Gotrade News - Taiwan Semiconductor Manufacturing (TSM) reported third-quarter 2026 net income of NT$763.06 billion on Thursday, October 15, up 68.7% year over year, with EPS of NT$29.43, according to the company's official release. Profit topped analyst estimates, a clean beat for AI chip investors after a jittery week for the sector.
Revenue reached NT$1,494.24 billion, or US$46.72 billion, up 50.9% year over year and above the company's own US$44.6 billion to US$45.8 billion guidance. Per TSMC, gross margin came in at 66.4%, operating margin at 58.7% and net profit margin at 51.1%.
TSMC Q3 Net Income NT$763 Billion vs NT$746 Billion Expected
The bar was high going in. As reported by TIKR, citing a Reuters report on the LSEG SmartEstimate from 16 analysts, consensus called for net profit to rise about 65% to NT$746.3 billion (US$23.4 billion), which would mark TSMC's sixth straight quarter of record profit. An earlier LSEG poll cited by Admirals had pointed to NT$740.8 billion.
Revenue held little suspense because TSMC publishes monthly sales. According to Admirals, the quarterly total released on October 8 had already beaten the LSEG SmartEstimate of NT$1.46 trillion, which shifted investor attention to margins and the fourth-quarter outlook.
The scorecard below compares the figures in TSMC's October 15 earnings release with the guidance the company gave in July and the consensus estimates reported by Admirals and TIKR.
| Metric | Q3 2026 actual | Expectation | Expectation source |
|---|
| Net income | NT$763.06 billion | NT$746.3 billion | LSEG SmartEstimate, via TIKR |
| Diluted EPS | NT$29.43 | NT$17.44 a year earlier | Q3 2025 actual, via Admirals |
| Revenue (US$) | US$46.72 billion | US$44.6 to 45.8 billion | TSMC July guidance |
| Gross margin | 66.4% | 65% to 67% (consensus 66.5%) | TSMC guidance; Hudson Labs, via Admirals |
| Operating margin | 58.7% | 56% to 58% | TSMC July guidance |
TSM, NVDA and INTC Market Data
| Ticker | Close | Daily change | Market cap |
|---|
| TSM | $430.00 | -3.40% | $2.23 trillion |
| NVDA | $221.30 | -3.16% | $5.33 trillion |
| INTC | $98.12 | -4.56% | $518.6 billion |
Regular-session close on October 14, 2026, New York time. Prices and changes: Yahoo Finance, cross-checked against Nasdaq's official close. Market cap: Nasdaq, as of October 15, 2026.
Gross margin landed inside the guided range but slightly under the 66.5% Hudson Labs consensus and the 67.5% Morgan Stanley had forecast, according to Admirals. Management had warned that the 2-nanometer ramp would dilute second-half gross margin by 3 to 4 percentage points, per TIKR. The release shows 2nm already accounted for 8% of wafer revenue in the quarter, with 3nm at 33% and 5nm at 28%.
TSMC Guides Q4 Revenue to US$52.3 Billion to US$54.3 Billion
For the fourth quarter, TSMC expects revenue of US$52.3 billion to US$54.3 billion, gross margin of 65% to 67% and operating margin of 56.5% to 58.5%, based on an exchange rate of 31.8 NT dollars per US dollar, according to the company's release. Ahead of the report, Morgan Stanley had forecast fourth-quarter revenue growth of 10% to 15% from the third quarter, as reported by Admirals.
"Moving into fourth quarter 2026, we expect our business to be supported by continued strong demand," said TSMC CFO Wendell Huang, pointing to the steep ramp of the company's 2-nanometer technology.
Huang also said third-quarter business was supported by strong demand for TSMC's leading-edge process technologies, per the release.
Why AI Stock Jitters Raised the Bar for TSM
The print arrived after a shaky stretch for AI-linked stocks. On October 8, chipmakers fell 3.4%, Nvidia (NVDA) dropped 2.9% and Intel (INTC) slid 5.3% after OpenAI said its annualized revenue was close to US$50 billion at the end of September, about US$20 billion below earlier figures, according to Admirals. TSM's ADR lost 3.01% that day to US$457.99, in the Nasdaq's worst session since mid-August.
Per Admirals, TSM's ADR closed at US$453.31 on October 9, 6.7% below its record close of US$485.80 on October 5. Options had priced in a move of about 4.3% in either direction around the results, and the stock fell 3.8% after its July report.
Macro pressure added to the caution. The US 10-year Treasury yield sat near 5.23% on October 8, a 24-year high, and investors were also weighing the September US CPI report due October 14, according to Admirals.
What Analysts Watch After TSMC's Beat
Morgan Stanley analyst Charlie Chan expected TSMC to lift its full-year revenue growth guidance to the low-to-mid 40% range from above 40%, as reported by TIKR. TSMC raised its 2026 capital expenditure guidance to US$60 billion to US$64 billion in July, per Admirals, a sign of how much leading-edge capacity the company is building for AI demand.
Consensus estimates keep TSMC's net margin at about 50% to 51% each quarter through the third quarter of 2027, according to TIKR, so the 2nm margin drag and any update to full-year growth targets on the earnings call are likely to shape how investors read the quarter.
This article is for education and information only and is not investment advice. Investment decisions are yours to make after your own research.
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