TSMC posted record Q1 2026 results with revenue of US$35.90 billion (NT$1,134.10 billion) and diluted EPS of NT$22.08 (US$3.49 per ADR), beating the LSEG consensus of NT$20.88. Net income surged 58.3% YoY to NT$572.48 billion. Despite the beat, TSM ADRs fell roughly 2.64% in after-hours/next-day trade as guidance concerns weighed.
About Taiwan Semiconductor Manufacturing Company
Taiwan Semiconductor Manufacturing Company (NYSE: TSM; TWSE: 2330), founded in 1987 and headquartered in Hsinchu, Taiwan, is the world’s largest dedicated pure-play semiconductor foundry. TSMC manufactures more than 90% of the world’s advanced logic integrated circuits used in AI servers, producing chips for clients including NVIDIA, Apple, AMD, and Broadcom.
The company’s market capitalization hit a record NT$54.45 trillion (approximately US$1.7 trillion) during April 2026, with shares trading near NT$2,030-2,095 on the Taiwan Stock Exchange. TSMC dominates advanced-node manufacturing at 3nm, 5nm, and 7nm processes, and is executing a US$165 billion “gigafab” expansion across six Arizona fabrication plants. The foundry delivered an annualized return on equity of 40.5% in Q1 2026, supported by high utilization of its advanced nodes. Annualized EPS of roughly NT$88 implies a trailing P/E near 23x at the current share price.
Top Financial Highlights
- Total revenue reached NT$1,134.10 billion (US$35.90 billion), increasing 35.1% year over year in NT terms and 40.6% in USD terms.
- Net income rose to NT$572.48 billion (US$18.2 billion), up 58.3%, marking a record performance.
- Diluted EPS stood at NT$22.08 (US$3.49 per ADR), also increasing 58.3% year over year.
- Gross margin reached a record 66.2%, exceeding the guided 63% to 65% range, while operating margin was 58.1% and net profit margin stood at 50.5%.
- Return on equity was 40.5% on an annualized basis, reflecting strong profitability and capital efficiency.
- Operating cash flow was approximately NT$699 billion, supporting continued investment and expansion.
- Capital expenditures for Q1 2026 were around US$11 billion, with total cash and marketable securities at approximately US$106 billion (NT$3.4 trillion).
- The HPC segment contributed 61% of total revenue, growing 20% sequentially, while the smartphone segment accounted for 26%, declining 11% sequentially.
- Advanced technologies remained a key driver, with 3nm contributing 25% of wafer revenue and nodes of 7nm and below accounting for 74%.
- Q2 2026 revenue guidance is in the range of US$39.0 billion to US$40.2 billion, implying approximately 10% sequential growth.
- Full-year 2026 capital expenditure is expected toward the upper end of the US$52 billion to US$56 billion range.
Beat or Miss?
| Metric | Reported | Estimated/Consensus | Difference/Analysis |
| Revenue (USD) | US$35.90B | ~US$35.5B | Beat by ~$0.4B; above guidance of $34.6-$35.8B |
| Diluted EPS (NT$) | NT$22.08 | NT$20.88 | Beat by 5.7% |
| EPS per ADR (US$) | $3.49 | $3.26 | Beat by ~7% |
| Gross Margin | 66.20% | Guidance 63.0-65.0% | Beat by 120 bps above high end |
| Operating Margin | 58.10% | N/A | Exceeded high end of guidance |
What Leadership Is Saying?
CEO and Chairman C.C. Wei on AI demand and strategy:
“Our conviction in the multi-year AI megatrend remains high.” “There are no shortcuts. The fundamental rules of the foundry game never change. It requires technology leadership, manufacturing excellence, and deep customer trust.”
CFO Wendell Huang on margins and financial positioning:
“With our strong technology leadership and differentiation, we are well positioned to capture the multi-year structure demand from the industry megatrends of 5G, AI, and high-performance computing (HPC).”
Huang also flagged that the Q1 gross-margin expansion was driven by cost improvements, higher utilization and a favorable FX rate, but warned of H2 2026 dilution from 2nm ramp and overseas fab expansion.
Historical Performance (YoY)
| Category | Q1 2026 | Q1 2025 | Change (%) |
| Revenue | NT$1,134.10B | NT$839.25B | 35.10% |
| Net Income | NT$572.48B | NT$361.56B | 58.30% |
| Diluted EPS | NT$22.08 | NT$13.94 | 58.30% |
| Revenue (USD) | US$35.90B | US$25.53B (implied) | 40.60% |
Competitors Performance (Q1 2026 vs Q1 2025)
| Company | Metric | Q1 2026 | Q1 2025 | Change (%) |
| TSMC | Revenue | US$35.90B | US$25.53B | 40.60% |
| TSMC | Net Income | NT$572.48B | NT$361.56B | 58.30% |
| Samsung Electronics | Revenue | KRW 133T (~US$100B) | KRW 79.14T | 68% |
| Samsung Electronics | Operating Profit | KRW 57.2T (~US$43B) | ~KRW 6.6T | ~+8x (+667%) |
| Intel | Revenue (guidance midpoint) | ~US$12.2B | US$12.72B | -4.10% |
| UMC | Revenue (Jan-Mar) | NT$61.04B | NT$57.86B (implied) | 5.50% |
How the Market Reacted?
Despite beating top- and bottom-line estimates and lifting both 2026 revenue and capex guidance, TSMC’s Taiwan-listed shares slipped roughly 2.64% following the print, closing near NT$2,030 as investors took profit after a 30.97% YTD rally. Media headlines framed the move as “TSMC Earnings, Guidance Top Estimates But Shares Fall,” reflecting concerns over margin dilution from the 2nm ramp, overseas fab costs, and Middle East-driven input-cost inflation.
Broader sentiment remained constructively bullish: analysts noted the Q1 print extended TSMC’s profit streak to eight consecutive quarters of double-digit growth and reinforced its role as the primary beneficiary of accelerating AI capex. CEO Wei’s upward revision of the 2024-2029 AI accelerator revenue CAGR to 54-56% (from 45%) underscored that the pullback was technical rather than fundamental.
