The Pulse
TSMC Profit Rises 68.7% to Record as AI Demand Outstrips Supply
TSMC reported third-quarter net income of NT$763.06 billion, up 68.7% from a year earlier, as revenue climbed 50.9%. CEO C.C. Wei said demand exceeds the chipmaker’s ability to supply, while TSMC forecast fourth-quarter revenue of up to $54
AI.info Team · Written with AI ·
NT$763 billion profit tops forecasts
TSMC’s third-quarter net income rose 68.7% year over year to NT$763.06 billion, a record, as the world’s largest contract chipmaker reported results on October 15. Revenue climbed 50.9% to NT$1.494 trillion, or $46.72 billion, for the three months ended September 30. Diluted earnings per share reached NT$29.43, up 68.7% from a year earlier.
The profit exceeded the T$746.3 billion LSEG SmartEstimate, a consensus weighted toward analysts with stronger forecasting records. TSMC’s US-dollar revenue increased 41.2% year over year. Its net profit margin was 51.1%, compared with 45.7% in the same quarter last year.
Wei says chip demand exceeds capacity
The earnings highlight the pressure that AI-related demand is putting on production capacity. TSMC manufactures chips for customers including Nvidia and Apple; the company’s quarterly release does not assign the growth to a single customer or product. Speaking at the earnings conference, chairman and CEO C.C. Wei described a widening gap between orders and available output.
“The demand, actually, is still far above our capability today to supply, and we’re working very hard to narrow the gap.”
C.C. Wei, chairman and CEO of TSMC, speaking at the earnings conference, as quoted by The Associated Press
Advanced process technologies made up 79% of wafer revenue in the quarter, TSMC said. That category includes 7-nanometer processes and smaller; 3-nanometer chips accounted for 33% of total wafer revenue, 5-nanometer for 28%, and 2-nanometer for 8%. The figures show how heavily the company’s sales depend on its more advanced manufacturing lines.
Fourth-quarter forecast points to further growth
TSMC forecast fourth-quarter revenue of $52.3 billion to $54.3 billion, above the third quarter’s $46.72 billion. It projected a gross margin of 65% to 67%, compared with 66.4% in the quarter just reported, and an operating margin of 56.5% to 58.5%, against 58.7%.
Those ranges set expectations for a quarter in which the company anticipates higher sales but does not project further margin expansion. The results presentation also shows third-quarter capital spending of NT$443.21 billion, down from NT$496 billion in the prior quarter but up from NT$287.45 billion a year earlier.
Capacity expansion meets a cautious outlook
Wei told the earnings conference that TSMC is evaluating possible investment in Texas and has sent teams to assess the option, according to the Associated Press. The company has also said it is open to discussions about Elon Musk’s proposed Terafab project, while Wei stressed that any Texas plant would have to be run by TSMC. The evaluation is still under discussion, not a confirmed factory commitment.
Wei also cautioned that consumer-facing and price-sensitive markets face pressure from rising component prices and economic uncertainty. TSMC said it is planning prudently for 2027 even as it projects fourth-quarter revenue as high as $54.3 billion. The company’s third-quarter release records the immediate scale of the boom: NT$1.494 trillion in revenue and NT$763.06 billion in net income.