TSMC Guides Q4 Revenue to $52.3-54.3B as 2nm Ramps
TSMC reported third-quarter revenue of NT$1,494.243 billion and said its 2nm process will enter mass production in the fourth quarter.
TSMC reported third-quarter revenue of 1,494.243 billion New Taiwan dollars and operating profit of 876.445 billion New Taiwan dollars, according to techm.kr. Revenue rose 17.6% quarter-on-quarter and 50.9% year-on-year, while operating profit rose 14.3% quarter-on-quarter and 75.0% year-on-year. In US dollars, quarterly revenue was 46.72 billion, up 16.2% quarter-on-quarter and 41.2% year-on-year.
The company guided fourth-quarter revenue to 52.3 to 54.3 billion US dollars, with gross margin of 65-67% and operating margin of 56.5-58.5%. Third-quarter gross margin was 66.4% and operating margin 58.7%. Wafer shipments were 447,600 12-inch equivalent wafers, up 3.2% quarter-on-quarter and 9.6% year-on-year.
2nm products accounted for 8% of third-quarter wafer revenue, up 5 percentage points quarter-on-quarter, one quarter after launch. 3nm was 33%, 5nm 28% and 7nm 10%; processes at 7nm and below made up 79% of total revenue. By platform, high-performance computing was 68% of revenue, smartphones 21%, IoT 4%, automotive 4% and digital consumer electronics 1%.
CEO C.C. Wei said 2nm will enter mass production in the fourth quarter and that 2nm capacity will more than double year-on-year in 2027. He said 1.4nm preparation is proceeding smoothly, with risk production next year and mass production the year after. A new 3nm fab in Taiwan will start mass production in the first half of 2027, the Arizona 3nm fab in the third quarter of 2027 and the Japan 3nm fab in 2028, he said.
CFO Wendell Huang said 2026 capital expenditure will stay at 60 to 64 billion US dollars. Third-quarter capital expenditure was 13.84 billion US dollars, bringing the year-to-date total to 40.64 billion. Wei said demand for AI accelerator chips excluding CPUs will grow at an average annual rate in the high 50% range from 2024 to 2029 and that there are no signs of a demand slowdown. He also indicated a flexible pricing policy, saying there may be price differences between Taiwan and US production.
Quick answers
What is TSMC's fourth-quarter revenue guidance?
TSMC guided fourth-quarter revenue to 52.3 to 54.3 billion US dollars, with gross margin of 65-67% and operating margin of 56.5-58.5%.
When does TSMC's 2nm process enter mass production?
CEO C.C. Wei said 2nm will enter mass production in the fourth quarter. 2nm capacity will more than double year-on-year in 2027, he said.
How much did TSMC spend on capital expenditure?
Third-quarter capital expenditure was 13.84 billion US dollars, bringing the year-to-date total to 40.64 billion. CFO Wendell Huang said 2026 capital expenditure will stay at 60 to 64 billion US dollars.