Taiwan Semiconductor Manufacturing Co. posted record third-quarter results on Thursday as insatiable demand for artificial intelligence chips kept its most advanced fabs running at full tilt, reporting revenue of NT$1.494 trillion ($46.72 billion), up 50.9 percent from a year earlier.
Net profit surged 68.7 percent to NT$763.06 billion (about $23.6 billion), the company's sixth consecutive record quarter and comfortably above the NT$746.3 billion analyst consensus compiled by LSEG.
Revenue also beat TSMC's own guidance of $44.6 billion to $45.8 billion. Earnings per share came in at NT$29.43, or $4.60 per American depositary receipt.
Margins stayed elite: gross margin of 66.4 percent, operating margin of 58.7 percent, and net margin of 51.1 percent — though gross margin slipped from 67.7 percent in the second quarter as the costly ramp of 2-nanometer production diluted profitability.
AI fills the fabs
High-performance computing — the bucket that holds AI accelerators and data-center processors — supplied 68 percent of third-quarter revenue, up from 57 percent a year earlier, while smartphones contributed 21 percent.
The 3-nanometer process alone accounted for a third of wafer revenue, with 5-nanometer at 28 percent and the brand-new 2-nanometer node already at 8 percent, up from 3 percent a quarter earlier.
Chief financial officer Wendell Huang credited "strong demand for our leading-edge process technologies," and management described demand for leading-edge capacity as stronger than available supply — a signal the AI buildout still has runway.
The foundry's customers include Nvidia, whose AI accelerators are built on TSMC's advanced nodes.
Records amid the rout
The blowout landed on one of the ugliest market days of the year: TSMC's Taipei shares closed 2 percent lower before the release as Taiwan's benchmark slid about 3.4 percent, caught in the same AI-selloff-and-rate-fear wave that crashed the Kospi and Nikkei earlier on Thursday.
Even the company minting money from AI could not escape the market's mood.
Looking ahead, TSMC guided fourth-quarter revenue to $52.3–54.3 billion — about 14 percent sequential growth at the midpoint — with gross margin of 65 to 67 percent and operating margin of 56.5 to 58.5 percent. It reaffirmed its 2026 capital budget of $60–64 billion and projected full-year revenue growth of about 44 percent in US-dollar terms.
The manufacturing test
The results are the clearest proof yet that AI demand has moved from forecasts and spending announcements into actual cash flow.
TSMC earns when wafers ship — it is one of the earliest beneficiaries of the investment cycle, but also its critical test: if customers cannot turn all that compute into returns, the foundry's order book will be the first to show it.
For now, though, the verdict from Hsinchu is unambiguous: the AI chip boom is not just a stock-market story. It is pouring record profits into the company that physically builds it.
By Hamza Faisal
