TSMC (TSM) Stock: Slides 2.81% Despite 68.7% Profit Surge and 50.9% Revenue Growth

TLDR

• TSM stock slides 2.81% to $417.99 despite TSMC’s powerful quarterly earnings.
• TSMC’s quarterly profit jumps 68.7%, while revenue surges 50.9% year over year.
• Advanced chipmaking nodes account for 79% of wafer revenue, led by 3nm chips.
• TSMC projects Q4 revenue of 52.3B–54.3B as demand for leading-edge chips grows.
• TSMC’s 2nm chip process accounts for 8% of wafer sales during its early ramp-up.

Taiwan Semiconductor Manufacturing Company reported strong quarterly earnings, yet its U.S.-listed shares declined ahead of Thursday’s market opening. TSM stock fell 2.81% to $417.99 in pre-market trading, shedding $12.09 after an uneven early session. The decline came alongside a 68.7% profit surge and 50.9% annual revenue growth.

Taiwan Semiconductor Manufacturing Company Limited, TSM

TSMC Third-Quarter Earnings Show Sharp Annual Growth

The Taiwanese chipmaker recorded NT$1,494.24 billion in consolidated revenue for the quarter ending September 30, 2026. Net income reached NT$763.06 billion as demand for advanced manufacturing processes remained strong. Meanwhile, diluted earnings per share reached NT$29.43, equivalent to US$4.60 for each American depositary receipt unit.

Compared with the same period last year, revenue climbed 50.9%, while net income increased 68.7%. Diluted earnings per share also grew 68.7%, matching the increase in the company’s reported profit. On a sequential basis, revenue rose 17.6%, while net income advanced 8.0% from the second quarter.

TSMC reported third-quarter revenue of US$46.72 billion when measured in U.S. dollars. That figure marked 41.2% annual growth and a 16.2% increase from the previous quarter. Additionally, the company posted a 66.4% gross margin, 58.7% operating margin, and 51.1% net profit margin.

Advanced Chip Technologies Account for Most Wafer Revenue

TSMC’s advanced production processes generated most of its wafer revenue during the third quarter. Chips manufactured using 3-nanometer technology contributed 33%, while 5-nanometer processes added another 28%. Meanwhile, the newer 2-nanometer process accounted for 8% of total wafer revenue.

The company’s 7-nanometer technology generated 10% of wafer revenue during the reporting period. Together, processes measuring 7 nanometers or smaller represented 79% of total wafer revenue. This concentration reflected TSMC’s growing reliance on advanced nodes rather than older manufacturing technologies.

TSMC produces chips for other semiconductor companies instead of primarily selling its own branded processors. Its manufacturing services support products ranging from smartphones to data centers and artificial intelligence systems. Consequently, orders for advanced computing hardware play an important role in the company’s production mix.

TSMC Projects Higher Fourth-Quarter Revenue

TSMC expects fourth-quarter revenue between US52.3billionandUS54.3 billion, above its third-quarter dollar-denominated sales. The company based its margin forecasts on an assumed exchange rate of NT$31.8 per U.S. dollar. Management projects gross margins between 65% and 67% during the final quarter of 2026.

The chipmaker also expects its fourth-quarter operating margin to range between 56.5% and 58.5%. Finance chief Wendell Huang attributed the company’s third-quarter performance to strong demand for leading-edge manufacturing technology. He expects that demand to continue as TSMC accelerates production of its 2-nanometer chips.

Management’s outlook places advanced manufacturing processes at the center of the company’s year-end production plans. Its guidance also pairs higher sales expectations with gross and operating margins near third-quarter levels. TSM shares declined before regular U.S. trading despite the company’s strong financial results and higher revenue forecast.

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