What Did TSMC's Record Q3 Results and Q4 Guidance Say About…

This article summarizes TSMC's October 15, 2026 earnings release and related press coverage for informational purposes. It is not investment advice. Figures come from company filings and news reports and may be revised.

Key Takeaways

TSMC reported a sixth straight record quarter: third-quarter net profit rose 68.7% from a year earlier to NT$763.06 billion (about US$23.6 billion), ahead of the NT$746.3 billion analysts had expected, with earnings per share of NT$29.43.
Revenue was US$46.72 billion, up 41.2% from a year earlier and 16.2% from the prior quarter, above the high end of the company's own guidance.
Fourth-quarter revenue guidance of US$52.3 billion to US$54.3 billion implies roughly 14% sequential growth and was well above the consensus of about US$48.8 billion.
CEO C.C. Wei now expects 2026 revenue to grow around 44% in US dollar terms, and capital spending stays at US$60 billion to US$64 billion for the year.
Margins were solid but not higher: gross margin was 66.4%, within guidance, and operating margin was 58.7%, above the forecast range but below the second quarter's 60.3%.

The numbers behind the headline

TSMC released full results ahead of its call. Net income rose 8% from the second quarter and 68.7% from a year ago. Gross margin came in at 66.4%, in line with the 65%–67% guidance, while operating margin of 58.7% beat the 56%–58% range the company had guided, and net profit margin reached 51.1% compared with 45.7% a year earlier. In New Taiwan dollars, revenue was about NT$1.494 trillion, up 50.9% from last year.

The company generated about NT$920 billion in cash from operations during the quarter, spent NT$443 billion on capital expenditures, and paid out NT$156 billion in dividends.

The technology mix: 2-nanometer is already 8% of sales

One of the most closely watched details is how fast TSMC's newest process is ramping. Shipments of 2-nanometer chips made up 8% of wafer revenue in the quarter, following the start of high-volume manufacturing in the fourth quarter of 2025. Three-nanometer accounted for 33%, five-nanometer for 28%, and seven-nanometer for 10%, so advanced technologies together made up about 79% of wafer revenue. One analysis put high-performance computing, which covers AI chips, at 68% of revenue.

CFO Wendell Huang said that moving into the fourth quarter, TSMC expects continued strong demand for leading-edge technologies, including what he called the steep ramp-up of 2-nanometer.

Why the fourth-quarter guide mattered most

Record profit was widely expected, so investors focused on what came next. TSMC guided fourth-quarter revenue to US$52.3 billion to US$54.3 billion, about 14% higher than the third quarter and 58% higher than a year earlier at the midpoint. It expects gross margin of 65% to 67% and operating margin of 56.5% to 58.5%. Coverage noted the guidance came after a chip-stock selloff earlier in the week, and that it gives companies such as Nvidia and Broadcom, whose AI chips TSMC makes, one of the clearest demand signals before their own reports.

TSMC's capital spending range of US$60 billion to US$64 billion was left unchanged, with the company prioritizing advanced packaging and leading-edge wafer capacity.

The cautious notes

Not everything in the report was upbeat. Operating margin slipped from 60.3% in the second quarter, and the guided margin range for the fourth quarter is slightly lower again. Headlines on the call also pointed to a measured tone about 2027, and one analysis flagged AI financing risks as a factor to watch. Those items are summarized here from news coverage rather than the full transcript, so they are worth checking against TSMC's own call materials.

TSMC's US-listed shares had fallen 3.4% to $430 on Wednesday as chip stocks sold off on competition worries and a hot inflation report, so Thursday's results landed after a nervous stretch for the sector.

What this means if you follow AI chips

Read the guidance, not just the profit. A 14% sequential revenue forecast suggests demand from AI customers is still outrunning TSMC's capacity.
Watch margins. The fourth-quarter gross margin guide of 65% to 67% is the first place any cost pressure would show up.
Treat this as a signal for the whole supply chain. Chip designers, memory makers, and cloud companies all depend on TSMC's capacity, so its capex and ramp commentary reaches well beyond its own stock.
Remember the 2027 question. Management's cautious tone about next year is a reminder that guidance covers one quarter at a time.

Frequently Asked Questions

What were TSMC's third-quarter 2026 results? Net profit of NT$763.06 billion, up 68.7% year over year, on revenue of US$46.72 billion. Gross margin was 66.4% and operating margin 58.7%.

What is TSMC's fourth-quarter guidance? Revenue of US$52.3 billion to US$54.3 billion, gross margin of 65% to 67%, and operating margin of 56.5% to 58.5%.

How much of TSMC's revenue comes from 2-nanometer chips? About 8% of wafer revenue in the third quarter, with 3-nanometer at 33%, 5-nanometer at 28%, and 7-nanometer at 10%.

Did TSMC change its spending plans? No. It kept its 2026 capital expenditure target at US$60 billion to US$64 billion and expects 2026 revenue growth of around 44% in US dollars.

Sources & References

TSMC, "TSMC Reports Third Quarter EPS of NT$29.43" and Q3 2026 earnings presentation (Form 6-K)
The Motley Fool, "TSMC (TSM) Q3 2026 Earnings Call Transcript"
TIKR, "TSMC Posts a Sixth Straight Record Quarter, and Its Q4 Guide Says the AI Boom Isn't Slowing"
BigGo Finance, TSMC Q3 2026 results coverage
TradingKey, "TSMC Stock Forecast: Record Profit and 2nm Ramp Test $430 Support"
Reuters via Investing.com, "TSMC expected to report sixth straight quarter of record profit thanks to AI boom"

What Did TSMC's Record Q3 Results and Q4 Guidance Say About AI Demand?