TSMC reports 41.2% revenue growth but sees margin pressure from 2nm ramp
Taiwan Semiconductor Manufacturing Company (TSMC) posted third-quarter earnings on October 15, with revenue of $46.72 billion—up 41.2% year-over-year—and earnings per ADR of $4.60, exceeding the $4.46 consensus estimate. Gross margin slipped 1.3 percentage points to 66.4% due to costs associated with 2nm production ramp-up, though the company guided full-year 2026 growth of about 44% in dollars.…
Key points
- TSMC’s Q3 revenue hit $46.72 billion, up 41.2% year-over-year, with EPS of $4.60 exceeding estimates
- Gross margin dropped 1.3 percentage points to 66.4% due to 2nm production costs, but full-year 2026 growth is guided at 44%
- Analysts set a $516.16 price target, citing TSMC’s outsized role in AI chip supply despite geopolitical and margin risks
The company expects AI demand to outpace supply, with C.C. Wei noting mid-to-high 50s CAGR growth for AI accelerators. TSMC plans to more than double N2 capacity in 2027 and begin A14 volume production in 2028. However, margin dilution from overseas fabs and geopolitical risks tied to Taiwan remain concerns. The 24/7 Wall St. price target for TSMC stands at $516.16, citing an 18x forward multiple on a sold-out supply chain. Analysts warn that stabilization of 2nm margins and AI spending trends will determine future performance.
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Forget Nvidia. Here’s the Company Behind the Chips
247wallst.com · 6 November 2026
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