TSMC reported a sixth straight quarter of record profit on Thursday, October 15, as demand for advanced AI chips kept its factories busy. Why it matters: at a moment when investors are questioning how much debt the AI buildout can carry, the company that actually makes most of the world’s leading AI chips is still growing fast — and expects the next quarter to be bigger.
October 15, 2026
What happened?
Taiwan Semiconductor Manufacturing Co., the world’s largest contract chipmaker, said net profit for the July-to-September quarter rose about 69% from a year earlier to T$763.1 billion, or about $23.6 billion. That beat the T$746.3 billion consensus in an LSEG SmartEstimate drawn from 16 analysts, and it was the company’s highest net profit ever.
Revenue told the same story. Third-quarter revenue reached about NT$1.494 trillion, roughly $46.7 billion — up about 51% from a year earlier and about 18% from the previous quarter, ahead of the company’s own guidance range. Gross margin came in at 66.4%.
Where did the growth come from?
High-performance computing, the segment that includes AI servers and data-center chips, accounted for 68% of revenue, up from 57% a year earlier. Smartphones made up 21%. Advanced process technologies of 7 nanometres and below contributed 79% of wafer revenue, with 3nm at 33%, 5nm at 28%, 7nm at 10%, and the newer 2nm node already at 8% — up from 3% in the second quarter. Analysts also point to continued strong demand for TSMC’s advanced packaging, including CoWoS, which AI accelerators rely on.
What did TSMC guide for the fourth quarter?
On its earnings call, the company forecast fourth-quarter revenue of $52.3 billion to $54.3 billion, compared with $33.73 billion a year earlier — implying year-on-year growth of roughly 55% to 61%. It also maintained its 2026 capital-spending forecast at $60 billion to $64 billion, a sign it still plans to spend heavily to add advanced capacity.
The results arrived a day after chip-equipment maker ASML gave an upbeat demand outlook, and against a rough market backdrop: AI infrastructure shares slumped this week as rate-hike expectations raised the cost of funding the buildout. TSMC’s own Taipei-listed shares closed down 2% ahead of the release, in line with that broader sell-off.
Why it matters
TSMC sits underneath almost the entire AI trade. It manufactures advanced chips for customers including Nvidia and Apple, so its order book is one of the cleanest real-world signals of whether AI demand is slowing or still accelerating. This quarter, the signal is clear: the foundry is being paid, in record amounts, before the debates about downstream AI profits are settled. For readers weighing AI stocks, tools, or hardware, that makes TSMC’s outlook a useful reality check — the spending is real, the growth is real, and so are the market’s worries about how it is all being financed.
Frequently asked questions
How much profit did TSMC make in the third quarter?
Net profit was T$763.1 billion, about $23.6 billion, up roughly 69% from a year earlier — a sixth consecutive quarterly record and ahead of analyst expectations.
How much of TSMC’s revenue comes from AI and high-performance computing?
High-performance computing accounted for 68% of third-quarter revenue, up from 57% a year earlier, reflecting strong demand for AI server and data-center chips.
What is TSMC forecasting for the fourth quarter?
Revenue of $52.3 billion to $54.3 billion, implying growth of about 55% to 61% from a year earlier, with 2026 capital spending still planned at $60 billion to $64 billion.
Sources: Reuters via CTech, CNBC, Seoul Economic Daily