TSMC Posts Record Q3 Profit, Raises Capex Outlook to Meet AI Chip Demand

Taiwan Semiconductor Manufacturing Co. (TSMC) reported on October 15 that its third-quarter net profit reached NT$763.1 billion, a 68.7% increase from a year earlier, marking the sixth consecutive quarter of record profits. Revenue came in at NT$1.49 trillion ($46.36 billion), beating the LSEG SmartEstimate consensus of NT$1.47 trillion. The operating margin stood at 58.7%, surpassing the upper end of the company's 58% guidance range, highlighting strong pricing power amid relentless global appetite for AI chips.

For the fourth quarter, TSMC guided revenue between $52.3 billion and $54.3 billion, representing a 14% sequential increase and a 58% jump from a year earlier at the midpoint. The company noted that demand for advanced nodes, including the ramp-up of its 2-nanometer process, continues to outpace production capacity. Sravan Kundojjala, an analyst at SemiAnalysis, stated that even after assessing customers' financing and deployment capabilities, TSMC confirms demand remains well above supply.

Regarding capital allocation, TSMC explicitly forecasted that capital expenditure from 2026 to 2028 would be "significantly higher" than in the previous three years. This signals a sustained commitment to supporting the AI infrastructure buildout. Additionally, the company announced that construction of its second fab in Arizona is complete, with equipment installation underway and mass production expected to begin in Q3 2027, slightly ahead of schedule. Reports also indicate TSMC is evaluating potential investments in Texas to further strengthen its U.S. manufacturing presence.