On October 15, 2026, TSMC reported results for the third quarter (July–September). Revenue in U.S. dollars was $46.72 billion, up 41.2% year on year and 16.2% quarter on quarter. It exceeded the top of the company's guidance ($44.6–45.8 billion).

In New Taiwan dollars, revenue was NT$1,494.24 billion (up 50.9% year on year), net income was NT$763.06 billion (up 68.7%), and diluted EPS was NT$29.43.

Margins: slightly down from last quarter, within guidance

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01

Gross margin

66.4% (67.7% last quarter, 59.5% a year earlier). Within guidance of 65–67%.

02

Operating margin

58.7% (60.3% last quarter, 50.6% a year earlier). Above guidance of 56–58%.

03

Net margin

51.1% (55.6% last quarter). Non-operating income fell from NT$95.8 billion last quarter to NT$34.6 billion.

04

Exchange rate

Average US$1 = NT$31.98 (32.0 last quarter, 29.91 a year earlier).

HPC is more than two-thirds of revenue

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By platform, HPC (high-performance computing), including AI, accounted for 68% and grew 22% quarter on quarter, leading overall growth. Smartphone was 21%, up 10% quarter on quarter, and automotive, though only 4%, grew 23%. Digital consumer electronics (DCE) fell 12%.

By process, 2nm was 8% of wafer revenue, 3nm 33%, 5nm 28% and 7nm 10%; advanced processes at 7nm and below totaled 79%. 2nm has started to show up in the numbers as volume revenue.

The gap between shipment growth and revenue growth

Capital expenditure was NT$443.21 billion, down from NT$496.0 billion last quarter but well up from NT$287.45 billion a year earlier. Operating cash flow was NT$919.77 billion and free cash flow was NT$476.56 billion.

Q4 and full-year outlook

TSMC guided Q4 revenue to $52.3–54.3 billion, gross margin to 65–67% and operating margin to 56.5–58.5% (assuming US$1 = NT$31.8). The guidance midpoint ($53.3 billion) is about 14% above Q3. For full-year 2026, TSMC expects revenue to grow about 44% in U.S. dollars.

CFO Wendell Huang said strong demand for advanced processes, including the rapid ramp of 2nm, will continue in Q4.

What it means for back-end and procurement teams

  • Packaging figures are not a disclosed segment: the results materials (the 6-K filed with the SEC) do not break out revenue or capacity for advanced packaging such as CoWoS. Back-end supply and demand has to be read by combining the strongest clue, HPC revenue growth (22% quarter on quarter), with the overall picture of CoWoS, HBM and chiplets
  • Front-end growth feeds back-end demand: many high-performance AI chips use 2.5D packaging (CoWoS and the competition with Intel) and HBM. While HPC revenue keeps growing about 20% quarter on quarter, demand for interposers, ABF substrates and HBM is likely to stay strong
  • Q4 is also guided up from Q3: if the guidance holds, HPC demand stays high into year-end. When back-end expansions such as Amkor's Arizona site come online becomes the key question for procurement plans

Referenced Fact Cards