TSMC Q3 2026 earnings: record NT$763 billion profit and a higher Q4 forecast, but the stock fell on October 15
Net income rose 68.7% and revenue beat TSMC's own guidance by US$0.92 billion, while gross margin slipped to 66.4% and chip stocks kept selling off.
- TSMC's Q3 2026 net income rose 68.7% to NT$763.06 billion, above the NT$740.8 billion consensus, on revenue of US$46.72 billion, up 41.2%.
- Fourth-quarter revenue guidance is US$52.3 billion to US$54.3 billion, with gross margin of 65% to 67%.
- Gross margin fell to 66.4% from 67.7% in the second quarter; the 2026 capital budget stayed at US$60 billion to US$64 billion.
Taiwan Semiconductor Manufacturing reported third-quarter 2026 net income of NT$763.06 billion on Thursday, October 15, up 68.7% from a year earlier and above the NT$740.8 billion analysts expected, on revenue of US$46.72 billion, up 41.2%. It guided fourth-quarter revenue to US$52.3 billion to US$54.3 billion. Its US-listed shares fell about 3% by mid-morning in New York as the chip selloff continued.
Revenue came in US$0.92 billion above the top of TSMC's own guidance, and earnings were NT$29.43 a share, or US$4.60 per American depositary share. The weak spot was margin: gross margin fell to 66.4% from 67.7% in the second quarter, and the fourth-quarter guidance of 65% to 67% puts the midpoint lower again.
TSMC's third quarter in numbers
| Q3 2026 | Comparison | |
|---|---|---|
| Revenue | US$46.72 billion (NT$1,494.24 billion) | +41.2% in US dollars, +50.9% in NT dollars from a year earlier |
| Net income | NT$763.06 billion | +68.7%; consensus NT$740.8 billion |
| Earnings per share | NT$29.43 | US$4.60 per ADR |
| Gross margin | 66.4% | 67.7% in Q2 2026 |
| Operating margin | 58.7% |
The fourth-quarter guidance
TSMC expects fourth-quarter revenue of US$52.3 billion to US$54.3 billion, which at the midpoint would be about 14% more than the third quarter, with gross margin of 65% to 67% and operating margin of 56.5% to 58.5%. It now expects full-year revenue growth of about 44% in US dollars and kept its 2026 capital spending budget at US$60 billion to US$64 billion.
The unchanged capital budget matters beyond TSMC. Equipment makers such as Tokyo Electron and Advantest sell into that spending, and they had fallen 7.8% and 14.96% in Tokyo hours earlier during the Asian chip selloff of October 15.
Why the stock fell after a record quarter
The results landed in the middle of a selloff that had little to do with TSMC's own numbers. A hotter-than-expected US inflation report on October 14 raised the odds of another Federal Reserve rate increase, and investors were questioning whether the companies borrowing to build AI data centers can keep spending at the same pace. The lower margin guidance gave sellers a specific reason. TSM closed Friday, October 16, at $412.61, down 2.28%, the day the Nasdaq fell 572.99 points.
Earlier in October TSMC signed a US$2 billion, five-year agreement for GlobalFoundries to make silicon interposers for it in the United States; our report on that deal has the terms.
What did TSMC report for Q3 2026?
Revenue of US$46.72 billion, up 41.2%, and net income of NT$763.06 billion, up 68.7%, above the NT$740.8 billion consensus. Earnings per ADR were US$4.60 and gross margin was 66.4%.
What is TSMC's Q4 2026 guidance?
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%. TSMC expects full-year revenue growth of about 44% in US dollars.
Why did TSMC stock fall after earnings?
The shares fell about 3% on October 15 as chip stocks extended a selloff driven by hot US inflation data and doubts about AI spending, and gross margin slipped to 66.4% from 67.7%.
Sources
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TSMC reports third quarter EPS of NT$29.43
— TSMC
Q3 2026 revenue NT$1,494.24B (US$46.72B), net income NT$763.06B, EPS NT$29.43 (US$4.60 per ADR), gross margin 66.4%, operating margin 58.7%.
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TSMC third quarter 2026 results with guidance (Form 6-K)
— TSMC via SEC
Q4 2026 guidance of US$52.3-54.3B revenue, 65-67% gross margin and 56.5-58.5% operating margin; Q2 gross margin 67.7%.
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Taiwan Semiconductor falls 3% despite record quarterly profit
— 24/7 Wall St
TSM fell about 3% by mid-morning; net income beat the LSEG consensus of NT$740.8B; full-year growth about 44%; capex held at US$60-64B.
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