TSMC lifts quarterly profit 69% to NT$763bn, guides fourth-quarter sales to US$54bn
Taiwan Semiconductor Manufacturing Company reported third-quarter 2026 revenue of NT$1,494bn, or US$46.72bn, and net income of NT$763.06bn on 15 October, according to the results it filed with the US Securities and Exchange Commission. Revenue rose 50.9 per cent year on year in New Taiwan dollar terms and 41.2 per cent in US dollars, while net income and earnings per share increased 68.7 per cent. Diluted earnings came to NT$29.43 per share, or US$4.60 per American depositary receipt.
Margins held near their highs despite rising production costs. Gross margin was 66.4 per cent, operating margin 58.7 per cent and net margin 51.1 per cent, the company said. On a sequential basis, revenue grew 17.6 per cent in local currency and net income 8.0 per cent, indicating that the quarter's top-line expansion outpaced profit growth as costs rose.
The company had already signalled a strong quarter. TrendForce reported on 8 October that monthly sales figures put third-quarter revenue at a record NT$1.49tn, above both the LSEG SmartEstimate of NT$1.46tn and TSMC's own July guidance of US$44.6bn to US$45.8bn. September revenue alone was NT$511.86bn, the second consecutive month above NT$500bn, according to the same report. Nine-month revenue reached about NT$3.9tn, up 41.1 per cent.
Leading-edge nodes accounted for the bulk of wafer revenue. The newest 2-nanometre process contributed 8 per cent of wafer sales, 3-nanometre 33 per cent and 5-nanometre 28 per cent, with 7-nanometre at 10 per cent. Advanced technologies, defined as 7-nanometre and below, made up 79 per cent of the total. Chief financial officer Wendell Huang attributed the quarter to strong demand for the company's leading-edge process technologies.
Guidance for the final quarter points to further growth. TSMC expects revenue of US$52.3bn to US$54.3bn, a gross margin of 65 to 67 per cent and an operating margin of 56.5 to 58.5 per cent, assuming an exchange rate of NT$31.8 to the US dollar. At the midpoint that would be an increase of roughly 14 per cent on the quarter just reported. TrendForce said analysts were linking fourth-quarter demand to Nvidia's Vera Rubin platform and the 2-nanometre ramp.
The results arrived a day after ASML, TSMC's principal lithography supplier, reported record third-quarter net sales of €11.7bn and said its planned supply for 2027 and 2028 would not fully meet customer demand, according to its own filing. Taken together, the two reports suggest that capacity for the most advanced chips, rather than orders, is the binding constraint on the AI hardware supply chain into next year.
Not every indicator was positive for the sector. Stocktwits noted that the SOXX semiconductor index fell 5.1 per cent in the week before the results, with Arm and Intel among the Nasdaq-100's largest decliners, and that a Nvidia-backed Australian data-centre operator, Firmus, had shelved a planned listing citing market volatility. Investors were watching whether TSMC's rising capital spending could be offset by demand from customers such as Nvidia.
The company's fourth-quarter results and 2027 capital-expenditure plan are due in January. Before then, monthly revenue releases for October and November, and Nvidia's own quarterly report, will indicate whether the US$52.3bn–54.3bn range is being met. Capital expenditure for 2026 was not disclosed in the 15 October release and remains a point to confirm from the earnings call transcript.
