> ## Content Index > Fetch the complete content index at: https://www.sotkn.com/llms.txt > Use this file to discover other available public pages before exploring further. # TSMC 2nm hits 8% of wafer revenue. Demand still above supply - URL: https://www.sotkn.com/wire/tsmc-q3-2026-2nm-8-percent-demand-above-supply-wire/ - Published: 2026-10-15T23:39:20.000Z - Updated: 2026-10-15T23:39:20.000Z - Description: TSMC's 15 October print puts 2-nanometer at 8% of wafer revenue and HPC at 68% of sales. Gross margin 66.4% on the N2 ramp; Q4 guides $52.3–54.3 billion. Demand is still above supply. - Author: Sean - Tags: #desk-wire `WIRE` · `SEMICONDUCTORS` · `TAIWAN` · Data as at 15 Oct 2026 TSMC printed third-quarter results on **15 October 2026**: **NT$1,494.24 billion** of sales (**US$46.72 billion**), **2-nanometer at 8% of wafer revenue**, and gross margin **66.4%** on the N2 ramp. Fourth-quarter revenue is guided at **US$52.3 billion to US$54.3 billion**. On the [semiconductors layer](https://www.sotkn.com/stack/semiconductors/), the open question from the [September sales Wire](https://www.sotkn.com/wire/tsmc-september-2026-sales-q3-above-guidance-wire/) was the margin. That number is in. The stuck step did not move: chairman C.C. Wei said demand is still **above supply**. ## What happened | Print | Figure | Source, dated | | ------------------------------- | ----------------------------------------------------------------------------------- | --------------------------- | | Q3 net sales | **NT$1,494.24bn** / **US$46.72bn** · +17.6% q/q NT · +50.9% y/y NT · +16.2% q/q USD | TSMC, 15 Oct 2026 | | vs Q3 guidance | Above the high end (July range **US$44.6–45.8bn**) | CFO Wendell Huang, same day | | Gross / operating / net margin | **66.4%** / **58.7%** / **51.1%** | TSMC | | Diluted EPS | **NT$29.43** (US$4.60 per ADR) · ROE **45.5%** | TSMC | | 2nm / 3nm / 5nm / 7nm wafer mix | **8% / 33% / 28% / 10%** · advanced (7nm and below) **79%** | TSMC | | HPC share of net revenue | **68%**, **+22%** q/q · smartphone **21%**, +10% | TSMC | | 12-inch-equiv. wafer shipments | **4,476 kpcs**, **+3.2%** q/q | TSMC management report | | Q3 capex / YTD | **US$13.84bn** / **US$40.64bn** | TSMC | | Cash and marketable securities | **NT$4,016.98bn** (**US$126bn**) · FCF **NT$476.56bn** | TSMC | | Q4 guidance | Revenue **US$52.3–54.3bn** · GM **65–67%** · OM **56.5–58.5%** at **31.8** NT$/US$ | TSMC | | FY 2026 USD growth | **Around 44%** | Wei, same call | | 2026 capex budget | Reiterated **US$60–64bn** | Huang | Huang said the **130 basis-point** sequential drop in gross margin, to 66.4%, was **primarily the initial 2nm ramp**. That print sits in the **65–67%** band TSMC gave in July. Inventory days fell **5**, to **82**, "primarily due to the increase in wafer shipment." ## Why cash cares The [8 October sales note](https://www.sotkn.com/wire/tsmc-september-2026-sales-q3-above-guidance-wire/) already had the quarter above July's US$ range. What 15 October adds is **how much of that TSMC keeps**, and **what the mix is**. It keeps **66.4 cents** of gross profit per dollar of sales — less than the second quarter (**67.7%**) because N2 is expensive to ramp, more than a year earlier (**59.5%**). Our arithmetic, not a TSMC figure. Wafer shipments rose **3.2%**. NT-dollar sales rose **17.6%**. Revenue per 12-inch-equivalent wafer is about **NT$333,800** this quarter against about **NT$293,000** in the second (**+14%**). The extra money is mix, not more wafers on the dock. 2nm's share of wafer revenue went from **3%** to **8%** in one quarter; 3nm from **30%** to **33%**. Five-nanometer gave up five points. That is the N2 clock on the cover: the new node is now large enough to move the average selling price **and** the margin. Q4 is the steep part. Midpoint of the revenue guide is **US$53.3 billion**: **+14%** sequential and **+58%** year-on-year, as Huang printed. Gross margin at the midpoint is **66%**, another **40 basis points** down, from the steep N2 ramp and from overseas fabs. Overseas-fab dilution, he now says, is running **closer to 2%**, and will **widen to 3–4%** in the latter part of the five-year overseas build. The cash still prints. The mix is what binds the margin. Capex year-to-date is **US$40.64 billion**. Against **US$60–64 billion** for the year, that leaves about **US$19–23 billion** for the fourth quarter — our arithmetic. Huang said 2026–2028 capex will be "significantly higher" than the past three years, and that tool-price inflation is "real." ## What wafer mix actually is A foundry is not paid by the wafer-count headline. It is paid by **which node** that wafer is, and **which platform** the die sits in. See [what TSMC does](https://www.sotkn.com/explained/what-does-tsmc-do/) and [EUV lithography, explained](https://www.sotkn.com/explained/euv-lithography-explained/). N2 is an EUV-heavy node. It entered high-volume manufacturing in the **fourth quarter of 2025**, is ramping in **Hsinchu and Kaohsiung**, and Wei said **N2-family annual capacity should more than double in 2027**. A14 is on track for **risk production in 2027** and **volume in 2028**, and he expects it to be a **bigger node than N2**. HPC is **68%** of net revenue. Smartphone is **21%**. North America is **79%** of sales. The die still needs a package. Wei said TSMC is in **production at 5× reticle size**, working on **9×** and **14×**, and that **CoWoS remains the number-one choice**. He also said there is "**a little bit shortage on the back end**," which is why the [GlobalFoundries interposer deal](https://www.sotkn.com/wire/globalfoundries-tsmc-2b-silicon-interposer-wire/) exists. Front-end mix printed today. Packaging is still a second clock. ## The second-order read **Who gets paid.** TSMC, on N2 and N3 wafers that now dominate the mix, and on CoWoS slots it still calls the customer's first choice. Toolmakers, on a **US$60–64 billion** 2026 budget that is not being cut. ASML stays on the scanner clock we [already wrote](https://www.sotkn.com/wire/asml-2027-2028-supply-short-of-chip-demand-wire/): Wei's High-NA plan is still **2030**, with a **12-inch photomask by 2031**. **Who pays.** Customers in the North America book. They pay more per wafer as the mix walks from 5nm toward 3nm and 2nm, and they pay for the package. Wei said pricing is "strategic" and **US production will be priced differently** from Taiwan. **Who waits.** Anyone who needed TSMC to say the gap had closed. Wei: demand is "extremely robust," there is "no sign of slowdown," the AI-accelerator CAGR previously guided at **mid-to-high 50s from 2024 to 2029** "probably will be higher," and **demand is still far above what TSMC can supply**. He will not let customers **sublet or auction** slots. **Upstream.** EUV scanners and process tools. The [ASML 2027–2028 supply print](https://www.sotkn.com/wire/asml-2027-2028-supply-short-of-chip-demand-wire/) is that queue. [Siemens's mask-compute print](https://www.sotkn.com/wire/siemens-nvidia-culitho-high-na-mask-compute-weeks-to-days-wire/) sits on the later High-NA clock. **Downstream.** Finished accelerators, then halls. TSMC now sends its own people to check **US data-centre build-out and power**. Wei: "**so far so good**." Power has not, on his print, cut the customer forecast. Consumer end markets are "challenged." Leading-edge is not. **Stuck step.** Leading-edge wafer supply versus assessed demand — with **N2 mix** moving the margin this quarter, and **CoWoS-class packaging** still short on the back end. Two clocks. Today's print pays TSMC on the first. It does not clear the second. ## Two cautions **8% is wafer revenue, not a dollar of HPC.** TSMC does not split 2nm dollars. Do not turn 8% of wafer mix into a named customer's cheque. HPC at 68% of **net** revenue is a different cut. Our per-wafer NT$ figures are arithmetic from sales and 12-inch-equivalent shipments, not an ASP TSMC printed. **Q4 is guidance, not a print.** **US$52.3–54.3 billion** and **65–67%** gross margin assume **31.8** NT$ to the dollar (the quarter just gone ran at **31.98**). Wei's **\~44%** full-year USD growth and "probably higher" AI CAGR are judgements. Texas / Terafab remains "**no solid conclusion**"; any extra US fab, he said, would be **TSMC-run**. That is not today's capacity. ## What would change the view - A cut in the **US$60–64 billion** 2026 capex, or a 2027 budget that does not step up. - Q4 gross margin **below 65%**, or a call that N2 dilution is worse than the steep-ramp line. - Wei saying demand and supply have **met**, or that power, HBM or packaging has reduced the customer forecast. - A named **CoWoS** or interposer volume date earlier than the [1H 2028 GF ramp](https://www.sotkn.com/wire/globalfoundries-tsmc-2b-silicon-interposer-wire/). - A printed **High-NA** pull-in before 2030. ## What to watch - **TSMC October sales**, 10 November 2026: whether the N2 mix keeps the sequential step-up inside the Q4 US$ range. - **2027 capex**, with the next quarterly call — Huang would not give it today. - **Arizona Fab 2** volume, guided **Q3 2027**, "slightly ahead"; Tainan 3nm **H1 2027**, extra Tainan 3nm **H1 2028**. - **N2-family capacity "more than double" in 2027** — a date check, not a 2026 wafer. - **Samsung full Q3**, 29 October 2026, and **hyperscaler prints** 21–29 October: whether their cash still funds the book TSMC is building for. *Read: [Semiconductors](https://www.sotkn.com/stack/semiconductors/), [EUV lithography, explained](https://www.sotkn.com/explained/euv-lithography-explained/).* --- **Get the Wire.** A free brief every day, here and in your inbox. **[Subscribe free →](https://www.sotkn.com/#/portal/signup)** Sources: [TSMC press release, 15 Oct 2026](https://pr.tsmc.com/english/news/3346?ref=sotkn.com). [TSMC 6-K exhibit, 15 Oct 2026](https://www.sec.gov/Archives/edgar/data/1046179/000104617926000726/a3q26e%5Fwithguidancexfinal.htm?ref=sotkn.com). [TSMC 3Q26 management report, 15 Oct 2026](https://investor.tsmc.com/english/encrypt/files/encrypt%5Ffile/reports/2026-10/f83780000ddc0c3b48e57a87eab6814c4ab35058/3Q26%20ManagementReport.pdf?ref=sotkn.com). [TSMC 3Q26 presentation, 15 Oct 2026](https://investor.tsmc.com/english/encrypt/files/encrypt%5Ffile/reports/2026-10/9f58506f6f114f91cefbf86820cc63297b39b130/3Q26%20Presentation%20%28E%29.pdf?ref=sotkn.com). TSMC 3Q26 earnings conference, 15 Oct 2026\. Prior Wires: [September sales](https://www.sotkn.com/wire/tsmc-september-2026-sales-q3-above-guidance-wire/), [ASML 2027–28](https://www.sotkn.com/wire/asml-2027-2028-supply-short-of-chip-demand-wire/), [Siemens + cuLitho](https://www.sotkn.com/wire/siemens-nvidia-culitho-high-na-mask-compute-weeks-to-days-wire/), [GF interposers](https://www.sotkn.com/wire/globalfoundries-tsmc-2b-silicon-interposer-wire/). Not investment advice.