TSMC Posts $46.72 Billion in Revenue, Forecasts Fourth-Quarter Revenue of Up to $54.3 Billion

Key Facts

Taiwan Semiconductor Manufacturing Co. (TSMC) reported revenue of $46.72 billion in the third quarter ended September 30, up 41.2% year over year and 16.2% from the previous quarter, according to its results statement issued on October 15. Revenue in Taiwan dollars totaled NT$1,494.24 billion, while net income reached NT$763.06 billion. The company said net income and diluted earnings per share rose 68.7% year over year, outpacing the 50.9% growth in revenue denominated in the local currency. The results underscore the widening gains as demand for advanced manufacturing technologies grows, while supply capacity limits how quickly the company can meet customer demand. TSMC had forecast third-quarter revenue of between $44.6 billion and $45.8 billion, according to an estimate cited by Reuters, putting the reported figure above its previous range.

Profitability improved alongside sales growth: gross margin was 66.4%, operating margin 58.7% and net profit margin 51.1% in the third quarter, according to the company’s statement. Earnings per share reached a record NT$29.43, compared with NT$17.44 in the third quarter of the previous year and NT$27.25 in the second quarter of 2026, according to Focus Taiwan. The share of revenue from 2-nanometer chips also rose to 8% of total sales, from 3% in the second quarter. The growing contribution from the new technology and elevated margins were features of the company’s business mix during the quarter. Chief Financial Officer Wendell Huang said the results were “supported by strong demand for advanced processing technologies,” adding that strong demand is expected to continue as 2-nanometer technology ramps up rapidly in the fourth quarter.

For the coming months, TSMC expects fourth-quarter revenue of between $52.3 billion and $54.3 billion, according to the official guidance in its results statement. The midpoint of the range would represent annual growth of 58% and a quarterly increase of 14%, according to Focus Taiwan. Chief Executive C.C. Wei raised his forecast for 2026 sales growth in U.S. dollar terms to 44% in October, from a July estimate of slightly above 40%, according to the same source. The revised outlook reflects continued strength in demand for advanced processors, with sales growth carrying over from the third quarter into higher guidance for the following period. A near-term date to watch is the release of October monthly sales on November 10, according to the company’s financial calendar.

Strong demand does not mean the company can fully meet it at present. Wei told The Associated Press that “demand is still much higher than our current supply capacity, and we are working hard to narrow the gap.” Focus Taiwan reported that customer demand for CoWoS packaging technology, widely used in AI applications, remained strong and that the company was working to provide enough capacity to meet demand. The company said it would continue investing to keep pace with customer demand, while the CFO expected capital expenditure to rise in line with that demand. The announced capital expenditure budget for 2026 is between $60 billion and $64 billion, compared with a previous estimate of between $52 billion and $56 billion, according to The Associated Press; the company announced this range before its third-quarter results.

At the same time, the company warned that consumer chips and price-sensitive sectors face challenges from rising component prices and macroeconomic uncertainty, according to The Associated Press. Wei said the “company is cautious in planning its business going into 2027,” linking that stance to conditions in those markets. These concerns temper the picture painted by the AI boom, as the company navigates uneven demand between its advanced technologies and some consumer markets. Before the results were announced, TSMC shares listed in Taipei closed down 1.35%, while the broader market fell 1%, according to Reuters via Investing.com. In trading on October 26, TSM shares in the U.S. market closed at $426.77, according to EL7 data.

Revenue for September alone totaled NT$511.86 billion, up 54.6% year over year, according to data cited by Reuters, making the final month of the quarter a notable contributor to the period’s result. For the quarter, Reuters estimated revenue at NT$1.49 trillion, compared with NT$989.92 billion in the same period a year earlier. The company’s next guidance covers fourth-quarter revenue, ahead of the release of October monthly sales on November 10. The company is also monitoring the supply gap described by its chief executive and continued customer demand for advanced processing and packaging technologies. Its planning for 2027 also takes into account challenges in price-sensitive markets and higher component costs.