TLDR
- TSM stock was down $15.12, or 3%, on Thursday despite a third-quarter beat.
- Net profit rose 68.7% to NT$763.1 billion, topping the NT$746.34 billion estimate.
- Revenue grew 41.2% to NT$1.49 trillion, ahead of the NT$1.47 trillion forecast.
- Operating margin came in at 58.7%, above the top of TSMC’s guidance range.
- TSMC is reportedly weighing a possible Texas investment beyond its Arizona plans.
TSM stock was down $15.12, or 3%, on Thursday after Taiwan Semiconductor posted record third-quarter results. The drop came even though both revenue and profit topped estimates.
Taiwan Semiconductor Manufacturing Company Limited, TSM
Net profit reached NT$763.1 billion, up 68.7% from a year earlier. Analysts had expected NT$746.34 billion, based on LSEG SmartEstimates.
Revenue rose 41.2% to NT$1.49 trillion, or roughly $46.4 billion. The forecast was NT$1.47 trillion.
This marks the sixth straight quarter of record net profit. That is a streak most chip firms would envy.
Margins and Cash Flow
Operating margin came in at 58.7%, above the top of the company’s 58% guidance range. That points to the pricing power TSMC holds while demand for AI chips stays strong.
TSMC $TSM Q3’26 EARNINGS HIGHLIGHTS
🔹 Revenue: $46.72B (Est. $44.93B) 🟢; +41.2% YoY
🔹 EPS: $4.60 (Est. $4.48) 🟢; per ADR
🔹 Gross Margin: 66.4% (Est. 66.3%) 🟡
🔹 Oper Margin: 58.7% (Est. 57.7%) 🟢
🔹 Net Income: NT$763.06B (Est. NT$737.9B) 🟢
🔹 Net Profit Margin: 51.1%… pic.twitter.com/YxYKoVi78J— Wall St Engine (@wallstengine) October 15, 2026
Free cash flow jumped to NT$476.56 billion. A year ago, it stood at NT$139.38 billion.
Diluted earnings per share rose to $0.92, according to one report. The board also approved a NT$7.00 cash dividend for the second quarter.
Net income works out to about $23.8 billion. Reports differ slightly on the dollar value of revenue, at $46.36 billion and $46.72 billion.
What Drove the Quarter
By technology, 3-nanometer chips made up the biggest slice of wafer revenue at 33%. Five-nanometer chips followed at 28%, and 7-nanometer chips at 10%.
The 2-nanometer chips accounted for 8% of wafer revenue. Advanced technologies, meaning 7-nanometer and below, made up 79%.
By platform, high-performance computing led with 68% of revenue. Smartphones came next at 21%.
Automotive was the fastest-growing segment from the prior quarter, up 23%. Not bad for a category that rarely steals the spotlight.
In July, TSMC outlined plans to expand its U.S. footprint, including a total planned investment of $265 billion in Arizona. The company is now reportedly looking past that state.
TSMC is said to be evaluating a potential investment in Texas. No formal announcement has been made.
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