Taiwanese chip giant TSMC holds a ceremony in Tainan
TSMC reported revenue of 467.58 billion New Taiwan dollars, or roughly $14.5 billion, for July, an increase of 44.7% from the same month a year earlier. Reuters

Taiwan Semiconductor Manufacturing Co. reported a nearly 45% surge in July sales as demand for artificial intelligence chips continued to fuel growth at the world's largest contract chipmaker.

TSMC reported revenue of 467.58 billion New Taiwan dollars, or roughly $14.5 billion, for July, an increase of 44.7% from the same month a year earlier.

The numbers offer another closely watched snapshot of the AI spending boom as some of the world's biggest technology companies continue pouring unprecedented amounts of money into data centers, processors and other infrastructure needed to develop and run increasingly powerful AI systems.

TSMC's position at the heart of the semiconductor supply chain makes its performance a particularly important gauge of AI demand.

Read more

The Taiwanese company manufactures advanced chips designed by customers including Nvidia and Google, putting it in a prime position to benefit as technology companies compete for the computing power needed for AI.

"TSMC is now guiding for 40% growth in revenues for this year, so July's numbers put it ahead of that figure," Ben Barringer, head of technology research at Quilter Cheviot, told CNBC.

Barringer cautioned against reading too much into a single month's figures because semiconductor demand can shift quickly, but said the latest numbers show demand remains strong for now.

TSMC's second-quarter results last month provided further evidence of that momentum.

The company generated $40.2 billion in second-quarter revenue, up 33.7% from a year earlier, while net income climbed 77.4%, according to TSMC's earnings release. Advanced technologies accounted for 77% of total wafer revenue during the quarter.

High-performance computing, the segment that includes TSMC's AI chip business, accounted for 66% of revenue during the period.

"AI-related demand continues to be extremely robust," TSMC Chairman and CEO C.C. Wei said during the company's earnings update.

TSMC now expects its 2026 revenue to increase by slightly more than 40% in U.S. dollar terms and has raised its planned capital expenditure for the year to between $60 billion and $64 billion.

For the third quarter, the company expects revenue of between $44.6 billion and $45.8 billion, according to its latest guidance.

The strong July numbers come as investors increasingly scrutinize whether the hundreds of billions being spent across the AI industry will ultimately produce returns large enough to justify the investment.

Those concerns have recently weighed on semiconductor stocks. The PHLX Semiconductor Index has fallen about 15% from its June high, although it remains sharply higher for the year.

European semiconductor stocks also gained Monday following the report, with ASML rising more than 2% while Infineon and STMicroelectronics traded higher.