Asian Tech Earnings Highlight Divergence Between AI Growth and Chinese Consumption

The busiest earnings week for Asian firms has revealed a split performance, with semiconductor manufacturers benefiting from strong artificial intelligence demand while Chinese consumer activity remains below expectations.

Taiwan Semiconductor Manufacturing Company reported July 2026 revenue of NT$467.58 billion, or approximately $14.5 billion, marking a 44.7% year-over-year increase. High-performance computing, which includes AI chip production, represented 66% of the company's second-quarter revenue.

In contrast, Chinese companies are presenting mixed results. JD.com reported second-quarter 2026 net revenues of RMB 346.4 billion, or about $51.1 billion, a 2.9% year-over-year decline that nonetheless surpassed analyst estimates. The company's non-GAAP net income rose 21% to RMB 8.9 billion.

Alibaba reported a 75% decline in net profit to approximately RMB 10.54 billion, or about $1.55 billion, for its fiscal first quarter of 2026. The company increased capital expenditures by 75% to roughly RMB 67.68 billion, or about $10 billion. While Alibaba's cloud and compute revenue related to AI grew by 45%, this growth did not offset the impact of increased infrastructure spending on net income.

Broader economic data from China suggests a challenging environment for consumption. Industrial output growth slowed to 4.5% year-over-year in July from 5.3% in June, and retail sales figures fell short of forecasts. These indicators contribute to ongoing uncertainty regarding whether the Chinese tech sector can overcome domestic headwinds through AI investment or if it must shift focus toward offshore markets.