TSMC Q3: $46.72B sales, 2nm at 8% of wafers

TSMC reported third-quarter 2026 revenue of US$46.72 billion and said demand for leading-edge wafers still exceeds what it can supply, so the second-order bind for AI accelerators stays at advanced process capacity and the packaging that sits beside it, not at the top-line print itself.

What happened?

• The print: On 15 October 2026 TSMC's earnings release said consolidated third-quarter revenue was NT$1,494.24 billion, or US$46.72 billion, up 50.9% year on year in NT dollars and 41.2% in US dollars. Net income was NT$763.06 billion; diluted EPS was NT$29.43 (US$4.60 per ADR). Gross margin was 66.4%, operating margin 58.7%, and net margin 51.1%.
• Versus its own guide: The US-dollar revenue print sat above the company's prior third-quarter guide of US$44.6 billion to US$45.8 billion. Sequentially, revenue rose 17.6% in NT dollars and 16.2% in US dollars from the second quarter.
• The node mix: 2-nanometer accounted for 8% of wafer revenue; 3-nanometer 33%; 5-nanometer 28%; 7-nanometer 10%. Advanced technologies, defined as 7-nanometer and more advanced, were 79% of wafer revenue. High-performance computing was 68% of revenue by platform, up 22% quarter on quarter.
• The outlook TSMC put on the tape: Fourth-quarter revenue is guided at US$52.3 billion to US$54.3 billion, with gross margin 65% to 67% and operating margin 56.5% to 58.5%, assuming NT$31.8 per US dollar. Full-year 2026 revenue growth is now expected at around 44% in US-dollar terms. The 2026 capital budget stays US$60 billion to US$64 billion.

Why does it matter?

The direct signal. The quarter confirms that leading-edge foundry demand is still converting into invoices. CFO Wendell Huang said third-quarter business was supported by strong demand for leading-edge process technologies, and that fourth-quarter business should be supported by the same, including a steep 2-nanometer ramp. Gross margin fell 1.3 points sequentially to 66.4%, which Huang attributed primarily to margin dilution from that 2-nanometer ramp — the cost of starting a new node, not a soft book.

The second-order signal: demand still above supply. On the call, Chairman and CEO C.C. Wei said TSMC now checks data-centre build-out and power supply in the United States as part of capacity planning, that feedback so far is "so far so good", and that after that check the company still judges demand higher than supply and is working to narrow the gap. That matters for every step that sits next to the wafer: HBM that must match the die, CoWoS and other advanced packaging that must finish the package, and the halls that must take power once the chip ships. A foundry that is still short of demand keeps the clock on those adjacent steps.

Our arithmetic on the guide.

• Midpoint of the fourth-quarter revenue guide is US$53.3 billion. That is about 14% above the US$46.72 billion third-quarter print and about 58% above the year-ago fourth quarter at the midpoint TSMC cited on the call.
• Advanced nodes at 79% of wafer revenue means nearly four of every five wafer dollars are already on 7-nanometer or finer. The 2-nanometer line alone at 8% is still early in the ramp and already large enough to dilute the company margin.
• CapEx reiterated at US$60 billion to US$64 billion for 2026, with 2026–2028 spending described as significantly higher than the prior three years, is the cash commitment that follows from that demand assessment — not a one-quarter spike.

What does it change?

Near term (into early 2027)

• Node mix, not just sales. The 2-nanometer share at 8% and the guided steep ramp into the fourth quarter mean margin headlines will stay noisy even while revenue climbs. Huang guided fourth-quarter gross margin down about 40 basis points at the midpoint, again citing 2-nanometer dilution plus overseas fabs, partly offset by cost improvement.
• Capacity levers stay on. Wei said N2 is in high-volume manufacturing with good yield at Hsinchu and Kaohsiung, that the N2 family annual capacity is expected to more than double in 2027, and that TSMC is adding 3-nanometer fabs in Tainan (first half 2027, plus another for first half 2028), converting 5-nanometer tools to 3-nanometer, and optimizing across N7, N5 and N3. The message is every lever that raises leading-edge output.
• Arizona fab 2 pulled in. Construction of the second Arizona fab is complete; tools are moving in. Volume production is now scheduled for the third quarter of 2027, slightly ahead of the prior schedule, on 3-nanometer. Overseas fab dilution is expected to widen toward 3% to 4% in the next few years as more US capacity ramps.

Longer term (2027–2028)

• Who gets paid first. Cash still clears at the foundry and at the packaging and memory steps that must match the die. Wei said CoWoS remains customers' number-one packaging choice; TSMC is in real-world production of 5x reticle-size packages and working toward 9x and 14x, while also working with partners such as GlobalFoundries on interposer supply so customers are not left short on the back end.
• Texas and Terafab stay talks. Wei said teams are evaluating expansion beyond Arizona, including Texas, and that TSMC is discussing possible use of a customer's planned "Terafab" capacity, with any fab still to be run by TSMC. No binding deal was announced. Treat that as optionality, not capacity.
• Power stays a planning input, not a cut. Wei said power supply is one factor in capacity planning and that US power checks so far look adequate; he did not say TSMC had cut customer forecasts for lack of power. The hall clock still sits next to the wafer clock, but this print does not move the hall step by itself.

What should we watch next?

• TSMC October 2026 monthly sales, 10 November 2026, 13:30 Taipei time. TSMC's financial calendar lists the October sales release then. It is the first public check on whether the fourth-quarter guide is tracking in the opening month.
• Samsung Electronics full third-quarter results, 29 October 2026. The memory side of the same AI stack; the split of the earlier profit guide between memory, foundry and devices matters for HBM next to TSMC's dies.
• SK hynix third-quarter results, 27 October 2026. Same stack step as Samsung on HBM supply into the packages TSMC finishes.
• Arizona fab 2 tool install progress into 2027. The call put volume production in the third quarter of 2027; any slip or further pull-in changes when US 3-nanometer wafers leave the dock.
• What would weaken the catalyst: a monthly sales print that implies the fourth quarter is tracking below the US$52.3–54.3 billion guide; explicit cuts to the US$60–64 billion CapEx band; or management saying US power or packaging checks have forced a lower demand assessment.

FAQ

Did TSMC beat its own guidance?
Yes on revenue. Third-quarter US-dollar revenue of US$46.72 billion was above the company's prior guide of US$44.6 billion to US$45.8 billion. Gross margin at 66.4% landed inside the guided 65% to 67% band.

Is 2-nanometer already a large share of sales?
It is early but material. TSMC said 2-nanometer was 8% of wafer revenue in the third quarter, with a steep ramp expected into the fourth. That ramp is also the main reason management gave for sequential gross-margin dilution.

Does this fix CoWoS or packaging shortages?
No. The release and call confirm wafer demand and CapEx; Wei said CoWoS is still customers' preferred advanced packaging and that TSMC is expanding reticle-size capability and partner capacity. Packaging remains a separate capacity clock beside the wafer.

Is there a new Texas or Terafab deal?
Not in this report. Wei said evaluation of sites outside Arizona, including Texas, and discussions about a customer's Terafab concept are under way, with any fab to be run by TSMC. No signed project was announced on the call.

Takeaway: The US$46.72 billion quarter and ~44% full-year growth call show AI foundry demand still clearing above supply; the bind to watch is leading-edge wafer and packaging capacity, with October monthly sales on 10 November as the next dated check.

Figures come from the dated sources listed under References below. Our own arithmetic is shown and labelled as ours. Where a wire service and the primary release differ, we use the TSMC release and say so.

Last reviewed: 15 Oct 2026 · Next review: after TSMC October monthly sales (10 Nov 2026) or any CapEx/guide revision
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References

1. TSMC, "TSMC Reports Third Quarter EPS of NT$29.43", 15 Oct 2026
2. TSMC Investor Relations, 2026 Q3 quarterly results page (guidance table), 15 Oct 2026
3. TSMC Q3 2026 earnings call transcript (via StockAnalysis / Quartr), 15 Oct 2026
4. TSMC Investor Relations, financial calendar (October 2026 monthly sales on 10 Nov 2026), checked 15 Oct 2026
5. CNBC, Jenny Lee, "TSMC posts record profit for a sixth straight quarter…", 15 Oct 2026
6. Samsung Global Newsroom, third-quarter 2026 earnings guidance notice (full results watch), 8 Oct 2026
7. Second Order Wire, "ASML says its 2027 and 2028 supply won't meet chip demand", 14 Oct 2026
8. Second Order Wire, "AEP to build $4B, 702 MW of fuel-cell data center power for Google", 14 Oct 2026
9. Second Order Wire, "AMD backs Fermi's 222 MW data center power lease in Texas", 13 Oct 2026