

Significance: Because TSM carries such a heavy weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock.

Taiwan Semiconductor Action

Taiwan Semiconductor stock rose 0.19% to $428.85 in Friday premarket trading, according to market data.