Q3 FY2026
Filed Oct 15, 2026TSMC Reports Third Quarter EPS of NT$29.43
Third-quarter revenue, gross profit, operating income, net income and EPS increased year-over-year and sequentially, while management cited strong leading-edge demand and guided fourth-quarter revenue to US$52.3 billion to US$54.3 billion.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net salesother | NT$1.49T | 17.6% | 50.9% |
| Revenue in US dollarsother | $46.72B | 16.2% | 41.2% |
| Gross profitother | NT$992.4B | 15.4% | 68.6% |
| Gross marginother | 66.4% | – | – |
| Income from operationsother | NT$876.4B | 14.3% | 75.0% |
| Operating marginother | 58.7% | – | – |
| Income before taxother | NT$911.0B | 5.6% | 73.4% |
| Net incomeother | NT$763.1B | 8.0% | 68.7% |
| Net profit marginother | 51.1% | – | – |
| Diluted EPSother | NT$29.43 | 8.0% | 68.7% |
| Diluted earnings per ADR unitother | US$4.60 per ADR unit | – | – |
| 2-nanometer shipments as a share of total wafer revenueother | 8% | – | – |
| 3-nanometer shipments as a share of total wafer revenueother | 33% | – | – |
| 5-nanometer shipments as a share of total wafer revenueother | 28% | – | – |
| 7-nanometer shipments as a share of total wafer revenueother | 10% | – | – |
| Advanced technologies, defined as 7-nanometer and more advanced technologies, as a share of total wafer revenueother | 79% | – | – |
| Weighted average outstanding sharesother | 25,932 million weighted average outstanding shares | – | – |
| Weighted average outstanding sharesother | 25,930 million weighted average outstanding shares | – | – |
fourth quarter 2026 outlook
- RevenueUS$52.3 billion to US$54.3 billion
- Gross margin65% to 67%
- NoteOperating profit margin is expected to be between 56.5% and 58.5%.
- NoteExchange rate assumption of 1 US dollar to 31.8 NT dollars.
What drove it
- Strong demand for leading-edge process technologies supported third-quarter business.
- Management expects continued strong demand for leading-edge process technologies in fourth quarter 2026.
- Management cited the steep ramp-up of its 2-nanometer technology.
- Advanced technologies, defined as 7-nanometer and more advanced technologies, accounted for 79% of total wafer revenue.
Concerns
- 3Q2026 figures have not been approved by Board of Directors.
- The release did not provide segment revenue, cash flow, capital expenditure, capital-return, cash or debt information.
What to watch
- Fourth-quarter 2026 revenue outlook of US$52.3 billion to US$54.3 billion.
- Fourth-quarter 2026 gross profit margin outlook of 65% to 67%.
- Fourth-quarter 2026 operating profit margin outlook of 56.5% to 58.5%.
- Continued demand for leading-edge process technologies and the ramp-up of 2-nanometer technology.
Analysis
TSMC reported a strong third quarter under TIFRS on a consolidated basis. Net sales were NT$1,494,243 million, up 50.9% year-over-year and 17.6% from the second quarter. Revenue in US dollars was $46.72 billion, up 41.2% year-over-year and 16.2% from the previous quarter. Management attributed the quarter to strong demand for leading-edge process technologies.
Profit growth outpaced sales growth on the reported NT-dollar basis. Gross profit increased 68.6% year-over-year to NT$992,379 million, income from operations increased 75.0% to NT$876,445 million, and net income increased 68.7% to NT$763,064 million. Reported gross margin was 66.4%, operating margin was 58.7%, and net profit margin was 51.1%.
Technology mix remained concentrated in advanced nodes. Shipments of 2-nanometer accounted for 8% of total wafer revenue, while 3-nanometer, 5-nanometer and 7-nanometer accounted for 33%, 28% and 10%, respectively. Technologies at 7-nanometer and more advanced represented 79% of total wafer revenue. Management specifically highlighted the steep ramp-up of 2-nanometer technology entering the fourth quarter.
For fourth quarter 2026, management guided revenue to US$52.3 billion to US$54.3 billion, using an exchange-rate assumption of 1 US dollar to 31.8 NT dollars. It guided gross profit margin to 65% to 67% and operating profit margin to 56.5% to 58.5%. The release provided no cash flow, balance-sheet, capital-expenditure or capital-return data, and stated that 3Q2026 figures have not been approved by the Board of Directors.
Management, verbatim
Our business in the third quarter was supported by strong demand for our leading-edge process technologies.
Wendell Huang, Senior VP and Chief Financial Officer of TSMC
Moving into fourth quarter 2026, we expect our business to be supported by continued strong demand for our leading-edge process technologies, including the steep ramp-up of our 2-nanometer technology.
Wendell Huang, Senior VP and Chief Financial Officer of TSMC
Not in the filing
stated, not guessed- Prior outlook was not provided, so no comparison of actual results with prior guidance is available.
- Segment revenue and segment-level comparisons were not reported.
- Operating cash flow was not reported.
- Free cash flow was not reported.
- Cash and cash equivalents were not reported.
- Debt was not reported.
- Capital expenditures were not reported.
- Share repurchases were not reported.
- Dividends were not reported.
- Fourth-quarter operating expenses guidance was not reported.
- Fourth-quarter tax-rate guidance was not reported.
- Prior-year and prior-quarter gross margin were not reported.
- Prior-year and prior-quarter operating margin were not reported.
- Prior-year and prior-quarter net profit margin were not reported.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.