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 8.4% 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, up 13.2% sequentially and 58.3% year-over-year.

• Advanced technologies (7nm and below) contributed 74% of wafer revenue, with 3nm at 25% and 5nm at 36%.

• HPC platform revenue surged 20% quarter-over-quarter, now 61% of total revenue.

Financial highlights

• Gross margin improved to 66.2%, up 3.9 percentage points sequentially and 7.4 points year-over-year.

• Operating margin reached 58.1%, up 4.1 points from Q4 2025 and 9.6 points year-over-year.

• Net profit margin was 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.

• Capital expenditures for Q1 2026 were US$11.10 billion (NT$350.76 billion).

Outlook and guidance

• Q2 2026 revenue expected at US$39.0–$40.2 billion, up 10% sequentially and 32% year-over-year at midpoint.

• Q2 gross margin guided at 65.5%–67.5%; operating margin at 56.5%–58.5%; tax rate around 20%.

• Full-year 2026 revenue growth expected above 30% in USD terms, driven by robust AI demand.

• Gross margin dilution of 2–3% expected from 2nm ramp and overseas expansion in early stages, widening to 3–4% in later stages.

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