TSMC Third-Quarter Profit Jumps 69 Percent to a Record NT$763.1 Billion

Updated 03:08 UTC, Oct 16, 2026

TSMC shares fell on Thursday, Oct. 15, even after the record results, as investors sold chip stocks across Asia and the United States. Taipei listed shares closed down 2 percent ahead of the earnings release, in line with a broader tech sell off tied to worries that the US Federal Reserve could raise interest rates again. US listed shares fell about 4 percent in Thursday trading. Shares of South Korean rivals Samsung Electronics and SK Hynix slid more than 10 percent the same day.

The company also gave the outlook investors had waited for. TSMC expects fourth quarter revenue of $52.3 billion to $54.3 billion, up as much as 61 percent from a year earlier. It raised its full year 2026 revenue growth forecast to about 44 percent in dollar terms, up from more than 40 percent last quarter, and kept its 2026 capital spending plan at $60 billion to $64 billion.

Why the stock fell after a record quarter

Three things weighed on the shares. First, the sell off was sector wide, driven by rate worries that hit AI stocks hardest because they are sensitive to higher borrowing costs. Second, margins are easing as new lines start up. Gross margin was 66.4 percent in the third quarter, down from 67.7 percent in the second quarter, and TSMC guided fourth quarter gross margin to 65 to 67 percent. Its finance chief said capacity building at home and overseas would put more pressure on margins, with overseas plants expected to dilute margins more in coming years. Third, management sounded careful about 2027. Chief Executive C.C. Wei said demand for leading edge chips remains extremely robust and the company sees no sign of a slowdown in the AI trend, but consumer and price sensitive markets are being challenged by rising component prices and macroeconomic uncertainty, so TSMC is being prudent in its planning for 2027.

Texas and Arizona

TSMC said its second Arizona plant has finished construction, with mass production set to start in the third quarter of 2027, ahead of schedule. Wei said the company has sent teams to Texas to evaluate expansion there, after major US customers asked for more local capacity. He said TSMC has held talks linked to the Terafab project, but any plant it uses would have to be operated by TSMC.

Taiwan Semiconductor Manufacturing Company said on Thursday that net profit for the third quarter rose 69 percent from a year earlier to NT$763.1 billion, about $23.6 billion. It was a record for the sixth straight quarter, and it beat the NT$746.3 billion forecast in an LSEG SmartEstimate, which gives extra weight to the analysts with the strongest track records.

Revenue for the July to September quarter rose about 50 percent from a year earlier to NT$1.49 trillion, about $46.7 billion. The figure beat the market forecast of NT$1.46 trillion and the company's own guidance, set in July, of $44.6 billion to $45.8 billion. TSMC had already published the revenue number on Oct. 8 from its monthly sales reports. September alone brought in NT$511.86 billion, up 54.6 percent from a year earlier.

AI orders did the heavy lifting

TSMC makes the most advanced processors for customers such as Nvidia and Apple, and the build-out of AI data centers drove the quarter again. Advanced technologies, chips made at 7 nanometers and below, brought in 79 percent of wafer revenue. Analysts said orders stayed strong for the company's CoWoS packaging, which bonds several chips into a single unit for AI systems.

Gross margin reached 66.4 percent, inside the 65 to 67 percent range the company had guided. It eased from 67.7 percent in the second quarter as TSMC ramped up its newest 2-nanometer production. New lines cost more to run until volumes build, and the company had warned that the ramp would trim margins in the second half of the year.

Bigger spending, bigger footprint

The company is adding capacity as fast as it can build it. In July, TSMC raised its 2026 capital spending plan to between $60 billion and $64 billion, up from a range of $52 billion to $56 billion, and raised its full year revenue growth outlook to slightly above 40 percent in dollar terms. The same month it added $100 billion to its Arizona factory plans, taking its total commitment in the United States to $265 billion. It has also been reported to be weighing a further investment in Texas.

TSMC had said it would update its outlook for the fourth quarter and the rest of the year together with Thursday's results. Several banks expected another raise to the full year forecast, given how far revenue has run ahead of guidance. TSMC is Asia's most valuable listed company, with a market value of about $2.1 trillion, and its shares have climbed nearly 60 percent this year.