TSM ADRs −4.3% after a Q2 that was, on the numbers, close to flawless: record gross margin ~67.7%, Q2 operating margin 60.3%, and Q3 revenue guided to $44.6–45.8B vs. the Street $42.6B. FY26 revenue growth was raised to "slightly above 40%" (from ">30%"). Three things did the damage. Operating margin: Q3 guided to 56–58%, below the 57.7% consensus and well off Q2's 60.3%, with management flagging 2–3ppt of gross-margin dilution from overseas fabs early on, widening to 3–4ppt as the expansion scales. Mix: AI demand is "stronger and stronger" and expected to hold through 2029–2030 (with a temporary dip possible), but consumer and price-sensitive end markets are pressured by rising component costs. And capex: FY26 lifted to $60–64B (from a $52–56B high end, vs. $40.9B last year), an additional $100B US investment taking the total to ~$265B, and a warning that the next three years' capex will be "even more significantly higher" than the last three. Historically, accelerating capacity is a reason to fade cyclicals, not chase them — and the market can't decide whether semis are still cyclical. ASML's blowout raise Wednesday posed the identical question and also sold. Overnight: KOSPI −6.4% with sidecars tripped, Samsung and SK Hynix both down hard, Nikkei −2.6%.