- TSMC (NYSE:TSM) reported a record US$23.55 billion Q3 profit, up 69% from a year ago, fueled by strong AI chip demand
- Revenue rose 16.2% sequentially to US$46.7 billion, exceeding company guidance as 2-nanometer production ramped up and advanced chips drove growth
- TSMC raised its 2026 revenue growth forecast to about 44% and maintained plans for major investments in new fabs, advanced packaging, and expanded AI-chip capacity
- TSMC stock (NYSE:TSM) last traded at $424.00
Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) reported record third-quarter net profit of NT$707.6 billion (US$23.55 billion), a 69% increase from a year earlier, as demand for advanced semiconductor technologies continued to accelerate.
The world’s largest contract chipmaker and a key supplier of artificial intelligence processors, said third-quarter revenue exceeded the high end of its guidance, driven by robust demand for leading-edge manufacturing processes and a rapid increase in production of its next-generation 2-nanometer technology.
Revenue reached US$46.7 billion during the quarter, representing a 16.2% sequential increase in U.S. dollar terms and a 17.6% increase in New Taiwan dollar terms. Advanced technologies remained the primary growth driver, with process nodes of 7-nanometer and below accounting for 79% of total wafer revenue. High-performance computing applications, including AI-related chips, contributed 68% of total sales.
Chief Financial Officer Wendell Huang said gross margin declined 1.3 percentage points sequentially to 66.4%, largely due to the initial costs associated with ramping up 2-nanometer production capacity. Despite that pressure, the company posted an operating margin of 58.7%, while operating expenses represented 7.8% of net revenue. Earnings per share came in at NT$29.43, and return on equity reached 45.5%.
Looking ahead, TSMC forecast fourth-quarter revenue between US$52.3 billion and US$54.3 billion, reflecting continued strength in AI, high-performance computing, and advanced semiconductor demand. The company also raised its full-year outlook, now expecting approximately 44% revenue growth for 2026, an increase from previous expectations.
Management acknowledged that profit margins are likely to remain under pressure in the near term due to the aggressive 2-nanometer production ramp and higher costs associated with overseas manufacturing expansion. However, executives said productivity improvements and scale efficiencies should help offset some of those headwinds over time.
The company reiterated its US$60 billion to US$64 billion capital expenditure budget for 2026 and signaled significantly higher investment levels through 2028. Expansion plans include additional fabrication facilities in Taiwan and Arizona, greater 2-nanometer production capacity, and ongoing investment in advanced chip packaging technologies.
TSMC said demand tied to artificial intelligence applications remains exceptionally strong and continues to outpace supply in several advanced technology segments. The company expects AI-related growth, together with ongoing investments in leading-edge manufacturing, to remain central to its long-term expansion strategy.
Shares of TSMC have been closely watched by investors as the company plays a critical role in the global AI supply chain, producing advanced chips for many of the world’s largest technology companies. The latest results underscore the extent to which AI-driven demand is reshaping the semiconductor industry and supporting record financial performance across the sector.
Taiwan Semiconductor Manufacturing Co. manufactures, packages, tests, and sells integrated circuits and other semiconductor devices internationally.
TSMC stock (NYSE:TSM) closed trading 1.40% lower at $424.00 and has risen 38.95% since the year began.
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