AI Demand Extends TSMC's Record Earnings Streak

By Sherry Qin

Taiwan Semiconductor Manufacturing Co. posted another record profit as demand for AI infrastructure remained robust, shrugging off market concerns that global investment in the fast-growing sector is nearing its limit.

The world's largest contract chip maker said net profit surged 69% to 763.06 billion New Taiwan dollars, equivalent to US$23.71 billion. That topped analysts' expectation of NT$731.77 billion, according to a FactSet consensus estimate. Revenue was NT$1.494 trillion, rising by a better-than-expected 51% from a year earlier.

With six consecutive quarters of record earnings, TSMC's already twice-improved 2026 revenue growth outlook of "slightly above 40%" in dollar terms now looks conservative and due for another upgrade.

Earlier this week, Dutch equipment giant ASML, which counts TSMC as a key client, raised its annual forecasts for the third time as the race to build AI infrastructure fueled demand for its advanced semiconductor-making machines.

TSMC said Thursday that advanced technologies made up 79% of total wafer revenue for the three months ended September. The company's gross margin reached 66.4% last quarter, down slightly from 67.7% in the second quarter, as it ramped up its 2-nanometer production.

The stellar results come as Asia's most valuable company, a major advanced chip manufacturer for technology heavyweights such as Apple and Nvidia, has been expanding its global manufacturing footprint to secure future AI supply chains amid rising geopolitical tensions. It pledged an extra US$100 billion investment in Arizona in July, bringing its total U.S. commitment to US$265 billion.

TSMC's stock has climbed nearly 60% this year, broadly in line with the Taiex's performance, thanks to strong momentum in the first half. Shares have largely traded sideways since then, as an oil-driven inflation shock, elevated bond yields and concerns about massive AI investment have weighed on chip stocks broadly.

Still, TSMC continues to enjoy a wide and deepening moat. Increasingly, its competitive advantage is shifting from transistor density alone to manufacturing scale, yield reliability, and integrated technology capabilities spanning advanced nodes, packaging and system integration.

Sustained AI compute demand, rising agentic AI workloads, which add CPU demand on top of accelerators, as well as an emerging co-packaged optics-driven networking cycle will all continue to drive TSMC's revenue growth and next round of share-price gains, analysts said.

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

October 15, 2026 02:00 ET (06:00 GMT)