TSMC Q3 2026 slides: AI boom drives record revenue despite margin pressure

Taiwan Semiconductor Manufacturing Company (TSMC) reported strong third-quarter 2026 earnings, driven by soaring demand for artificial intelligence and high-performance computing chips. Despite beating revenue and earnings estimates, the stock fell as investors worried about margin pressure due to ramping up 2-nanometer production and building new overseas facilities.

TSMC's revenue reached $46.72 billion, a 16.2% sequential increase and 41.2% year-over-year growth, exceeding expectations. Earnings per share stood at NT$29.43, up 8% quarter-over-quarter and 68.7% year-over-year. Gross margin declined to 66.4%, while operating and net profit margins were 58.7% and 51.1%, respectively, both above guidance.

TSMC's revenue was heavily weighted toward advanced nodes, with 7-nanometer and below technologies accounting for 79% of wafer revenue. High-performance computing applications, including AI accelerators and data center processors, now dominate revenue, contributing 68% of the total and growing 22% sequentially. The company's balance sheet remains robust, with total assets of NT$10.05 trillion and significant cash reserves.