Taiwan Semiconductor Manufacturing Company Ltd.
TSM · NYSE
Next quarter
Expected to report Jan 14, 2027 — estimated from last year’s reporting date.
Consensus is $5.22 EPS for Dec 2026 across 6 estimates, ranging $5.12 to $5.52.
TSM Sep 2026
- 3.37%
- $4.45
- $4.60
- —
- —
Highlights
- Revenue: Third-quarter sales rose 50.9% year over year to NT$1,494.24 billion, or US$46.72 billion, and increased 17.6% sequentially in NT dollars.
- EPS: Diluted EPS was US$4.60 per ADR, 3.37% above the US$4.45 consensus; net income rose 68.7% year over year and 8.0% from the prior quarter.
- Margins: Gross margin was 66.4%, operating margin 58.7% and net profit margin 51.1%.
- Leading-edge mix: 7-nanometer and more advanced technologies contributed 79% of wafer revenue, including 8% from 2-nanometer.
- Fourth-quarter outlook: TSMC forecast revenue of US$52.3 billion to US$54.3 billion, with gross margin of 65%–67% and operating margin of 56.5%–58.5%.
- Operating growth: Operating income increased 75.0% year over year to NT$876.45 billion, outpacing revenue growth in NT dollars.
Analysis
TSMC delivered a strong third quarter, with US$4.60 of diluted EPS per ADR beating the US$4.45 consensus by 3.37%. Revenue reached NT$1,494.24 billion (US$46.72 billion), up 50.9% year over year in NT dollars and 41.2% in US dollars. Net income was NT$763.06 billion, up 68.7% year over year. Sequentially, revenue rose 17.6% and net income 8.0%, to NT$1,270.38 billion and NT$706.56 billion respectively in the second quarter comparison. The gap between sales and earnings growth sequentially is a notable feature of the quarter; TSMC reported third-quarter gross, operating and net margins of 66.4%, 58.7% and 51.1%.
The mix and outlook underscore the role of leading-edge production: 7-nanometer and more advanced processes generated 79% of wafer revenue, with 2-nanometer already accounting for 8%. Management cited strong demand for leading-edge technologies and expects a steep 2-nanometer ramp. For the fourth quarter, TSMC guided to US$52.3 billion–US$54.3 billion in revenue, implying further sequential growth from the third-quarter US-dollar base. Its margin ranges—65%–67% gross and 56.5%–58.5% operating—are below the third-quarter reported levels at their midpoints.
Revenue and earnings
Third-quarter revenue was NT$1,494.24 billion, up 50.9% year over year and 17.6% sequentially. In US dollars, sales were US$46.72 billion, up 41.2% year over year and 16.2% quarter over quarter. Net income increased 68.7% year over year to NT$763.06 billion, while EPS of US$4.60 per ADR exceeded the US$4.45 analyst consensus by 3.37%. Compared with the second quarter, net income rose 8.0% to NT$706.56 billion and EPS increased from NT$27.25 to NT$29.43.
Leading-edge mix
- Advanced processes: 7-nanometer and more advanced technologies represented 79% of total wafer revenue.
- Node contributions: 2-nanometer accounted for 8% of wafer revenue, 3-nanometer 33%, 5-nanometer 28% and 7-nanometer 10%.
- Demand: Management said third-quarter business was supported by strong demand for leading-edge technologies and expects that support to continue, including through a steep 2-nanometer ramp.
Fourth-quarter outlook
TSMC expects fourth-quarter revenue of US$52.3 billion to US$54.3 billion, compared with US$46.72 billion in the third quarter. The range implies roughly 12%–16% sequential growth from that US-dollar base. At an assumed exchange rate of NT$31.8 per US dollar, management forecast gross margin of 65%–67% and operating margin of 56.5%–58.5%, versus third-quarter margins of 66.4% and 58.7%.
Profitability
Gross profit increased 68.6% year over year to NT$992.38 billion, while operating income rose 75.0% to NT$876.45 billion. Third-quarter gross margin was 66.4%, operating margin 58.7% and net profit margin 51.1%. Sequentially, gross profit grew 15.4% and operating income 14.3%, both more slowly than revenue growth of 17.6%; net income rose 8.0%. The quarter therefore combined rapid sales growth with slower sequential growth in earnings and operating profit.
