TSMC Guides Q4 Revenue to $52.3 Billion-$54.3 Billion as 2nm Reaches 8% of Wafer Sales

TSMC told investors on its Oct. 15 earnings call that fourth-quarter revenue should land between $52.3 billion and $54.3 billion. That follows a record third quarter with net income of NT$763.06 billion, up 68.7% from a year earlier.

Against the $33.73 billion TSMC booked in the fourth quarter of 2025, the range implies year-over-year growth of roughly 55% to 61%. The company also expects full-year 2026 revenue to rise about 44% in U.S. dollar terms.

The guidance

TSMC built its fourth-quarter forecast on an exchange rate of 31.8 New Taiwan dollars to the U.S. dollar. It expects a gross margin of 65% to 67% and an operating margin of 56.5% to 58.5%.

Chief Financial Officer Wendell Huang pointed to the new process node as a driver. "Moving into fourth quarter 2026, we expect our business to be supported by continued strong demand for our leading-edge process technologies, including the steep ramp-up of our 2-nanometer technology," Huang said.

Chairman and CEO C.C. Wei said he sees no sign of a slowdown in AI infrastructure demand, according to MarketWatch. TSMC cited growing use of agentic AI and open-source AI models as forces sustaining orders.

The 2nm ramp

The 2nm node went from 3% of wafer revenue in the second quarter to 8% in the third. That is a five-point jump in one quarter.

3nm rose from 30% to 33% and is now TSMC's largest node by sales. 5nm accounted for 28% and 7nm for 10%. Together, chips at 7nm and below made up 79% of wafer revenue, up from 77% in the second quarter and 74% a year earlier.

High-performance computing made up 68% of revenue, up from 66% a quarter earlier and 57% a year ago. That category covers data-center processors broadly, so it is not a pure measure of AI revenue. Smartphones were 21%.

The cost

The ramp carried a price. Gross margin was 66.4%, down 1.3 points from 67.7% in the second quarter, which TSMC attributed mainly to margin dilution from the early N2 ramp.

That still sat inside the 65% to 67% range the company guided in July. Operating margin of 58.7% beat the 56% to 58% guidance. Revenue of $46.72 billion cleared the top of the $44.6 billion to $45.8 billion forecast by about $920 million.

Net income beat the NT$746.34 billion consensus compiled by LSEG, according to CNBC. TSMC said the third-quarter figures have not yet been approved by its board.

Spending

TSMC reported third-quarter capital expenditures of $13.84 billion. Its 2026 capex guidance stands at $60 billion to $64 billion, and the company said spending across 2026 to 2028 will rise substantially from the prior three-year period.

That is the risk. Analyst Arslan Ali of TradingKey flagged the question as whether TSMC can add higher-end capacity "without margin erosion," and described the stock's near-term technical picture as bearish. TSM fell 3.40% to close at $430.00 on Oct. 14 during the AI-related sell-off, before the results came out.

If demand holds, the capacity extends TSMC's lead. If it softens, the company is carrying expensive capacity that takes longer to fill. Crypto Briefing made the same point in its analysis of the guidance.

What comes next

The 2nm ramp is the number to track. If its wafer-revenue share keeps climbing at anything near the second-to-third-quarter pace, it could become a major driver of 2027 results. TSMC's fourth-quarter report will show whether revenue lands at the top of the $52.3 billion to $54.3 billion range or simply clears the bottom.