Taiwan Semiconductor Manufacturing Co. announced financial results for the third quarter that exceeded analyst expectations, with the company achieving its sixth consecutive quarter of record net profit. The chipmaker’s results were primarily driven by global demand for artificial intelligence semiconductors, which continues to grow at a rapid pace.
TSMC posted a net profit surge of 68.7% compared to the same period a year earlier. The company’s operating margin for the quarter reached 58.7%, surpassing the upper end of its previous guidance range of 58%. Looking ahead, TSMC provided fourth-quarter revenue guidance between $52.3 billion and $54.3 billion, representing a 14% increase from the prior quarter and a 58% year-over-year increase at the midpoint of the range.
The company indicated that capital expenditures from 2026 through 2028 would be significantly higher than spending in the previous three-year period, reflecting confidence in sustained demand growth. Advanced chipmaking technologies, including 7-nanometer and smaller processes, accounted for 79% of total wafer revenue. Within this category, 3-nanometer chips represented the largest revenue contributor at 33%, followed by 5-nanometer and 7-nanometer technologies. By customer segment, high-performance computing represented 68% of revenue, while smartphones comprised 21% and automotive emerged as the fastest-growing segment with quarter-over-quarter growth of 23%.
Free cash flow increased substantially to NT$476.56 billion from NT$139.38 billion in the comparable prior-year quarter. TSMC’s board approved a NT$7.00 cash dividend. The company reported progress on its U.S. expansion, having completed construction of its second Arizona facility, with mass production anticipated to commence in the third quarter of 2027. TSMC is also reportedly evaluating potential additional investments in Texas as part of its broader effort to strengthen manufacturing capacity in the United States.
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