TSMC Beats Q3 Estimates with $23.6B Profit as AI Demand Offsets Market Selloff

Taiwan Semiconductor Manufacturing Co. reported third-quarter financial results today that topped analyst estimates, even as its shares fell 2% amid a broader retreat across artificial intelligence equities. The contract chipmaker posted $46.36 billion in quarterly revenue, surpassing Wall Street expectations of $45.4 billion. Net income climbed 68.7% year-over-year to $23.57 billion, beating projections by approximately $500 million.

The decline in TSMC's share price mirrored turbulence across the semiconductor supply chain, as reported by SiliconANGLE. Investors began selling AI-linked shares on Wednesday following a post on X regarding the debt load of AI cloud provider CoreWeave Inc. The selloff quickly spread to other specialized cloud operators and chipmakers: Samsung Electronics Co. and SK hynix Inc. each fell more than 8%, while Intel Corp. traded down as much as 6.6% during the session. Chip equities pared some losses after Nvidia Corp. Chief Executive Jensen Huang told Bloomberg that CoreWeave’s cost of capital is declining.

TSMC's earnings were anchored by sustained demand for high-performance computing, which encompasses graphics processing units produced for customers including Nvidia. The segment accounted for 68% of TSMC's $46.36 billion in third-quarter revenue. The foundry also recorded growth across non-AI business units, with automotive chip revenue increasing 22% year-over-year and smartphone orders rising 10%.

Advanced manufacturing nodes continue to generate the bulk of the foundry's sales. TSMC's 3-nanometer node accounted for 33% of revenue during the quarter. First introduced in 2022, the 3nm family was expanded last year with a data center variant and supplemented several months ago with a lower-cost mobile variant. Meanwhile, TSMC's 2-nanometer process, which entered production in the fourth quarter of 2025, generated 8% of quarterly revenue, up from 3% in the prior quarter.

Alongside its earnings release, TSMC stated that it has completed construction of its 3-nanometer Fab 2 facility in Arizona. The company is currently installing chip manufacturing equipment at the site, according to CNBC, with mass production scheduled to commence in the third quarter of 2027.

Fab 2 is part of TSMC's $265 billion manufacturing expansion in Arizona, which already includes an operational 4-nanometer fab. The company broke ground last year on a third plant slated to produce 2-nanometer and 1.6-nanometer chips, accompanied by an advanced packaging facility for interconnecting compute and memory dies. TSMC told investors it plans to significantly ramp up capital expenditures over the next two years to support ongoing node expansion and the development of its upcoming 1.6-nanometer A16 process.