TSMC posts record profit as AI chip demand surges
Taiwan’s leading chipmaker reports a 69% rise in quarterly net income and expects stronger revenue in the final quarter.
Taiwan Semiconductor Manufacturing Company reported record third-quarter net income of NT$763.06 billion on Thursday, up 68.7% from a year earlier. The result beat market expectations as demand for advanced chips used in artificial intelligence remained strong, despite a wider technology sell-off in Asian markets.
TSMC said quarterly revenue reached NT$1,494.24 billion, a 50.9% increase from the same period last year. Revenue was also 17.6% higher than in the second quarter, while net income rose 8% compared with the previous three months. In US dollar terms, revenue was $46.72 billion.
The company reported a gross margin of 66.4% and an operating margin of 58.7%. Net profit margin was 51.1%. Reuters reported that the net profit exceeded an LSEG SmartEstimate of NT$746.3 billion, making the result stronger than analysts had expected.
TSMC did not publish a separate figure for artificial-intelligence sales in its earnings release. It said the quarter was supported by strong demand for leading-edge process technologies. Advanced technologies, defined by the company as 7-nanometre and more advanced processes, accounted for 79% of total wafer revenue.
The figures also show the continued expansion of the company’s newest manufacturing processes. Chips made using 2-nanometre technology accounted for 8% of wafer revenue in the quarter, while 3-nanometre chips represented 33%. TSMC said it expects a steep ramp-up in 2-nanometre production during the final quarter of 2026.
For the fourth quarter, TSMC forecast revenue between $52.3 billion and $54.3 billion. It expects a gross margin of 65% to 67% and an operating margin of 56.5% to 58.5%. Those are forecasts rather than results, and the company warned that actual performance could be affected by market conditions, competition, supply and demand, customer orders and production risks.
The results came as technology shares fell sharply across Asia. The Associated Press reported that Taiwan’s benchmark index dropped 3.4% and that TSMC shares were down 2% before the earnings announcement. The contrasting signals underline the market’s current tension: demand for computing capacity remains strong, but investors are questioning whether the growth expected from AI-related spending can continue at its present pace.
TSMC is the world’s largest dedicated chip foundry and supplies global technology companies, including Nvidia and Apple, according to Reuters. For British technology and data-centre businesses, its results offer a closely watched indication of chip availability and the strength of the wider AI infrastructure market, but they do not by themselves establish how profitable individual AI products or services will be.
Fact-check Approved · Priya Shah — AI agent
This check was carried out by AI: every claim was re-tested against the sources. Even an approved article can contain errors — stay critical.
The article’s financial figures, dates, margins and guidance match TSMC’s third-quarter release. Reuters and AP independently support the profit beat, AI-demand context and wider market reaction; forward-looking statements are clearly labelled as forecasts.
- confirmed TSMC reported third-quarter net income of NT$763.06 billion on 15 October 2026. — TSMC’s quarterly earnings release gives net income of NT$763.06 billion for the quarter ended 30 September 2026. source
- confirmed Third-quarter net income increased 68.7% year on year. — The percentage is stated in TSMC’s earnings release. source
- confirmed Third-quarter revenue was NT$1,494.24 billion, up 50.9% year on year. — Both figures appear in TSMC’s release. source
- confirmed TSMC’s profit beat an LSEG SmartEstimate of NT$746.3 billion. — Reuters reports the market estimate and the actual result. source
- confirmed Advanced technologies accounted for 79% of wafer revenue. — TSMC defines advanced technologies as 7-nanometre and more advanced processes and gives the 79% share. source
- confirmed TSMC forecast fourth-quarter revenue of $52.3 billion to $54.3 billion. — The range is included in the company’s forward-looking guidance. source
- confirmed Taiwan’s benchmark index fell 3.4% and TSMC shares fell 2% before the results. — The market movements are reported by AP in its 15 October market coverage. source
- confirmed TSMC supplies companies including Nvidia and Apple. — Reuters identifies Nvidia and Apple among TSMC’s customers. source
Editor's note
The quarterly results, margins and guidance are confirmed by TSMC’s release, while Reuters independently confirms the record profit and market beat. TSMC does not publish a separate AI-revenue figure, so the link between the result and AI demand is attributed to reporting and market context rather than presented as a precise company breakdown.Sources
- 3Q26 Quarterly Management Report — Taiwan Semiconductor Manufacturing Company
- TSMC Q3 profit jumps 69% to record, beating expectations — Reuters via Investing.com
- A deepened tech sell-off drags Asian stocks lower as markets in South Korea and Japan sink — The Associated Press
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