A sixth straight record
Taiwan Semiconductor Manufacturing Company reported third-quarter revenue of US$46.72 billion, up 41.2 percent from a year earlier and 16.2 percent from the previous quarter. The figure beat the top of TSMC's own guidance range of US$44.6 billion to US$45.8 billion and topped analyst consensus of about US$45.6 billion.
Net income was NT$763.06 billion, roughly US$23.6 billion, up 68.7 percent year over year and the company's sixth consecutive record quarter. Earnings per share came in at NT$29.43, ahead of the NT$746.3 billion profit estimate tracked by LSEG. Gross margin was 66.4 percent, inside guidance.
AI is now most of the business
High-performance computing, the category that covers AI accelerators and data-centre chips, grew 22 percent from the second quarter and reached 68 percent of revenue. Consumer electronics, by contrast, fell 12 percent and accounted for just 1 percent of sales.
Chairman and chief executive C.C. Wei said AI demand is extremely robust and still far above what TSMC can supply. He said the company's forecast of high-50s percent growth in AI accelerators through 2029 will probably prove conservative, noting that server CPUs for agentic AI are not even counted in that number. He also warned that consumer and price-sensitive markets are being squeezed by rising component prices, so the company is planning 2027 cautiously.
2nm, capacity and prices
The N2 process is ramping fast and already accounts for 8 percent of wafer revenue. That early ramp is one reason gross margin slipped 1.3 percentage points, and overseas fabs are diluting margins by close to 2 percentage points this year, widening to 3 to 4 percent in later years as more US capacity starts up.
TSMC guided fourth-quarter revenue to US$52.3 billion to US$54.3 billion. Reports suggest the company will raise foundry prices by 3 to 6 percent from January 2027, with steeper increases on advanced nodes, while mature capacity stays tight. For chip designers, the message is straightforward: leading-edge capacity is sold out, and it is getting more expensive.
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