TSMC announced strong quarterly results, with both revenue and profit significantly exceeding market expectations, confirming the ongoing high demand for artificial intelligence chips globally.
The company announced on Wednesday that its net profit after tax for the third quarter of 2026 was approximately NT$763.1 billion, higher than the average estimate of NT$739.5 billion by analysts, representing a year-on-year increase of 68.7%. Earnings per share were NT$29.43, which is equivalent to $4.60 per unit of American depository receipts.
In terms of revenue, TSMC's consolidated revenue in the third quarter was approximately NT$1.49 trillion, a year-on-year increase of 50.9% and a month-on-month increase of 17.6%; when calculated in US dollars, the quarterly revenue reached $46.72 billion, a year-on-year increase of 41.2%. The contribution from advanced manufacturing processes continued to expand, with the 2-nanometer process seeing its first significant production this quarter, further strengthening TSMC's leading position in high-end manufacturing.
TSMC's US stock price tumbled more than 2.7% during the night session, and is now down by over 2.4%.
Performance exceeded expectations across the board, with profitability remaining at a high level.
TSMC reported a third-quarter earnings of NT$29.43 per share, which is equivalent to $4.60 per unit of US depositary receipts. The operating profit was NT$876.45 billion, exceeding the estimated NT$854.35 billion; the operating margin was 58.7%, higher than the market's expectation of 58.1%.
The gross margin was 66.4%, which is basically in line with the estimated 66.5%; the after-tax net profit margin reached 51.1%. The overall profit margin level remains within the historical high range, indicating that TSMC not only continues to expand its production capacity but also possesses a strong ability to convert this capacity into profits.
Compared to the previous quarter, net profit for the current quarter increased by 8.0% on a quarter-on-quarter basis, and revenue increased by 16.2% (in US dollars), with the momentum of growth continuing.
The revenue proportion of advanced manufacturing processes continues to increase, and the contribution of 2-nanometer technology is beginning to be evident.
Process structure data shows that TSMC's high-end manufacturing business has further expanded its share. In the third quarter, revenue from advanced processes (7 nanometers and more advanced) accounted for 79% of the total wafer sales amount.
Specifically, the 3-nanometer process has the highest proportion, accounting for 33%; the 5-nanometer process accounts for 28%; and the 7-nanometer process accounts for 10%. It is worth noting that the 2-nanometer process began to be shipped this quarter, contributing 8% of the wafer sales amount, marking TSMC's mass production capability extending towards the most advanced node.
The continuous upgrading of manufacturing processes is one of the core drivers behind TSMC's rapid growth in revenue and profits, and it also reflects the strong demand for high-value orders from customers in the field of artificial intelligence acceleration chips.
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