Taiwan Semiconductor Manufacturing Co has reported a record third-quarter net profit, beating analyst expectations as relentless demand for artificial intelligence chips kept its most advanced factories running at full pace.
Sixth straight quarter of record earnings
The world’s largest contract chipmaker said July-to-September net profit rose 68.7 per cent from a year earlier to NT$763.1 billion, about US$23.5 billion. The figure topped the market consensus and marked a sixth consecutive quarter of record earnings. Revenue climbed 50.9 per cent to NT$1.49 trillion, roughly US$46.7 billion, beating the company’s own guidance of US$44.6 billion to US$45.8 billion. Earnings per share reached NT$29.43, up 68.7 per cent year on year.
High-performance computing — the segment that includes AI processors — supplied 68 per cent of revenue, up from 57 per cent a year earlier, underlining how completely the AI buildout now drives the chip business. The most advanced manufacturing nodes, 7 nanometres and below, accounted for 79 per cent of wafer revenue, with the 3-nanometre process alone contributing a third and the new 2-nanometre node rising to 8 per cent from 3 per cent in the previous quarter.
Margins narrow as new nodes ramp up
Profitability showed the strain of expansion. Gross margin slipped to 66.4 per cent from 67.7 per cent in the second quarter, which the company attributed to costs from the early ramp-up of 2-nanometre production. Management also issued strong guidance for the final quarter, projecting revenue of US$52.3 billion to US$54.3 billion, and reiterated a 2026 capital budget of US$60 billion to US$64 billion. Executives told analysts that demand for leading-edge technology continues to outpace available supply.
For American readers, the results carry a domestic dimension: the company has committed to a US$265 billion investment programme in Arizona and is reportedly evaluating a further expansion in Texas, part of the industry’s push to localise advanced chip manufacturing. The wider semiconductor market has been volatile this autumn — China’s CXMT memory advance has rattled chip stocks such as Micron and SK Hynix, while AI revenue doubts pulled semiconductor stocks off their October highs. A full breakdown of the quarterly figures is available for readers seeking more detail.
