TSMC Profit Hits Record for Sixth Quarter on AI Chip Demand

Key takeaways

TSMC reported a sixth straight record quarterly profit of US$23.6 billion, up 68.7% year on year, as AI chip demand outstripped supply capacity.
It forecast Q4 revenue up to 61% higher and raised its 2026 outlook — but flagged “prudence” for 2027 on macro uncertainty.

Conceptual illustration of a glowing stylized semiconductor chip at the center of a circuit network — Illustration: WHAT TODAY?

Taiwan Semiconductor Manufacturing Co. reported a sixth consecutive quarter of record profit on Thursday, as the world’s largest contract chipmaker rode surging demand for artificial-intelligence chips to beat analyst expectations.

Net profit for the July-to-September quarter climbed 68.7% from a year earlier to NT$763.1 billion (about US$23.6 billion), topping the NT$746.3 billion consensus SmartEstimate compiled by LSEG from 16 analysts, Reuters reported. Revenue reached NT$1.49 trillion (about US$46.7 billion), also ahead of expectations, with growth of more than 50% year on year.

TSMC, a key supplier to Nvidia and Apple, attributed the performance to strong demand for its advanced chipmaking processes and its CoWoS advanced-packaging technology — the capacity that powers most of the world’s leading AI accelerators. The company manufactures more than 90% of the world’s most advanced chips, and its 2-nanometre technology already accounted for 8% of wafer revenue in the quarter.

The outlook was the biggest talking point. TSMC forecast fourth-quarter revenue of US$52.3 billion to US$54.3 billion — up to 61% higher than the US$33.73 billion it posted in the same period last year. It also raised its 2026 full-year revenue-growth outlook to about 44% in US-dollar terms, up from its previous forecast of more than 40%, while keeping planned capital spending at US$60 billion to US$64 billion.

Caution for 2027

Chief executive C.C. Wei said demand remained “extremely robust,” with the company seeing no sign of a slowdown in what it calls the AI mega trend. But he paired that confidence with a warning: TSMC is “being prudent in our business planning going into 2027,” citing macroeconomic uncertainties and the impact of rising component prices on price-sensitive consumer segments.

That note of caution lands at a sensitive moment. The results were released amid a broader sell-off in AI-linked stocks, after the US Federal Reserve signalled the possibility of further interest-rate hikes on Wednesday — a prospect that punishes rate-sensitive tech shares. TSMC’s own Taipei-listed shares closed down 2% ahead of the earnings release, and South Korean rivals Samsung Electronics and SK Hynix slid more than 10%. Dutch equipment giant ASML, whose tools make AI chips possible, offered an upbeat outlook of its own a day earlier.

Why it matters: fundamentals vs. fear

The AI investment boom has split the market into two camps: one betting on a bubble, the other on a genuine buildout. Earlier this week, the International Monetary Fund warned that an AI market correction and cyber threats could shake global finance. TSMC’s numbers hand the second camp its strongest evidence yet — orders far exceed the company’s supply capacity, pricing power is intact, and the raised guidance signals the infrastructure buildout is still accelerating.

With a market capitalisation near US$2 trillion — almost double that of Samsung Electronics — TSMC is now Asia’s most valuable company, and its earnings have become the closest thing the AI trade has to a reality check.

What’s next

Investors will watch whether TSMC’s “extremely robust” demand holds through the fourth quarter, when revenue is expected to jump as much as 61% year on year. The bigger question is whether the caution in its 2027 planning proves prescient: if consumer-segment weakness spreads, or if the Fed keeps rates higher for longer, the AI boom’s strongest supplier could find itself guiding down for the first time in years.