TSMC reported third-quarter 2026 revenue of US$46.72 billion and a gross margin of 66.4% on 15 October 2026, according to its earnings release. By our arithmetic, revenue was above the top of the US$44.6 billion to US$45.8 billion it guided in July, and gross margin inside the 65% to 67% range.
TSMC’s release is the source for every figure below; comparisons with its own guidance are our arithmetic.
In New Taiwan dollars, revenue was NT$1,494.24 billion and net income NT$763.06 billion, the release said, with diluted earnings per share of NT$29.43.
In US dollars, revenue rose 41.2% from a year earlier and 16.2% from the second quarter, according to TSMC.
TSMC reports in New Taiwan dollars first. In NT dollars, “third quarter revenue increased 50.9%, while net income and diluted EPS both increased 68.7%” from a year earlier, the release said, and against the second quarter revenue rose 17.6% and net income 8.0%.
In US dollars, the release said, revenue “was $46.72 billion, which increased 41.2% year-over-year and increased 16.2% from the previous quarter.” Our headline uses that US-dollar figure. Some reports pair the NT-dollar growth rate with a converted dollar figure, so the two growth rates can appear side by side.
Operating margin was 58.7% and net profitmargin 51.1%, the release said.
TSMC’s quarterly revenue in US dollars, 3Q25 to 3Q26, from its earnings releases. Its July guidance for 3Q26 was US$44.6 billion to US$45.8 billion.
Business Pill · CAPEX AND DEPRECIATION
The key insight: As we read it, the number that matters most is the mix: high-performance computing, the chips behind AI data centres, was 68% of TSMC’s third-quarter net revenue, against 66% in the second quarter.
TSMC’s gross margin by quarter, from its earnings releases. Its July guidance for 3Q26 was 65% to 67%.
Against Its Own Guidance
In July TSMC guided third-quarter revenue of US$44.6 billion to US$45.8 billion, at an exchange-rate assumption of US$1 to NT$32. By our arithmetic, the reported US$46.72 billion is US$0.92 billion above the top of the range.
By our arithmetic, gross margin of 66.4% was inside the 65% to 67% range it guided, and operating margin of 58.7% was above the top of the 56% to 58% range it guided.
Gross margin of 66.4% compares with 67.7% in the second quarter, which TSMC reported in July.
The version of TSMC’s release with guidance, posted later on 15 October, sets out the fourth-quarter outlook. “Revenue is expected to be between US$52.3 billion and US$54.3 billion,” the release said, and, “based on the exchange rate assumption of 1 US dollar to 31.8 NT dollars,” gross profitmargin “is expected to be between 65% and 67%” and operating profitmargin “between 56.5% and 58.5%.” The guidance slide in TSMC’s presentation gives the same ranges.
By our arithmetic, the US$53.3 billion midpoint would be about 14.1% above the third quarter’s US$46.72 billion; the range runs from about 11.9% to 16.2% above it.
“Moving into fourth quarter 2026, we expect our business to be supported by continued strong demand for our leading-edge process technologies, including the steep ramp-up of our 2-nanometer technology,” said Wendell Huang, TSMC’s chief financial officer, in the release.
By technology, shares of wafer revenue were 2-nanometer 8%, 3-nanometer 33%, 5-nanometer 28%, 7-nanometer 10%, the release said. Advanced technologies, 7-nanometer and below, were 79%.
Capital Spending
Capital expenditures were US$13.84 billion in the quarter and US$40.64 billion for the year to date, according to the management report, after US$15.70 billion in the second quarter.
Update, 15 October: What Wei Said on the Call
On the earnings call, according to the full transcript published by Benzinga, a J.P. Morgan analyst asked chief executive C.C. Wei about expansion in Texas and about any engagement with SpaceX or Tesla. Wei answered on the United States first:
“So recently we did, you know, expand our capacity consideration to see outside Arizona where we can get another chance to expand our capacity. And Texas is the one. So we sent teams to Texas to do all the evaluation and we also talked to one of our customers who tried to build a fab, Terafab. Let me be more specific. And we discussed with them whether we can utilize that extra capacity also. So we’re still in discussion. If we have any solid conclusion, we’ll share with you.”
Asked whether any such fab would be TSMC-run, Wei said: “We are still in discussion. Let me say that it’s not the way it would be possible, but the fab has got to be run by Taiwan Semiconductor.” In the words quoted in the transcript, Wei names Terafab and “one of our customers”; the analyst’s question, not Wei’s answer, names SpaceX and Tesla.
On demand, asked whether supply will be tighter in 2027 than in 2026, Wei said: “I just mentioned the demand is extremely robust and getting higher and higher” and, after describing checks with customers and their customers, “The result is the demand is very, very high. And so the gap between demand and supply is still quite big.” On profitability he said: “there’s no ceiling for Taiwan Semiconductor’s profitability, but a dramatic increase will not happen overnight either.”
Capacity: one more 3nm fab
In his prepared remarks, per the same transcript, Wei said TSMC historically does not add capacity to a node once it reaches its targeted capacity, but that it is “executing well on our global capacity plan to add three new fabs to support the robust multi-year pipeline of demand for 3-nanometer technologies in Taiwan.” He then announced one more:
“Volume production for our new 3-nanometer fab in Tainan Science Park is well on track to begin in the first half of 2027. In addition, driven by strong demand from our customer, we have decided to add one additional 3-nanometer fab in Tainan. Volume production is scheduled for the first half of 2028.”
Outside Taiwan, Wei said Arizona’s second fab is in tool move-in and installation, with “Volume production will begin in third quarter ’27, slightly ahead of our previous schedule,” and that TSMC is “progressing well to our plan to utilize 3-nanometer in our second fab” in Japan, with volume production scheduled in 2028. TSMC also continues “to convert 5-nanometer tools to support 3-nanometer capacity in Taiwan.” His summary line: “We have no intention to leave food on the table for others.”
These are statements of intent and discussion on a call, not an announced agreement; TSMC has not published terms, a site or a timetable for Texas. TSMC posts the call audio on its investor site.
The Structural Read
As we read it, TSMC’s revenue line is one of the earliest hard readings of how much leading-edge chip demand is turning into wafers, as distinct from announcements.
TSMC’s management report puts capital expenditures at US$13.84 billion in the quarter; as we read it, that is spending on future capacity.
TSMC, 3Q26 release headline
“TSMC Reports Third Quarter EPS of NT$29.43”
Three Implications
AI CHIP BUYERS TSMC’s release breaks its wafer revenue out by node; as we read it, the leading-edge share is the capacity AI accelerators compete for.
HYPERSCALERS As we read it, the high-performance computing share in TSMC’s management report is where data-centre spending shows up in its revenue.
INVESTORS TSMC’s own guided range is the benchmark it set; the comparison above is our arithmetic on its figures.
The Business Engineer Lens
This story maps onto the Business Engineer framework The AI Capex Map.
The framework puts it this way: “The total cycle: $725B Big Four + $50B Oracle + $13B Apple + $60B Neoclouds + $80B China + $60B Sovereigns + $48B Other = ~$1.04 trillion in 2026 compute capex, the first trillion-dollar year of compute capex in human history.”
As we read it, a quarter like this one is the supply side of that demand: what the cycle’s spending turns into at the chip and tool makers.
What Is Not Established
The new figures here are from TSMC’s 3Q26 earnings release and management report; the guidance and prior-quarter figures are from its earlier quarterly releases. Comments made on the earnings call, including any change to full-year capital spending plans, are not in those documents and are not used here unless quoted from TSMC’s transcript.
Comparisons with guidance are our arithmetic on TSMC’s own figures.
Business Engineer Framework
The AI Capex Map
A Business Engineer map of where the AI capital spending goes, layer by layer.
TSMC reported third-quarter 2026 revenue of US$46.72 billion and a gross margin of 66.4%; by our arithmetic, revenue was above the top of the US$44.6 billion to US$45.8 billion it guided.
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A note on sourcing. This piece is based on TSMC’s 3Q26 earnings release of 15 October 2026, which we read in full, including the later version with fourth-quarter guidance, and its 3Q26 presentation, and on its earlier quarterly releases for the prior-quarter figures. C.C. Wei’s call remarks are quoted from the full earnings-call transcript published by Benzinga, which we read in full; TSMC posts the call audio itself. Comparisons with the company’s own guidance are our arithmetic. Growth rates are given in both currencies exactly as the release states them; the headline figure is TSMC’s own US-dollar revenue. Nothing here is a forecast, and nothing here is financial or investment advice.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur, HackerNoon and Search Engine People. Find him on LinkedIn and Substack. See how we source.
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