TSMC Chairman and CEO C.C. Wei Expresses "Envy and Jealousy" Over 86% Profit Margin of Memory Manufacturers
TSMC reported better-than-expected quarterly results and raised its full-year revenue and capital expenditure outlook; Q2 net profit reached NT$706.6 billion, exceeding market expectations of NT$623.73 billion, with a gross margin of 67.7%.
Chairman and CEO C.C. Wei stated that he feels "envy and jealousy" seeing the 86% profit margin of memory manufacturers, but emphasized that as a partner, TSMC will not significantly raise prices to squeeze customers. He noted that AI is a new industry, and strong demand will continue until 2030.
In terms of market mechanisms, the performance guidance boosts supply chain confidence, event-driven capital flows into semiconductor equipment and materials, competitors in foundry face pressure, while AI-related customers benefit from capacity assurance.
Source: Public Information
ABAB AI Insight
TSMC has previously raised AI-related capital expenditures multiple times; this Q2 outperformance and full-year guidance increase continue to reflect its profitability as a leader in advanced processes. C.C. Wei's comments reflect the reality of the divergence in profit margins between foundry and memory manufacturers.
In terms of capital strategy, the company maintains a customer success-first approach, continuously investing resources in CoWoS and advanced node expansions, motivated by securing AI demand share through long-term partnerships while avoiding short-term price increases that could disrupt ecosystem balance.
Similar to Intel or Samsung's profit margin performance during cycles, the semiconductor industry is currently in a phase of stratification between foundry and memory driven by AI, with demand highlighting structural growth until 2030.
Essentially, this is about capital concentration; AI demand is reshaping profit distribution in the industry chain, with the mechanism being TSMC's leading process position locking in high-margin orders, concentrating capital towards advanced foundry platforms, while high margins for memory manufacturers contrast with the long-term stability advantages of foundries.
ABAB News · Law of Cognition
Envying the 86% profit margin of memory, while adhering to the foundry partner position.
AI demand until 2030, guidance raised, structural growth exceeding cycles.
Customer success first, long-termism prevails over short-term squeezing.