TSMC's consolidated revenue for July–September 2026 reached NT$1,494.243 billion, based on the sum of its monthly reports. That is up 50.9% from a year earlier and 17.6% from the previous quarter, a new quarterly record. With September revenue, announced on October 8, the total also exceeds the top of the guidance the company gave in July. But strong revenue growth does not guarantee a matching rise in profit margins. TSMC expects its gross margin to dip temporarily as it rapidly ramps production of its 2nm process. This record revenue shows how demand for advanced semiconductors is feeding through to sales, while gains in manufacturing efficiency take longer to arrive.
September Revenue Near a Record, Quarterly Revenue Up 17.6%
TSMC's consolidated revenue for September 2026, announced on October 8, was NT$511.857 billion, up 54.6% from the same month a year earlier.
That is down 0.6% from August, the record month, but revenue stayed above NT$500 billion for a second straight month. What matters is not the slight dip from the prior month but that September largely held the high level reached in August.
This strong performance led to the record for the July–September quarter as a whole. The figures can be checked in TSMC's September revenue announcement and its attached report. 台積電
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| Monthly revenue (NT$ million) | |
|---|---|
| July | 467,580 |
| August | 514,806 |
| September | 511,857 |
By month, revenue was NT$467.58 billion in July, NT$514.806 billion in August and NT$511.857 billion in September.
The three-month total for July–September came to NT$1,494.243 billion, 17.6% above the NT$1,270.380 billion of April–June. The previous quarter was also strong, yet revenue grew substantially again from that level.
The sum of monthly revenue for July–September 2025 was NT$989.918 billion. Compared with that, this quarter's revenue is up 50.9%.
These figures were calculated from the 2026 monthly revenue table and the 2025 monthly revenue table. Note that they are sums of monthly reports and should be distinguished from the official quarterly financial results.
Cumulative revenue for January–September 2026 was NT$3,898.727 billion, up 41.1% from a year earlier.
That already exceeds the NT$3,809.054 billion TSMC booked for all of 2025, reached in just nine months. Because the periods differ, the two cannot be used to compare growth rates, but the rapid expansion of TSMC's business is clear.
Revenue About 2% Above the Top of Company Guidance
At its earnings announcement on July 16, TSMC guided third-quarter 2026 revenue of US$44.6 billion to US$45.8 billion.
That outlook was based on an assumed exchange rate of NT$32 to the US dollar, as stated in the second-quarter earnings release. TSMC
Converting the guidance into Taiwan dollars at the same rate makes it possible to compare how far actual revenue exceeded expectations.
| Item | Consolidated revenue (NT$) | Calculation |
|---|---|---|
| Low end of guidance | NT$1,427.2 billion | US$44.6B × 32 |
| High end of guidance | NT$1,465.6 billion | US$45.8B × 32 |
| July–September monthly total | NT$1,494.243 billion | July + Aug + Sept |
| Difference from high end | NT$28.643 billion | Monthly total − high end |
By this calculation, TSMC's third-quarter revenue exceeded the top of company guidance by about 1.95%.
The formula is as follows.
However, this comparison converts the US dollar guidance into Taiwan dollars using the exchange rate TSMC assumed in July. It does not represent the US dollar revenue that will be reported in the official quarterly results.
The 50.9% year-over-year increase and the roughly 2% beat against guidance also mean different things.
The year-over-year figure shows how much the business grew over a year. The gap versus guidance shows how far actual revenue exceeded the growth TSMC had expected in July.
Both point to strong results, but much of the roughly 51% growth had already been built into the company's outlook.
Revenue growth alone also does not reveal how much wafer shipments, selling prices and changes in product mix each contributed.
A 50.9% rise in Taiwan dollar revenue does not mean production volume rose by the same proportion. To understand the breakdown of growth, one needs to look at revenue by application and by process technology.
HPC at 66% of Revenue, 2nm Still Ramping
In the second quarter of 2026, the segment driving TSMC's revenue was high-performance computing (HPC) chips.
According to the company's earnings presentation, HPC accounted for 66% of total revenue and rose 20% from the previous quarter.
Smartphones accounted for 22% of revenue and fell 4% quarter over quarter.
This mix shows that demand for high-performance computing, including data centers, is playing a major role in TSMC's growth.
However, not all HPC revenue is AI-related.
HPC includes products other than AI chips, so it would be inaccurate to read the 66% share as the proportion of AI-related revenue. It is also a second-quarter figure, and the same mix did not necessarily continue into the third quarter.
Strong demand for AI chips and the HPC share of revenue that TSMC discloses should be considered separately.
The breakdown by process technology is also worth noting.
In the second quarter, 2nm accounted for 3% of wafer revenue, 3nm for 30% and 5nm for 33%. Advanced processes including 7nm together reached 77%.
Note that revenue by application and revenue by process technology are measured against different bases.
The 66% for HPC is a share of total revenue, while the 77% for advanced processes is a share of wafer revenue. Multiplying them together therefore does not give the revenue from advanced AI chips.
The fact that 2nm was still only 3% of revenue is an important clue for thinking about future margins.
TSMC expected to rapidly expand 2nm production in the third quarter.
When launching a new process, a company must raise volume while improving equipment utilization and manufacturing yield. In that process, the costs of expanding capacity can push margins down.
In other words, there can be a gap between when a new manufacturing technology begins contributing to revenue and when it can be produced efficiently at volume.
On the demand outlook, Chairman and CEO C.C. Wei said at the July earnings call that the spread of AI agents would again raise the importance of data center CPUs.
AI systems need not only GPUs but also CPUs and dedicated accelerators. For TSMC, demand for manufacturing these varied chips could support future growth.
He also noted, however, that rising component prices and other factors could weigh on price-sensitive consumer markets.
Strong demand for advanced chips does not mean every segment of the semiconductor market is growing at the same pace.
Why the 2nm Ramp Pushes Down Gross Margin
In its July guidance for the third quarter of 2026, TSMC projected a gross margin of 65–67% and an operating margin of 56–58%.
Both are below the second-quarter actuals of 67.7% gross margin and 60.3% operating margin.
In other words, TSMC expected revenue to rise while margins declined from the previous quarter.
One of the main factors is the rapid ramp of the 2nm process.
CFO Wendell Huang explained at the second-quarter earnings call that the 2nm ramp would weigh on gross margin by about 3 to 4 percentage points.
That is not a forecast that overall gross margin would ultimately fall by 3 to 4 points.
TSMC expected strong demand for advanced processes, along with productivity gains and cost reductions, to partly offset the burden of the 2nm ramp.
As a result, the midpoint of third-quarter gross margin guidance was 66%, a decline of just 1.7 points from 67.7% in the second quarter.
It is important to distinguish between the drag on margin from the 2nm ramp and the final margin guidance that factors in other improvements.
Costs associated with starting up overseas fabs are another factor affecting TSMC's margins.
The company has also explained the impact of its overseas expansion on margins over the next several years, but that long-term effect cannot simply be added to the 2nm impact to forecast the third-quarter margin decline.
Care is also needed when looking at net income.
In the second quarter, about NT$63 billion was booked as a gain on the sale of Vanguard shares and a mark-to-market gain, boosting non-operating income. This contributed to a net profit margin of 55.6% that quarter.
Therefore, multiplying this quarter's revenue by the second-quarter net margin of 55.6% would not give a proper forecast of third-quarter net income.
To assess the profitability of the chip manufacturing business itself, one should focus mainly on gross and operating margins and consider separately how non-operating items affect net income.
How much of this large revenue increase translated into profit growth will become clear in the official earnings report scheduled for October 15.
Can Up to US$64 Billion in Capex Translate Into More Capacity?
In July, TSMC raised its 2026 capital expenditure plan from US$52–56 billion to US$60–64 billion.
Of this, 70–80% is planned for advanced process technologies.
The company also said it would allocate 10–20% of the total to advanced packaging, testing, photomask production and other areas. The entire amount in that category will not be spent on advanced packaging alone.
However, higher capital spending does not necessarily translate immediately into more production capacity.
Building a new fab and installing equipment takes a different amount of time to deliver more supply than converting equipment in an existing fab to expand capacity.
TSMC says that in Taiwan it is converting equipment for the 5nm process to the 3nm process, adjusting capacity across technology generations.
According to the company, developing a new manufacturing technology, securing capacity and starting volume production takes more than five years.
To meet current demand growth, therefore, how efficiently existing equipment is used matters as much as investment in new fabs.
TSMC also does not simply add up the demand forecasts its customers give it when deciding on capital spending.
CEO C.C. Wei said the company talks not only with customers who order chips directly but also with the cloud providers beyond them.
It checks the construction progress and locations of AI data centers and the readiness of server racks, among other things, to determine whether demand is backed by actual capital spending and usage plans.
Even if orders for AI chips are rising, shipped chips will not necessarily go into operation right away if data center preparations are delayed. In some cases, inventory could build up on the customer side.
TSMC checks on data center construction in order to judge carefully how much of its customers' bullish demand forecasts will materialize as actual chip demand.
TSMC's third-quarter 2026 earnings call is scheduled for 3 p.m. Japan time on October 15.
In assessing this record revenue, the key questions are how far the 2nm share of revenue has risen and whether the resulting hit to gross margin stayed within the company's guidance.
Also of interest is how much capacity TSMC has been able to add, including by converting 5nm equipment to 3nm.
Riding strong demand for advanced chips, TSMC has set a new record for quarterly revenue. But whether it can sustain such high growth depends not only on winning more orders but also on securing the capacity to fulfill that demand and keeping manufacturing costs in check.
This record revenue shows that demand for advanced semiconductors remains strong, while also highlighting the next challenge: whether TSMC can absorb the costs of the 2nm ramp and maintain its margins.