Taiwan Semiconductor Manufacturing Company (TSM) investor relations material

Executive summary

• First quarter 2026 revenue reached NT$1,134.10 billion (US$35.90 billion), up 6.4% sequentially and 40.6% year-over-year, driven by strong demand for leading-edge process technologies.

• Net income attributable to shareholders was NT$572.48 billion, a 13.2% increase from Q4 2025 and 58.3% higher year-over-year.

• EPS for Q1 2026 was NT$22.08 (US$3.49 per ADR), up 13.2% sequentially and 58.3% year-over-year.

• Robust demand for AI and HPC applications continues to drive growth and capacity expansion.

• Full-year 2026 revenue is expected to grow above 30% year-over-year in USD terms.

Financial highlights

• Gross margin rose to 66.2%, up 3.9 percentage points sequentially and 7.4 points year-over-year; operating margin at 58.1%.

• Net profit margin reached 50.5%, up 2.2 points from Q4 2025 and 7.4 points year-over-year.

• Free cash flow for Q1 2026 was NT$348.21 billion.

• Cash and marketable securities stood at NT$3,383.60 billion (US$106 billion) at quarter end.

• Capital expenditures totaled NT$350.76 billion (US$11.10 billion USD) for the quarter.

Outlook and guidance

• Q2 2026 revenue expected between $39.0–$40.2 billion, a 10% sequential and 32% year-over-year increase at midpoint.

• Q2 gross margin guided at 65.5%–67.5%; operating margin at 56.5%–58.5%.

• Full-year tax rate expected between 17%–18%.

• Gross margin dilution of 2%–3% expected from 2 nm ramp-up and overseas expansion in 2026.

• Management provided forward-looking statements subject to risks and uncertainties.