MediumV Technology Geopolitics & AI15 October 2026, Thursday
TSMC lifts its annual growth forecast to 44% but holds capex
On 15 October TSMC raised its 2026 US-dollar revenue growth forecast to 44%, from slightly above 40% in July. Third-quarter net profit hit a record NT$763.06bn, but the $60–64bn capital expenditure budget was left unchanged.
According to the Form 6-K filed with the SEC on 15 October, TSMC's third-quarter revenue was NT$1,494.24bn ($46.72bn) and net profit NT$763.06bn, with gross margin rising to 66.4%. According to Focus Taiwan, earnings per share of NT$29.43 compared with NT$17.44 a year earlier and NT$27.25 in the second quarter. The 2-nanometre process reached 8% of sales, up from 3% in the second quarter. The 3-nanometre node, with 33%, and 5-nanometre, with 28%, continue to carry revenue.
The company guided fourth-quarter revenue of $52.3–54.3bn and a gross margin of 65–67%. At the investor conference reported by The Register, CEO C.C. Wei said demand still exceeds supply. He added that TSMC has sent teams to inspect US data-centre construction and grid connections on site. According to Wei, 2-nanometre capacity will more than double in 2027, and the second 2-nanometre fab in Arizona will enter volume production in the third quarter of 2027. Cooperation with Musk's Terafab project in Texas remains at the discussion stage.
The record results did not protect the market. The Taiex fell 3.41% the same day to 46,969.87, its sixth-largest daily point loss on record. TSMC shares slipped 2.01% to close at NT$2,440. Foreign institutions were net sellers of NT$302.56bn on the main board.
Talay assessment
Bottom line
TSMC's upgrade puts a number on the fact that AI demand is not weakening on the supply side: the midpoint of fourth-quarter guidance implies 58% annual growth. Holding capex at $60–64bn, however, shows the company will add capacity only as it sees customers' power and data-centre readiness. The most likely path is that the gap between strong results and weak share pricing persists for several weeks.
Likely effects
- Taiwan exportsPositiveWeeks
Fourth-quarter revenue guidance of $52.3–54.3bn signals that Taiwan's exports, weighted towards information and communication products, will stay high through year-end.
- Equipment suppliersPositive1–6 months
Confirmation that 2026–2028 investment will exceed the previous three years, and that 2-nanometre capacity will double in 2027, supports demand for lithography and packaging equipment.
- Risk appetiteNegativeWeeks
The 3.41% drop in the Taiex despite record profit shows the market is pricing the US rate path and the funding cost of AI investment more than company results.
Possibilities, ranked
- 1Guidance holds, pricing diverges55%
Fourth-quarter revenue lands within the guided range, but Asian chip stocks stay volatile in line with US rate data.
Watch: TSMC's October revenue figure due around 10 November and net foreign flows on the Taiex
- 2Capex revised up30%
Cloud customers' power and construction timelines are confirmed, and TSMC raises capex markedly in its 2027 guidance in January.
Watch: The 2027 capex guidance at the January 2027 investor conference
- 3Demand slowdown15%
Cloud companies trim spending plans and TSMC falls to the bottom end of its fourth-quarter guidance.
Watch: Capex guidance in the major cloud companies' quarterly reports at the end of October
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- 2026 growth forecast▲ 44%
- Taiex▼ −3.41%
Sources
- Focus Taiwan (CNA) — TSMC raises 2026 sales growth forecast to 44%, leaves capex unchanged
- Focus Taiwan (CNA) — TSMC evaluating Texas production, cooperation with Terafab
- SEC — TSMC Form 6-K, 3Q26 earnings release with guidance
- The Register — TSMC sends scouts to check whether America's datacenters can deliver
- Focus Taiwan (CNA) — Taiex suffers 6th steepest daily point loss led by tech stocks