Taiwan Semiconductor Manufacturing Company (TSM) Q3 2026 earnings summary

Executive summary

• 3Q26 revenue was NT$1,494.24B ($46.72B), up 16.2% QoQ; net income was NT$763.06B, up 68.7% YoY.

• Robust AI and leading-edge demand drove growth, while gross margin eased amid initial N2 ramp dilution.

Financial highlights

• U.S.-dollar revenue rose 41.2% YoY; NT-dollar revenue rose 50.9% YoY.

• Gross profit was NT$992.38B and operating income NT$876.45B, up 75.0% YoY; net profit margin was 51.1%.

• Operating expenses were NT$116.43B; non-operating items were NT$34.59B.

• EPS was NT$29.43, up 68.7% YoY; diluted ADR earnings were US$4.60.

• 9M26 revenue rose 41.1% YoY to NT$3,898.73B; operating income rose 67.9% and net income 68.8%.

Outlook and guidance

• Q4 revenue guidance is $52.3B–$54.3B, with gross margin of 65%–67% and operating margin of 56.5%–58.5%.

• Q4 gross margin midpoint of 66% implies a 40-bp QoQ decline, reflecting 2nm ramp and overseas-fab dilution, partly offset by productivity and capacity optimization.

• FY2026 U.S.-dollar revenue growth is expected at ~44% YoY; the 2026 capital budget remains $60B–$64B.

• CapEx for 2026–2028 is expected to be significantly higher than in the prior three years, with revenue growth expected to outpace CapEx growth.