TSMC Q3 2026 net income NT$763 billion — a sixth straight record, and 2nm is already 8% of sales
TSMC reported third-quarter 2026 net income of NT$763.06 billion on October 15, up 68.7% year on year and a record for a sixth straight quarter. Revenue was NT$1,494.24 billion, or US$46.72 billion, above the top of the US$44.6-45.8 billion range it guided in July. Gross margin was 66.4% and net margin 51.1%. By node, 3nm made up 33% of wafer revenue and 5nm 28%, while 2nm already reached 8%. On a day when AI-spending fears sent the KOSPI down 7.57%, the company that actually makes AI chips showed no sign of demand cracking.
The three lines
- Results — net income NT$763.06B (+68.7%), revenue US$46.72B (+41.2%), above guidance
- Margins — gross 66.4%, operating 58.7%, net 51.1%; within July's 65-67% gross-margin guide
- Nodes — 2nm 8%, 3nm 33%, 5nm 28%, 7nm 10%; 7nm-and-below is 79%
Key questions
- TSMC Q3 2026 earnings
- **Net income NT$763.06 billion and revenue NT$1,494.24 billion, both records.** | Item | Q3 2026 | YoY | QoQ | |---|---|---|---| | Revenue (NT$) | 1,494.24B | +50.9% | +17.6% | | Revenue (US$) | 46.72B | +41.2% | +16.2% | | Net income | NT$763.06B | +68.7% | +8.0% | | EPS | NT$29.43 | +68.7% | — | | Gross margin | 66.4% | — | — | | Net margin | 51.1% | — | — |
- TSMC 2nm revenue share
- **2nm was 8% of Q3 wafer revenue; 3nm remains the largest at 33%.** | Node | Share | |---|---| | 2nm | 8% | | 3nm | 33% | | 5nm | 28% | | 7nm | 10% | | 7nm and below | 79% |
- TSMC Q3 vs estimates
- **Revenue beat the company's own guidance; profit beat the consensus.** | Item | Expected | Actual | |---|---|---| | Revenue (July guide) | $44.6-45.8B | $46.72B | | Gross margin (guide) | 65-67% | 66.4% | | Net income (LSEG mean) | ~NT$740.8B | NT$763.06B |
On a day of AI-bubble fears, the company that makes the chips posted another record. TSMC said on October 15, 2026 that third-quarter net income was NT$763.06 billion, up 68.7% from a year earlier — its sixth consecutive record quarter. Revenue was NT$1,494.24 billion, or US$46.72 billion, above the top of the US$44.6-45.8 billion range it guided in July.
The same day South Korea's KOSPI fell 7.57% on US inflation and AI-funding worries. Markets fretted about the money buyers use to pay for AI chips; the maker's books showed no sign of that worry yet.
1. The quarter in numbers
| Item | Q3 2026 | YoY | QoQ |
|---|---|---|---|
| Revenue (NT$) | 1,494.24B | +50.9% | +17.6% |
| Revenue (US$) | 46.72B | +41.2% | +16.2% |
| Net income | NT$763.06B | +68.7% | +8.0% |
| EPS | NT$29.43 (US$4.60 per ADR) | +68.7% | — |
| Gross margin | 66.4% | — | down from 67.7% in Q2 |
| Operating margin | 58.7% | — | — |
| Net margin | 51.1% | — | — |
Revenue grew 17.6% on the quarter but net income only 8.0%, because margins slipped. TSMC warned in July that the steep ramp of 2nm would weigh on gross margin, guiding 65-67%; it landed at 66.4%. New nodes carry low early yields and heavy depreciation.
2. By node — 2nm already at 8%
| Node | Share of Q3 wafer revenue | Typical use |
|---|---|---|
| 2nm | 8% | Next-gen AI accelerators, phone SoCs |
| 3nm | 33% | Current AI accelerators, premium phones |
| 5nm | 28% | Previous-gen accelerators, high-performance chips |
| 7nm | 10% | General high-performance |
| 7nm and below | 79% | — |
Microsoft's Maia 300 AI chip, unveiled two days earlier, is built on TSMC 2nm. With 79% of revenue from 7nm-and-below, TSMC's results are effectively a thermometer for AI and high-performance chip demand.
3. Why chip stocks still fell the same day
| Question | What TSMC's numbers say | What the market fears |
|---|---|---|
| Is AI demand cracking? | No — revenue beat guidance | Next year, not now |
| Who pays? | Nvidia and hyperscaler orders | Their customers (e.g. CoreWeave) borrow to buy |
| Rates | No direct effect | US CPI at 3.7% revived hike bets |
| Competition | Leading-edge lead | Chinese memory expansion (hits Korean memory names) |
Markets trade next year's numbers, not this quarter's. CoreWeave's bonds trading at distressed yields reflected fears about buyers' finances; TSMC's quarter confirmed that those fears have not yet turned into cancelled orders.
4. What remains open
- Q4 guidance: the outlook from the 2 p.m. Taipei call was not confirmed at writing; it and 2027 capex were the market's focus.
- Capex: last confirmed at US$60-64 billion for 2026 (July).
- Next session: how Korean chip stocks take TSMC's numbers after the crash.
- Business model: how TSMC earns this with no products of its own is explained in "What is a foundry".