New to this? Read it in simple words
- TSMC, in Taiwan, builds chips that other companies, such as Nvidia, design.
- From July to September, its profit rose 68.7%, to a record NT$763.1 billion.
- Chips for high-performance computing, including AI chips, brought in 68% of its sales.
- TSMC expects sales of $52.3 billion to $54.3 billion from October to December.
- Contract chipmaker
- A company that builds chips in its own factories for other companies, which design them.
- Gross margin
- The share of sales a company keeps after paying the direct costs of making its products.
- 2-nanometer process
- TSMC’s newest way of making chips, with smaller parts that let a chip do more with less power.
TSMC, based in Taiwan, is the world’s largest contract chipmaker: it builds chips that other companies design. On October 15, it reported its results for July to September.
The numbers
TSMC made a net profit of NT$763.1 billion, 68.7% more than a year earlier. Analysts had expected NT$746.3 billion, according to LSEG’s forecast. It is TSMC’s sixth record quarterly profit in a row, CNBC and Reuters report.
Sales reached NT$1.49 trillion, up 50.9% in Taiwan dollars. In US dollars, sales were $46.72 billion, up 41.2%. That was above TSMC’s own forecast of $44.6 billion to $45.8 billion.
TSMC’s own figures of October 15; the coming quarter is its own forecast.
Where the money came from
Chips for high-performance computing, a group that includes AI chips, brought in 68% of sales, up from 57% a year earlier. Chips for smartphones brought in 21%. Orders from big customers such as Nvidia drove the growth, Reuters reports.
The newest chips made up more of the business. Chips made with TSMC’s 2-nanometer process brought in 8% of its wafer sales, up from 3% in the quarter before. Chips made with its 3-nanometer process brought in 33%.
Demand for AI chips stays strong, driven by AI agents and open-source models, TSMC says, as CNBC reports.
What comes next, and what it costs
For October to December, TSMC expects sales of $52.3 billion to $54.3 billion. At the middle of that range, it would be about 58% more than a year earlier.
New factories are costly. TSMC’s gross margin, the share of sales left after production costs, fell to 66.4% from 67.7% in the quarter before. TSMC blames the early costs of its 2-nanometer process.
TSMC expects to spend “significantly higher” amounts on factories from 2026 to 2028 than in the three years before, CNBC reports. Its second factory in Arizona is built, and mass production should start in the third quarter of 2027.
Sources
Every fact in this story comes from the sources below. Open them to check our work.
- 1
- 2Research · October 15, 2026TSMC posts record profit for a sixth straight quarter, beating estimates on AI boom CNBC
- 3Research · October 15, 2026TSMC Third-Quarter Revenue Rises 17% From Prior Quarter as Margins Narrow Seoul Economic Daily (citing Reuters)
- 4Research · October 15, 2026TSMC Q3 profit surges to record high on AI demand; says considering Texas fab Investing.com (via Yahoo Finance)
The results come from TSMC’s own report, and the outlook for the coming quarter is its own forecast. Outlets turn the profit into US dollars at different rates, so we give it in Taiwan dollars.
TSMC’s profit jumped 68.7% to a sixth record quarter on AI chip demand, though costly new factories trimmed its margin. How we rate the mood