Taiwan Semiconductor Manufacturing Co. (TSMC) has reported another record quarter, its sixth in a row, as demand for artificial intelligence chips continues to outstrip supply. The world’s largest contract chipmaker said third-quarter net profit rose about 69% to roughly NT$763 billion (about US$23.6 billion), beating analysts’ estimates.
Q3 2026 highlights
- Net profit: ~NT$763 billion (~US$23.6 billion), up ~69% year on year
- Revenue: ~US$46.7 billion, up ~41% year on year
- Driver: advanced-node chips for AI accelerators and data centres
AI keeps the fabs full
TSMC manufactures the processors designed by Nvidia, AMD, Apple and many others, and its most advanced production lines — including the 3-nanometre and new 2-nanometre processes — are running at very high utilisation. Spending by cloud providers and AI developers on data-centre hardware has been the single biggest driver of growth, while smartphone demand received a boost from new flagship launches using 2nm chips.
US expansion plans
Alongside its results, TSMC said it is exploring further investment in Texas, adding to its large manufacturing footprint in Arizona. The company has been under pressure from Washington to localise more advanced production in the United States, and Taiwan is simultaneously moving to tighten controls on exports of advanced AI chips and servers to China as part of a trade agreement with the US.
TSMC’s results have become a real-time gauge of the AI boom: as long as its order books are full, the investment cycle is still running.
Why shares still slipped
Despite the record numbers, TSMC shares fell after the announcement. Investors had priced in strong results, and some are increasingly focused on risks: the sustainability of AI spending, higher costs of overseas factories, energy and supply-chain disruptions linked to the conflict in the Gulf, and geopolitical tensions in the Taiwan Strait. The IMF this week warned that a sharp correction in AI investment could shave up to 0.4% off global GDP by 2028.
What to watch
- Capital spending: how much TSMC commits to new capacity in 2027.
- Customer guidance: upcoming earnings from major AI chip designers.
- Export rules: details of Taiwan’s new controls on AI chips and servers.
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