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      TSMC Reports Nearly 70% Profit Increase Amid Strong AI Demand

      Taiwan Semiconductor Manufacturing Company (TSMC) announced a significant increase in its third-quarter net profit, which rose nearly 70% to approximately NT$763 billion, surpassing analyst expectations. The surge in profit is attributed to the growing demand for chips used in artificial intelligence applications, with revenue reaching about $47 billion, exceeding the company's own guidance range. Despite these positive results, TSMC's shares experienced a decline as investors expressed concerns over margin guidance and the company's substantial capital expenditure plans.

      The gross margin for the quarter was reported at about 66%, a notable increase from the previous year but a decrease from the second quarter, primarily due to the early ramp-up of its 2-nanometre production technology. High-performance computing, which includes AI accelerators, constituted 68% of TSMC's revenue, up from 57% a year earlier, highlighting the company's pivot towards AI-driven markets. TSMC's Chief Executive C.C. Wei indicated that demand for AI chips remains robust and is likely to exceed previous long-term growth forecasts.

      For the fourth quarter, TSMC has projected revenue between $52 billion and $54 billion, with a gross margin expected to range from 65% to 67%. The company has also raised its full-year revenue growth outlook to approximately 44% in US dollar terms, an increase from earlier estimates. However, the anticipated heavy capital spending of $60 billion to $64 billion for 2026 and the potential impact of overseas factories on margins have contributed to a cautious market reaction, despite the overall positive outlook for the AI supply chain.

      © 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

      Source: KLEA News

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