[News] TSMC Lifts 2026 Growth Forecast to 44%, Eyes Record 4Q Revenue of Up to US$54.3B, Up 14% QoQ

After posting new high net profit in the third quarter, TSMC management projects 4Q26 revenue to land between $52.3 billion and $54.3 billion, representing a year-over-year increase of approximately 58% and a sequential gain of around 14%.

Profitability, however, could face some pressure as its 2nm ramp accelerates. Based on an assumed exchange rate of NT$31.8 per U.S. dollar, TSMC forecasts a gross margin of 65%–67% and an operating margin of 56.5%–56.8%, with the rapid expansion of 2nm production weighing on margins.

Despite the near-term margin pressure, CEO C.C. Wei struck an upbeat tone on demand for leading-edge technologies, with TSMC now expecting full-year 2026 revenue to grow approximately 44% in U.S. dollar terms, up from its previous outlook of around 40%.

Looking further ahead, TSMC reiterated its 2026 capital expenditure guidance of US$60 billion–US$64 billion, signaling confidence in sustained growth fueled by AI, including emerging agentic AI applications. The company also reaffirmed plans to spend significantly more over 2026–2028 than in the preceding three years, underscoring its commitment to expanding capacity for long-term demand.

The strength of that demand was already evident in TSMC’s third-quarter results. Its 2nm ramp gained momentum, with the node’s share of wafer revenue climbing to 8% from just 3% in 2Q26. Meanwhile, 3nm accounted for 33%, followed by 5nm at 28% and 7nm at 10%. Together, advanced nodes (7nm and below) contributed 79% of total wafer revenue.

The growth was particularly pronounced in high-performance computing (HPC). Revenue from the platform surged 22% sequentially, lifting its share of TSMC’s third-quarter revenue to 68%. Smartphones followed at 21%, while automotive and IoT each accounted for 4%.

(Photo credit: TSMC)