Taiwan Semiconductor Manufacturing (NYSE:TSM) Issues Quarterly Earnings Results

Taiwan Semiconductor Manufacturing (NYSE:TSM) released its quarterly earnings data on Thursday. The semiconductor company reported $4.60 earnings per share (EPS) for the quarter, beating the consensus estimate of $4.45 by $0.15, Zacks reports. Taiwan Semiconductor Manufacturing had a return on equity of 39.25% and a net margin of 50.31%. The firm had revenue of $46.87 billion for the quarter, compared to analyst estimates of $45.67 billion. During the same quarter in the prior year, the company earned $2.92 earnings per share. The business’s revenue for the quarter was up 41.1% compared to the same quarter last year.

Here are the key takeaways from Taiwan Semiconductor Manufacturing’s conference call:

• Strong third-quarter performance: Revenue rose 17.6% sequentially to $46.7 billion, above guidance, driven by leading-edge demand; advanced technologies represented 79% of wafer revenue.
• TSMC forecast fourth-quarter revenue of $52.3 billion-$54.3 billion, implying approximately 58% year-over-year growth at the midpoint, and raised its 2026 revenue growth outlook to around 44% in U.S. dollar terms.
• Management described AI demand as extremely robust, with growing adoption of agentic AI, AI CPUs, accelerators, networking chips, and open-source models. TSMC believes demand remains well above available supply and expects AI-related growth could exceed its prior mid-to-high-50% CAGR outlook.
• TSMC is accelerating capacity expansion, maintaining 2026 capital expenditures of $60 billion-$64 billion and signaling significantly higher investment in 2026-2028. N2 capacity is expected to more than double in 2027, while additional N3 fabs are planned in Taiwan, the U.S., and Japan.
• Profitability faces pressure from the steep N2 ramp and higher-cost overseas fabs; gross margin fell to 66.4% in the third quarter and is guided to about 66% in the fourth quarter, with overseas-fab dilution expected to widen to 3%-4% in the coming years. Management also flagged weakness in consumer and price-sensitive markets due to rising component costs and macroeconomic uncertainty.

Taiwan Semiconductor Manufacturing Price Performance

Shares of NYSE TSM opened at $422.15 on Friday. The stock has a market cap of $2.19 trillion, a price-to-earnings ratio of 30.46, a PEG ratio of 0.89 and a beta of 1.37. The company has a debt-to-equity ratio of 0.14, a quick ratio of 2.25 and a current ratio of 2.46. Taiwan Semiconductor Manufacturing has a fifty-two week low of $266.82 and a fifty-two week high of $487.47. The firm’s 50-day simple moving average is $434.85 and its 200 day simple moving average is $417.14.

Taiwan Semiconductor Manufacturing Cuts Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Thursday, January 7th. Stockholders of record on Thursday, December 10th will be issued a dividend of $1.0854 per share. This is a decrease from Taiwan Semiconductor Manufacturing’s previous quarterly dividend of $1.1136. This represents a $4.34 dividend on an annualized basis and a dividend yield of 1.0%. The ex-dividend date is Thursday, December 10th. Taiwan Semiconductor Manufacturing’s dividend payout ratio is 24.96%.

More Taiwan Semiconductor Manufacturing News

Here are the key news stories impacting Taiwan Semiconductor Manufacturing this week:

• Positive Sentiment: TSMC reported record quarterly net income of approximately NT$763 billion, up 68.7% year over year, while revenue increased roughly 51%. Earnings and revenue exceeded consensus estimates, supported by strong demand for advanced AI and high-performance-computing chips. TSMC posts record profit for a sixth straight quarter, beating estimates on AI boom
• Positive Sentiment: Management issued fourth-quarter revenue guidance of $52.3 billion to $54.3 billion, well above the roughly $48.8 billion analyst consensus. TSMC’s CEO also said there was no visible slowdown in AI-related demand, and advanced technologies accounted for about 79% of wafer revenue. Taiwan Semiconductor Q3 Earnings & Revenues Top Estimates, Margins Up
• Positive Sentiment: Needham raised its price target from $530 to $560 and maintained a Buy rating, citing TSMC’s strong growth outlook. The company is also discussing potential additional U.S. capacity, including production linked to Elon Musk’s proposed “Terafab” complex. TSMC confirms talks with Elon Musk to join Terafab complex
• Neutral Sentiment: TSMC plans as much as $64 billion in capital expenditures this year to expand capacity for leading-edge chips. The spending supports long-term growth but raises questions about returns on investment and near-term free cash flow. Why TSMC’s $64 billion spending plan shouldn’t deter investors
• Negative Sentiment: The strong report failed to overcome a wider selloff in chip stocks. Investors are concerned that heavy AI infrastructure spending may be financed with debt, while rising interest rates, inflation and questions about the profitability of AI customers are weighing on the sector. These concerns prompted profit-taking despite TSMC’s earnings beat and raised guidance. Chip Stocks Tumble On AI Investment Worries

Insider Buying and Selling

In other news, VP Shyue-Shyh Lin bought 1,000 shares of the stock in a transaction dated Tuesday, July 21st. The stock was bought at an average price of $74.13 per share, for a total transaction of $74,130.00. Following the completion of the acquisition, the vice president directly owned 30,269 shares in the company, valued at approximately $2,243,840.97. This trade represents a 3.42% increase in their position. The purchase was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. Also, VP Lipen Yuan bought 350 shares of the company’s stock in a transaction on Tuesday, August 18th. The shares were purchased at an average cost of $73.58 per share, for a total transaction of $25,753.00. Following the transaction, the vice president owned 2,000 shares in the company, valued at approximately $147,160. This represents a 21.21% increase in their ownership of the stock. Additional details regarding this purchase are available in the official SEC disclosure. Over the last 90 days, insiders purchased 16,043 shares of company stock worth $1,185,746. 1.11% of the stock is owned by corporate insiders.

Wall Street Analyst Weigh In

Several brokerages recently commented on TSM. Susquehanna increased their price objective on shares of Taiwan Semiconductor Manufacturing from $575.00 to $600.00 and gave the company a “positive” rating in a research note on Thursday, July 16th. Bank of America raised their price objective on Taiwan Semiconductor Manufacturing from $490.00 to $590.00 and gave the company a “buy” rating in a report on Wednesday, June 24th. Weiss Ratings lowered Taiwan Semiconductor Manufacturing from a “buy (b-)” rating to a “hold (c+)” rating in a research report on Tuesday, October 6th. Wall Street Zen downgraded Taiwan Semiconductor Manufacturing from a “strong-buy” rating to a “buy” rating in a research report on Saturday, August 8th. Finally, Barclays reissued an “overweight” rating on shares of Taiwan Semiconductor Manufacturing in a research note on Friday. Three research analysts have rated the stock with a Strong Buy rating, eleven have assigned a Buy rating and two have given a Hold rating to the stock. Based on data from MarketBeat.com, the company presently has a consensus rating of “Buy” and an average price target of $528.22.

Taiwan Semiconductor Manufacturing Company Profile

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), commonly known as TSMC, is a Taiwan-based semiconductor manufacturer and the world’s largest dedicated semiconductor foundry. Founded in 1987 by Morris Chang, the company pioneered the pure-play foundry model, producing chips designed by other companies rather than selling products under its own semiconductor brand.

TSMC manufactures a broad range of integrated circuits, including advanced logic chips used in high-performance computing, smartphones, automotive systems, communications equipment, and consumer electronics.