EL7.AI
StocksMedium•27 October 2026•
4 min read

TSMC Posts Record $46.72 Billion in Revenue as Cadence Raises 2026 Growth Outlook to 21%

Key Facts

1TSMC revenue reached a record $46.72 billion in the third quarter, up 41.2% year over year and 16.2% quarter over quarter.
2Cadence reported third-quarter revenue of $1.633 billion, up 22% year over year from $1.339 billion a year earlier.
3Cadence raised its 2026 revenue growth forecast to 21%, with an annual revenue range of $6.387 billion to $6.417 billion.
4Cadence backlog reached $8.2 billion, of which $4.2 billion is expected to be recognized over the following twelve months.

TSMC said on October 15 that revenue reached a record $46.72 billion in the third quarter of 2026, up 41.2% year over year and 16.2% from the previous quarter. The company said net income reached 763.06 billion New Taiwan dollars, up 68.7% year over year, while diluted earnings per share were 29.43 New Taiwan dollars. It attributed the quarter’s performance to strong demand for advanced manufacturing technologies. The results show strong demand for advanced chipmaking capacity, but do not mean the company raised its annual growth forecast for 2026. Instead, TSMC provided fourth-quarter revenue guidance, while Cadence reported its results separately on October 26.

TSMC’s growth came with high profit margins: gross margin was 66.4%, operating margin 58.7% and net profit margin 51.1% in the third quarter. In New Taiwan dollars, revenue rose 50.9% year over year, while net income increased 8.0% from the second quarter. Revenue growth calculated in U.S. dollars differed from the rate in New Taiwan dollars, while income recorded a smaller quarterly increase than its annual growth. Advanced technologies, including 7-nanometer and below, accounted for 79% of chip revenue. 2-nanometer technology alone accounted for 8% of total chip revenue, showing the weight of newer technologies in the manufacturing mix.

TSMC expects revenue of between $52.3 billion and $54.3 billion in the fourth quarter of 2026, with a gross margin of between 65% and 67%. The chief financial officer said the company expects strong demand for advanced manufacturing technologies to continue, including a sharp acceleration in 2-nanometer production during the quarter. The guidance follows the quarterly revenue increase and puts the latest technology at the center of the company’s outlook for the coming period. But the company also faces differences across its markets: it said consumer segments and price-sensitive markets are contending with higher component prices and economic uncertainty. It added that it is taking a cautious approach to planning for 2027.

On demand, TSMC’s chief executive said demand for AI chips continues to exceed the company’s current supply capacity. That is putting pressure on production capacity as the company moves to increase 2-nanometer output, according to its fourth-quarter guidance. This picture helps explain the company’s bet on advanced manufacturing technologies, alongside its caution about consumer segments and more price-sensitive markets. An EL7 story published on October 27 reported that TSMC shares fell 2% after the results were announced. The move came despite record revenue and as the company pointed to continued strength in demand for advanced chips.

Cadence, which provides software and tools for designing chips and systems, reported on October 26 third-quarter revenue of $1.633 billion, compared with $1.339 billion in the same period of 2025. The company said revenue grew 22% year over year, while recurring revenue rose 18%. Non-GAAP diluted earnings per share were $2.11, compared with $1.93 a year earlier. Backlog reached a record $8.2 billion at the end of the quarter. Of that amount, the company expects to recognize $4.2 billion as revenue over the following twelve months, a separate indicator from revenue earned in the quarter.

Cadence’s growth extended across its business units: Core EDA revenue rose 20% year over year, intellectual property revenue increased 24%, and System Design and Analysis revenue grew 30%. The company said quarterly revenue growth was tied to momentum in AI-driven designs, and launched its Maestro platform, which includes specialized models for chip and system design. It said early workflow results showed up to 30% higher quality and five times greater token efficiency compared with general-purpose foundation models. It also said it had more than 100 active customer engagements in AI Super Agents. These indicators show the expansion of the company’s AI offerings, while realized revenue growth figures remain distributed across its different business segments.

Cadence raised its 2026 revenue growth forecast to 21% year over year, setting an annual revenue range of $6.387 billion to $6.417 billion and non-GAAP diluted earnings per share of $8.37 to $8.43. Its chief executive said business momentum, broadening technology leadership and record backlog supported the decision. The company expects fourth-quarter revenue of between $1.695 billion and $1.725 billion, and earnings per share of between $2.19 and $2.25. After the results were announced, its shares rose 2% in after-hours trading on Monday, October 26, according to Reuters via Investing.com. The company also repurchased $400 million of shares during the quarter, and its board authorized an additional $2.5 billion for the repurchase program.