The chipmaker reported consolidated revenue of NT$1.494 trillion and net income of NT$763.06 billion for the three months ended Sept. 30. Revenue rose 50.9% from a year earlier, while net income and diluted earnings per share each increased 68.7%. In U.S. dollars, revenue was $46.72 billion, up 41.2% year over year and 16.2% from the previous quarter.
Reuters reported that it was TSMC's sixth consecutive quarter of record profit. Net income also beat an NT$746.3 billion LSEG estimate.
Leading-edge chips carry the quarter
TSMC's newest manufacturing processes made up most of its wafer business. Chips produced on 7-nanometer or more advanced technology accounted for 79% of wafer revenue. The 3nm process contributed 33%, 5nm contributed 28%, 7nm contributed 10%, and the newer 2nm process contributed 8%.
The mix matters because Nvidia, Apple and other chip designers rely on TSMC to manufacture their most advanced processors. Chief Financial Officer Wendell Huang said the quarter was supported by strong demand for leading-edge process technology and pointed to the rapid ramp of 2nm production as a source of fourth-quarter demand.
TSMC reported a gross margin of 66.4%, an operating margin of 58.7%, and a net profit margin of 51.1%.
Strong guidance, with a note of caution
TSMC expects fourth-quarter revenue of $52.3 billion to $54.3 billion, with gross margin between 65% and 67% and operating margin between 56.5% and 58.5%. It also kept its 2026 capital spending outlook at $60 billion to $64 billion, according to Reuters.
The company still flagged risks outside the booming AI market. CEO C.C. Wei said consumer and price-sensitive segments are being challenged by rising component prices and broader economic uncertainty, making TSMC cautious in its planning for 2027 even as AI demand remains robust.
TSMC is also evaluating expansion beyond its existing U.S. investment in Arizona. Wei said teams had been sent to assess Texas, and that any collaboration with Elon Musk's proposed Terafab complex would have to be operated by TSMC.
