TSMC’s Profit Soars 69%, but Can its Next Chip Breakthrough Justify the Valuation?

What happened: TSMC reported third-quarter net income and diluted EPS both up 68.7%, with revenue of NT$1.49 trillion, as its two-nanometer ramp weighed on margins. Key numbers: Revenue NT$1.49 trillion, up 50.9% year over year. Net profit NT$763.06 billion. Operating income up 75%. Gross margin 66.4%, down 1.3 points. Operating margin 58.7%, down 1.6 points. Why it matters: Management's Q4 outlook points to another sizeable sequential revenue increase, but guidance for gross margin of 65% to 67% and operating margin of 56.5% to 58.5% suggests high profitability may not keep expanding. Market: +3.0% today ($421.98), +57.3% YTD, 0.1x vol — as of 14:03 UTC Coverage: 3 outlets in 24h

TSMC reported third-quarter net income and diluted EPS both up 68.7%, with revenue of NT$1.49 trillion, as its two-nanometer ramp weighed on margins.

Management's Q4 outlook points to another sizeable sequential revenue increase, but guidance for gross margin of 65% to 67% and operating margin of 56.5% to 58.5% suggests high profitability may not keep expanding. Market: +3.0% today ($421.98), +57.3% YTD, 0.1x vol — as of 14:03 UTC