TSMC Q3 Earnings: Revenue Beat Is Known, Margins Are the Test

The headline number is already out

Taiwan Semiconductor Manufacturing Co. will report third-quarter 2026 results on Thursday, October 15. The release and call are set for 2:00 p.m. Taiwan time, which is 2:00 a.m. Eastern. 12 The quarter covers July through September, and the company has been in a quiet period since October 5. 2

TSMC's habit of publishing monthly sales means the topline is mostly settled before the call. September revenue came in at NT$511.86 billion, about $16.03 billion. That was up 54.6% from a year earlier but slightly lower, by 0.6%, than August. 3 With September included, third-quarter revenue totaled roughly NT$1.49 trillion. 34 One analysis puts the exact figure at NT$1,494.24 billion, a 50.9% increase over the same quarter last year in local-currency terms. 4

Above guidance, with a currency caveat

Management had guided for third-quarter revenue of $44.6 billion to $45.8 billion. It also guided for gross margin of 65% to 67% and operating margin of 56% to 58%. 2

At the 32 Taiwan dollars per U.S. dollar that TSMC assumed in its forecast, the NT$1.49 trillion converts to about $46.7 billion. That clears the top of the range. 34 The forecast was set in dollars while monthly sales are reported in Taiwan dollars, so the beat depends on the exchange rate. Revenue stays above the high end as long as the U.S. dollar averaged less than about 32.6 Taiwan dollars over the quarter. 4 The margin of safety is real but not huge, so a strong-dollar quarter would narrow the gap.

Where Wall Street sits

Consensus estimates differ slightly by outlet, but they cluster together. One tally has analysts expecting earnings of $4.42 per share on revenue of about $45.37 billion. 1 Another cites EPS of $4.43 and revenue of $45.54 billion, and also mentions a $4.41-per-ADR figure in the same piece. 3 Year-ago comparisons were $2.85 in EPS and $33.08 billion in revenue. 3

The interesting gap is between consensus and what the monthly data already show. Both revenue estimates sit below the roughly $46.7 billion implied by reported sales. 134 Either some estimates were not updated after the September release, or analysts are applying a less favorable exchange rate. Either way, a topline "beat" on Thursday should surprise no one who has followed the monthly numbers.

For reference, TSMC's previous report showed EPS of $4.28 and revenue of $39.89 billion. Net margin was 50.31% and return on equity was 39.25%. 1 The company's New York-listed ADRs closed at $472.20 on October 7, the last U.S. session before the September sales release. 4

What actually matters Thursday

With revenue largely known, attention turns to three things.

Margins. Gross and operating margins against the 65–67% and 56–58% guidance will show whether rapid growth is translating into profit. 2

Fourth-quarter guidance. At least one analyst expects a richer product mix to lift Q4 sales 10% to 15% from Q3. 3 That pace would support TSMC's target of more than 40% revenue growth for 2026 over 2025. 3

AI demand commentary. This is arguably the most important of the three, and the rest of the chip sector sets a high bar.

Recent results from TSMC's customers and peers show how strong AI-driven demand has been:

• Nvidia reported fiscal Q2 revenue of $96.2 billion, with data-center sales of $89.0 billion, and guided to about $108 billion for the next quarter. 5
• Broadcom's AI semiconductor revenue rose 221% year over year to $16.7 billion, and it guided to roughly $21.7 billion in AI revenue for its fourth quarter. 5
• Micron posted record revenue of $54.2 billion with an 86.8% gross margin, and guided to $61.5 billion. 5

Those guidance figures point to further growth in AI silicon orders, and TSMC manufactures much of that silicon.

The read

TSMC goes into Thursday having already shown it beat its own revenue forecast. That shifts the risk to the forward outlook rather than the quarter just ended. My view is that the stock's reaction will depend less on Q3 and more on whether management confirms a double-digit sequential gain in Q4 and keeps margins near the top of their range. A soft dollar flattered the quarter. Customers' guidance suggests demand is not the constraint, so investors will be listening for anything about capacity, pricing, or currency that could slow the trajectory.