TSMC Posts 68.7% Profit Growth as Shares Close Down 5.95%
Key Facts
TSMC shares closed at $406.13 on October 30, down 5.95% in the session, despite the company’s earlier report of 68.7% year-on-year net income growth in the third quarter. The stock’s daily trading range was $400.12 to $418.09, according to Yahoo Finance data. The company reported on October 15 consolidated revenue of 1,494.24 billion Taiwanese dollars and net income of 763.06 billion Taiwanese dollars for the quarter ended September 30. It also posted diluted earnings per share of 29.43 Taiwanese dollars, or $4.60 per American depositary receipt. The strong results were met with a pressured trading session for the stock, as the U.S. technology sector also fell that day amid investor concerns over the scale of AI companies’ spending.
Third-quarter revenue rose 50.9% from the same period a year earlier, while net income and diluted earnings per share each increased 68.7%, according to the earnings statement. Quarter on quarter, revenue grew 17.6% from the second quarter, and net income rose 8.0%. In U.S. dollars, revenue was $46.72 billion, up 41.2% year on year and 16.2% from the previous quarter. The differences between growth rates reported in Taiwanese currency and U.S. dollars reflect the different measurement bases, while the year-on-year comparison points to strong expansion in sales and earnings. The figures provided a solid financial backdrop before investors turned to assess demand and spending expectations in the chip sector.
TSMC set a fourth-quarter revenue range of $52.3 billion to $54.3 billion, compared with actual third-quarter revenue of $46.72 billion. It also forecast a gross margin of 65.0% to 67.0% and an operating margin of 56.5% to 58.5%. The quarterly guidance follows third-quarter gross and operating margins of 66.4% and 58.7%, respectively. The comparison indicates that the revenue outlook is above the previous quarter’s level, while the margin ranges set expectations for upcoming operating performance. At the earnings conference, the company also said it expects 2026 revenue to grow about 44% year on year in U.S. dollars.
The company said demand for AI continues to exceed its current supply capacity. The Associated Press quoted Chief Executive C.C. Wei as saying, "Demand, in fact, is still far above our ability to supply today." The remark provides context for the company’s revenue outlook and business growth, highlighting production capacity constraints in the face of demand. In the third quarter, advanced technologies, which TSMC defines as 7 nanometers and below, accounted for 79% of wafer revenue. The 2-nanometer technology alone accounted for 8% of wafer revenue during the period, according to the earnings conference transcript.
To meet demand, TSMC kept its 2026 capital expenditure budget at $60 billion to $64 billion. Management said its capital investments from 2026 to 2028 would exceed, by a wider margin, what it spent in the previous three years. The plans accompany the company’s expectation of continued strong demand for its advanced technologies and annual revenue growth of about 44% in 2026. But a wave of selling in the U.S. market put company results and spending plans under investor scrutiny; Reuters attributed the decline in U.S. stocks on October 30 to weaker-than-expected results from Intel and Amazon. The Nasdaq was down 7.8% from its record closing high, reached on October 6, Reuters reported.
The company’s financial calendar listed November 10, 2026, as the date for its October sales announcement. The next monthly release follows the third-quarter results and fourth-quarter guidance, as markets track the company’s monthly sales during a period of strong demand for advanced technologies. TSMC listed the date on its official financial calendar. The October data will allow investors to track revenue after the third quarter ended on September 30. The company is scheduled to release the data on the date specified in the calendar.