TSMC Revenue Jumps to $46.72 Billion as Profit Grows 68.7% in Third Quarter
Key Facts
Taiwan Semiconductor Manufacturing Co. (TSMC) reported record results on October 15 for the quarter ended September 30, with revenue of $46.72 billion, up 41.2% year over year and 16.2% from the previous quarter. Consolidated revenue was NT$1,494.24 billion, net income was NT$763.06 billion, and diluted earnings per share were NT$29.43. Net income and earnings per share rose 68.7% from the same quarter a year earlier, while net income increased 8.0% quarter over quarter. Net profit topped the LSEG SmartEstimate of NT$746.3 billion, according to Reuters. The results reflect the company’s continued growth as demand for advanced chipmaking technologies rises.
Profit growth outpaced growth in domestic revenue, which rose 50.9% year over year to NT$1,494.24 billion, compared with NT$989.918 billion in the third quarter of the previous year. Quarter over quarter, revenue increased 17.6% from NT$1,270.381 billion in the second quarter, while net income rose from NT$706.562 billion to NT$763.064 billion, an increase of 8.0%. Earnings per share climbed to NT$29.43 from NT$27.25 in the previous quarter, after reaching NT$17.44 a year earlier. Gross margin was 66.4%, operating margin was 58.7%, and net profit margin was 51.1%. These margins show profits expanding alongside higher sales volumes, although comparisons across periods show differing rates of growth in revenue and profit.
The advanced manufacturing mix helped shape quarterly revenue: 2-nanometer technology accounted for 8% of total wafer revenue, 3-nanometer for 33%, 5-nanometer for 28%, and 7-nanometer for 10%. Advanced technologies, defined as 7-nanometer and below, accounted for 79% of total wafer revenue. The chief financial officer said third-quarter performance was "supported by strong demand for advanced process technologies." The company expects strong demand to continue and 2-nanometer production to accelerate in the fourth quarter. This comes as the chief executive said customer demand, driven by strong demand for artificial intelligence, "is still far above our current supply capabilities," adding that the company is working to narrow the gap.
TSMC forecast fourth-quarter revenue of between $52.3 billion and $54.3 billion, a gross margin of between 65% and 67%, and an operating margin of between 56.5% and 58.5%. The margin estimates are based on an assumed exchange rate of NT$31.8 to the U.S. dollar. On production capacity, the company maintained its focus on expanding investment, having earlier raised its 2026 capital spending budget to $60–64 billion from a previous estimate of $52–56 billion. The chief financial officer said spending between 2026 and 2028 would be significantly higher than total spending over the previous three years. The company also said it had sent teams to Texas to assess potential investment options, while the plan remains under discussion.
By contrast, the company said consumer and price-sensitive end markets face challenges from rising component prices and economic uncertainty. The chief executive said TSMC "is cautious in planning its business as it heads into 2027," pointing to continued restraint in managing the business alongside strong demand for advanced chips. Monthly revenue in September was NT$511,857 million, up 54.6% from the same month a year earlier. The company’s calendar lists November 10, 2026, as the scheduled date for announcing October sales, and December 10 for announcing November sales, with dates subject to change during the year. In U.S. trading, the stock closed at $424.37 on October 26, compared with $418.51 on October 23.