# TSMC Q3 Profit Jumps 69% on Strong AI Chip Demand

- URL: https://stocks.freetheai.org/news/tsmc-q3-profit-jumps-69-on-strong-ai-chip-demand-26f3aa
- Published: 2026-10-15T05:57:40Z
- Category: earnings; sentiment: mixed; impact: high
- Symbols: [TWSE:2330](https://stocks.freetheai.org/symbols/TWSE-2330)
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Taiwan Semiconductor Manufacturing Co. (TWSE:2330) reported a 68.7% surge in third-quarter net income to NT$763.06 billion, topping analyst estimates. Revenue rose 50.9% to NT$1.49 trillion, driven by strong artificial intelligence chip demand. Diluted earnings reached NT$29.43 per share, or $4.60 per ADR. Despite the earnings beat, the company's Taiwan-listed shares dipped 2.01% to 2,440 TWD, while U.S.-listed shares fell 3.4% on Wednesday.

Profitability held up well as gross margin hit 66.4% and operating margin reached 58.7%, topping management forecasts. Advanced chips accounted for 79% of wafer revenue, led by 3nm at 33%, 5nm at 28%, and 2nm chips making up 8%. The solid margins eased fears that high expansion costs and ramping new technologies would dilute profits.

Investors are now turning to management's upcoming earnings call for fourth-quarter guidance and full-year outlook updates. Key areas of focus include capital expenditure plans, with 2026 capex previously projected at $60 billion to $64 billion, as well as progress on global expansion projects.

## Key points

- Taiwan Semiconductor Manufacturing Co. net income rose 68.7% year-over-year to NT$763.06 billion in Q3, beating expectations.
- Quarterly revenue jumped 50.9% to NT$1.49 trillion, with earnings per ADR coming in at $4.60.
- Operating margin reached 58.7%, exceeding management guidance of 56% to 58%.
- Advanced technologies made up 79% of total wafer revenue, led by 3nm chips at 33%.
- Taiwan Semiconductor Manufacturing Co. shares fell 2.01% in Taiwan to 2,440 TWD following a 3.4% drop in U.S. ADRs.

## Questions and answers

### What were TSMC Q3 earnings results?

Taiwan Semiconductor Manufacturing Co. reported Q3 net income of NT$763.06 billion, up 68.7% year-over-year, on revenue of NT$1.49 trillion. Diluted earnings per share reached NT$29.43, or $4.60 per ADR.

### What were TSMC Q3 profit margins?

The company posted a gross margin of 66.4% and an operating margin of 58.7%, beating management guidance of 56% to 58%. Net margin stood at 51.1%.

### What percentage of TSMC revenue comes from advanced chips?

Chips using 7-nanometer and more advanced technologies represented 79% of wafer sales in the third quarter, with 3nm contributing 33%, 5nm adding 28%, and 2nm accounting for 8%.