TSMC posts a sixth straight record profit but turns cautious on 2027

TSMC made a record net profit of NT$763.1bn ($23.59bn) in the third quarter, up 69% on a year earlier. That beat the NT$746.3bn LSEG SmartEstimate, Reuters reported.

Revenue rose 51% to NT$1.49tn, or 41.2% to $46.72bn in US dollar terms, according to TSMC’s results. Its operating margin was 58.7%. High-performance computing made up 68% of revenue and smartphones 21%. Chips made at 3nm brought in 33% of wafer revenue. It was TSMC’s sixth straight quarter of record profit.

For the fourth quarter, TSMC expects revenue of $52.3bn to $54.3bn, against $33.73bn a year earlier. It now sees 2026 revenue growing about 44% in dollar terms, up from more than 40% last quarter. Chairman and chief executive C.C. Wei struck a note of caution for 2027.

“Looking ahead, we continue to observe consumer and price-sensitive end-markets segments are being challenged due to the impact of rising component prices and macroeconomic uncertainties. As such, we are being prudent in our business planning going into 2027.” C.C. Wei, TSMC chairman and chief executive, on the earnings call

TSMC also said demand still far exceeds its supply capacity, Reuters reported. It sees no sign of a slowdown in what it calls the AI mega trend.

Where the new capacity goes

TSMC said it will build another 3nm fab in Tainan, with production due in the first half of 2028, The Information reported. Wei said strong customer demand prompted the decision. TSMC’s second fab in Arizona has finished construction. Mass production there is due in the third quarter of 2027, ahead of schedule.

The company kept its 2026 capital spending forecast at $60bn to $64bn. Chief financial officer Wendell Huang said spending from 2026 to 2028 would be significantly higher than in the previous three years.

TSMC is sending its own teams to the US to check on data centre construction and power supply, Bloomberg reported. It is also weighing a Texas campus. Wei said any fab in a Terafab tie-up must be run by TSMC.

“We have no intention to leave food on the table for others, and we want to capture every piece of business possible.” C.C. Wei, to analysts on the earnings call

How the market took it

TSMC’s Taipei-listed shares closed down 2% before the results, in line with a broader tech sell-off. That came amid worries that more US Federal Reserve rate rises could hurt AI stocks, Reuters reported. They came a day after ASML said customers were already looking to place orders for 2029 and 2030.