TSMC revenue jumps 41.2% to $46.72 billion in third quarter
Key Facts
TSMC reported revenue of $46.72 billion in the third quarter of 2026, up 41.2% year on year and 16.2% from the previous quarter, according to the company’s results. Net income was 763.06 billion Taiwan dollars, up 68.7% year on year and 8.0% from the second quarter. The chief financial officer said the company’s third-quarter business was “supported by strong demand for advanced manufacturing technologies.” Net income also exceeded LSEG’s estimate of 746.3 billion Taiwan dollars, according to Reuters coverage published by Investing.com. The results highlight broad growth in revenue and earnings alongside strong demand for the latest manufacturing technologies.
In Taiwan dollars, consolidated revenue reached 1,494.24 billion, up 50.9% year on year and 17.6% quarter on quarter. Gross margin was 66.4%, while operating margin was 58.7% and net profit margin was 51.1%. These margins show the profitability the company generated during the quarter as revenue expanded. Revenue from the high-performance computing platform rose 22% from the previous quarter, accounting for 68% of total revenue, according to highlights from the earnings call. This breakdown puts high-performance computing at the forefront of the company’s business platforms, without implying that a separate category of artificial intelligence chips accounts for the entire mix.
By wafer fabrication technology, advanced technologies—7 nanometers and below—accounted for 79% of wafer revenue in the third quarter. 3-nanometer technology represented 33% of that revenue, compared with 8% for 2-nanometer technology. These figures distinguish the technology mix used in manufacturing from the business platforms by which revenue is measured. The company said strong demand for advanced manufacturing technologies supported the quarter’s results, while Chief Executive C.C. Wei pointed to continued strong demand expected in the fourth quarter. He added that this support includes “the rapid expansion of 2-nanometer technology,” which has entered a phase of accelerating production ramp-up.
TSMC expects fourth-quarter 2026 revenue of between $52.3 billion and $54.3 billion. The company estimated a gross margin of 65% to 67% for the period and an operating margin of 56.5% to 58.5%. On Oct. 15, the company raised its forecast for 2026 sales growth in dollar terms to 44%, from a previous forecast of slightly more than 40%, according to Taiwan’s Central News Agency. It also kept its 2026 capital expenditure budget at between $60 billion and $64 billion. The chief financial officer said spending during 2026–2028 would be clearly higher than in the previous three years, pointing to extended investment plans to support production capacity.
In trading, TSMC’s Taiwan-listed shares closed down 2% on Oct. 15, the day the results were announced, according to Reuters coverage via Investing.com. But closing data for the U.S.-listed shares under the ticker TSM do not support describing the move as a sustained decline after the results: the shares closed at $425.08 on Oct. 20 and $431.89 on Oct. 21, then at $412.35 on Oct. 22 and $418.51 on Oct. 23. On Oct. 26, they closed at $424.37. On Oct. 27, the shares rose 0.63% in Taiwan to 2,400 Taiwan dollars, and Taiwan’s Central News Agency said they recovered from earlier weakness and helped the broader market end the session in positive territory. An analyst at Cathay Futures said investors were watching results from major U.S. cloud computing companies for a clearer picture of artificial intelligence spending.
On the earnings call, Wei said higher component prices and economic uncertainty were putting pressure on consumer and price-sensitive chip segments. He added that the company was taking a cautious approach to planning its business for 2027. This coincides with expectations of continued strong demand for advanced manufacturing technologies in the fourth quarter, including the rapid expansion of 2-nanometer technology. The revenue and margin forecasts for the coming quarter provide a numerical framework for the company’s near-term performance. Planning for 2027 remains subject to the caution noted by the chief executive.