Taiwan Semiconductor Manufacturing Company Limited (TSM) Earnings
Taiwan Semiconductor Manufacturing Company Limited is expected to report next earnings on July 16, 2026 (in NaN days), with a consensus EPS estimate of $3.69. TSM has beaten EPS estimates in 11 of its last 12 reported quarters (average surprise +7.5% over the last four).
| Report date | EPS est | EPS actual | Surprise | Revenue | Rev. surprise |
|---|---|---|---|---|---|
| Apr 16, 2026 | $3.31 | $3.49 | +5.4% | $36.0B | +1.8% |
| Jan 15, 2026 | $2.90 | $3.09 | +6.6% | $33.1B | +0.4% |
| Nov 14, 2025 | $2.63 | $2.85 | +8.4% | $32.4B | +0.9% |
| Aug 14, 2025 | $2.38 | $2.61 | +9.7% | $31.8B | +5.1% |
| May 15, 2025 | $2.07 | $2.14 | +3.4% | $25.8B | +1.4% |
| Jan 16, 2025 | $2.20 | $2.19 | -0.5% | $26.4B | +0.5% |
| Nov 14, 2024 | $1.79 | $1.95 | +8.9% | $23.6B | +1.3% |
| Aug 14, 2024 | $1.41 | $1.47 | +4.3% | $20.7B | +1.6% |
| May 15, 2024 | $1.30 | $1.34 | +3.1% | $18.3B | +0.0% |
| Jan 18, 2024 | $1.38 | $1.46 | +5.8% | $19.8B | +0.6% |
| Nov 14, 2023 | $1.16 | $1.26 | +8.6% | $16.9B | -0.4% |
| Aug 14, 2023 | $1.07 | $1.13 | +5.6% | $15.5B | +0.2% |
Source: company filings + earnings calendar. For informational purposes only — not investment advice.
Earnings call summary
Q1 FY2026 · April 16, 2026
AI summary of management’s prepared remarks and analyst Q&A. For informational purposes only — not investment advice.
Management highlights
Key messages include: First quarter 2026 and second quarter 2026 profitability - first quarter gross margin increased by 390 basis points sequentially to 66.2% compared to fourth quarter, actual gross margin exceeded the high end of the range provided three months ago; second quarter gross margin guided to increase by 30 basis point to 66.5% at the midpoint. Second half of 2026 outlook - initial ramp up of two nanometer technology will start to dilute gross margin, expect 2% - 3% dilution for full year 2026; overseas expansion gross margin dilution forecast; impact of Middle East situation on chemicals and gases prices; leverage manufacturing excellence for wafer output and capacity optimization; M3 gross margin expected to cross over to corporate average in second half 2026. Materials and energy supply update - ESMC has enterprise risk management system; material supply has multi-source solutions and safety stock; energy supply secured through at least May. 2026 capital budget - expect 2026 capital budget to be towards the high end of $52 - $56 billion range to support customers' growth. Near term demand outlook - first quarter revenue of US dollar 35.9 billion, slightly above guidance, driven by strong demand for leading edge process technologies; second quarter 2026 expected to be supported by strong demand for leading edge process technologies; AI-related demand extremely robust. N2 capacity expansion plan - N2 has entered high-volume manufacturing in first quarter of 2025 with good yield. Global N3 Capacity Expansion Plan - stepping up CapEx investment to increase entry capacity, adding new 3nm FABs in Taiwan, Arizona, Japan; converting 5nm tools to support 3nm capacity; focusing on capacity optimization across nodes. Mature node strategies - focus on building high yield capacity for specialized technologies, plan to wind down FAB 2 and FAB 5. A14 status - A14W delivers performance and power benefit, technology development on track, volume production scheduled for 2028.
Guidance
Second quarter revenue expected to be between $39.0 billion and $40.2 billion, 10% sequential increase or 32% year-over-year increase at midpoint. Gross margin expected to be between 65.5% and 67.5%, operating margin between 56.5% and 58.5%. Second quarter tax rate around 20%, full year tax rate between 17 and 18%. Expect full year 2026 revenue to grow by above 30% in U.S. dollar terms. 2026 capital budget towards high end of $52 - $56 billion range.
Segment performance
Automotive decreased 7% and accounted for 4%, and DCE increased 28% to account for 1%. Cash and marketable securities ended the first quarter at 3.4 trillion NT (106 billion U.S. dollars). Current liabilities increased by 256 billion NT quarter over quarter, mainly due to 129 billion increase in accrued liabilities and others, and 82 billion increase in accounts payable. Accounts receivable turnover days was flat at 26 days. Days of inventory increased six days to 80 days. Generated about 699 billion NT in cash from operations, spent $351 billion in CAPEX, and distributed $130 billion for second quarter 2025 cash dividend. Cash balance increased $268 billion to $3 trillion at the end of the quarter. First quarter capital expenditures totaled $11.1 billion in U.S. dollar terms.
Risks & headwinds
Initial ramp up of two nanometer technology will dilute gross margin in second half of 2026 by 2% - 3% for full year. Overseas expansion gross margin dilution forecast for next several years. Impact of Middle East situation on chemicals and gases prices, but too early to quantify. Capacity tightness may be a factor.
Analyst Q&A
Q: About three nanometer, what are the applications driving strong business and gross margin outlook?
A: Applications are HPC AI. Expect N3 gross margin to reach and cross corporate gross margin level in second half of this year.
Q: Regarding CAPEX revised up, what gives incremental confidence?
A: Demand is very robust, especially from HPC and AI applications.
Q: With expanded three nanometer capacity plan and faster capex, how long supply constraint is likely to last?
A: Takes two to three years to build a new FAB, expect tight supply to continue.
Q: Perspective on Elon Musk's TerraFab initiative and winning back customer?
A: View Intel as formidable competitor, no shortcuts in foundry game, still confident in technology position and work hard to capture business.
Q: Strategy to address competition from larger radical size and e-meep?
A: Welcome competition, TSMC supplies large radical size packaging, working on co-pass and other technologies.
Q: Long-term K-PACE plan and capex guidance?
A: CAPEX in next few years will be significantly higher than past three years, work with suppliers for tools.
Q: Revenue growth vs capex growth and impact of memory price hike?
A: Revenue growth outpays capex growth, memory price hike impacts price-sensitive end market, but high-end smartphone continues to do better, 2026 full year outlook details in July.
Q: Margin structure and AI-related demand forecasting?
A: Revised long-term margin and ROE targets, continue to receive positive signal from customers regarding AI-related demand.
Q: TSMC's strategy in advanced packaging and working with OSAP partners?
A: Prioritize supporting customers, packaging capacity tight, work with offset partners.
Q: Definition of AI revenue and inclusion of CPU?
A: AI revenue definition excludes data center CPU currently, typically do not comment on specific customer and product, but work with customers for next generation products.