Taiwan Semiconductor Manufacturing Co. posted its fifth straight quarter of record earnings as net profit jumped 77% to NT$706.56 billion (US$21.98 billion), far exceeding analysts' expectation of NT$624 billion. Revenue climbed 36% to NT$1.270 trillion, in line with guidance.

The world's largest contract chip maker, a major supplier for Apple and Nvidia, saw gross margin rise to 67.7% as high utilization rates offset rising depreciation from its 2-nanometer production ramp-up. The robust results signal AI demand remains healthy.

The performance echoed ASML's raised annual sales outlook of US$49.3-51.6 billion, citing "extremely strong" AI-driven tool orders. TSMC shares surged 37% in the second quarter, taking year-to-date gains to nearly 60%.

Citi Research raised TSMC's target price to NT$3,800 from NT$2,875, citing sustained demand for leading-edge chips and improving long-term visibility.