TSMC Raises 2026 Revenue Growth Outlook to About 44%

Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE: TSM) reported third-quarter results above expectations on Thursday, with demand for AI, smartphone and high-performance computing chips driving revenue growth and prompting faster capacity expansion. C.

Wei said the company’s profitability has “no ceiling,” while noting that substantial gains will take time. He voiced confidence in long-term earnings prospects as AI demand supports capacity growth, but said higher capital spending and the costs of expanding advanced chip production remain important considerations. 2% sequentially and above the upper end of its guidance. 4%, mainly reflecting the initial ramp-up of 2-nanometer technology.

Technologies at 7 nanometers and below accounted for 79% of wafer revenue. High-performance computing revenue rose 22% sequentially and represented 68% of total revenue; automotive revenue increased 23%. 3 billion, representing about 14% sequential growth at the midpoint. Wei described AI demand as “extremely robust” and said the company has seen no signs of a slowdown.

S. dollar terms. Wei said AI demand is broadening beyond accelerators to include CPUs and networking chips. Greater adoption of open-source AI models could also lift demand for advanced silicon.

Taiwan Semiconductor maintained its 2026 capital-spending outlook of $60 billion to $64 billion. It expects investment from 2026 through 2028 to significantly exceed spending over the previous three years. The company is building 13 advanced fabs and packaging facilities in Taiwan, along with another five to six overseas. The company expects its second Arizona fab to start production in the third quarter of 2027, slightly ahead of schedule, and is evaluating further expansion in Texas.

Wei said demand continues to exceed supply and that Taiwan Semiconductor is “working very hard to narrow GlobalFoundries Deal Targets Back-End Shortage Taiwan Semiconductor also disclosed a back-end supply agreement with GlobalFoundries Inc. (NASDAQ: GFS). Wei said a shortage of back-end capacity led Taiwan Semiconductor to work with GlobalFoundries to secure sufficient manufacturing capacity for customers. “Our number one priority is to help our customer to be successful in their market,” Wei said.

Costs and Overseas Expansion Pressure Margins Taiwan Semiconductor expects overseas fabs to reduce gross margin by roughly 3—4 percentage points in the later part of its five-year expansion period. Higher equipment, material and labor costs remain challenges. Management expects scale, productivity improvements and capacity optimization to offset some of the pressure. Wei also rejected concerns that rivals’ earlier adoption of High-NA technology could weaken Taiwan Semiconductor’s competitive position, saying the company remains confident in its technology leadership.

Taiwan Semiconductor Plans Wafer Price Increases The chipmaker reportedly plans to increase wafer foundry prices by 3% to 6% starting in January 2027, less than earlier reports that pointed to increases of 5% to 10%. Taiwan Semiconductor is reportedly planning steeper price increases for its most advanced nodes as capacity remains tight. The higher charges would increase customer fabrication costs and could create room for rivals Samsung Electronics Co. Ltd.

(OTC: SSNLF) and Intel Corp. (NASDAQ: INTC) to raise prices as well. Persistent shortages in 2nm, 3nm and mature-node capacity are also supporting Taiwan Semiconductor’s pricing power. 00 in premarket trading on Thursday, according to Pro data.