Taiwan Semiconductor Manufacturing Co. announced record net profit in the third quarter, marking its sixth straight quarter of record results. The company posted a 68.7% increase in net profit compared to the year-earlier period, driven by robust global demand for artificial intelligence semiconductors. Operating margin reached 58.7%, surpassing the upper end of the company’s guidance range of 58%, reflecting the pricing advantage the chipmaker maintains amid the AI expansion.
Looking ahead, TSMC provided fourth-quarter revenue guidance of $52.3 billion to $54.3 billion, representing a 14% sequential increase and a 58% year-over-year jump at the midpoint. The company indicated that advanced technologies—defined as 7-nanometer and more advanced processes—represented 79% of total wafer revenue, with 3-nanometer chips accounting for the largest revenue share at 33%. High-performance computing was the leading platform segment at 68% of revenue, while automotive emerged as the fastest-growing segment with 23% quarter-over-quarter growth.
TSMC announced plans for significantly elevated capital expenditure from 2026 through 2028 compared to the prior three years, reflecting confidence in sustained demand. The company expects fourth-quarter operations to benefit from continued strength in advanced chipmaking technologies, including ramp-up of its 2-nanometer process. Free cash flow surged to NT$476.56 billion in the third quarter from NT$139.38 billion in the year-earlier period. The board approved a NT$7.00 cash dividend for the second quarter.
The chipmaker is expanding its U.S. manufacturing operations, having completed construction of its second Arizona fabrication facility with mass production expected in the third quarter of 2027. TSMC also reportedly is evaluating a potential investment in Texas. Industry analysts noted that demand for AI semiconductors continues to exceed production capacity, with the company employing a selective approach to capacity expansion by assessing customers’ financing and supporting infrastructure needs to support AI system deployment.
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