# TSM earnings call intelligence

LOPJLB CallCard / temporal rollup · freemium · [stock page](https://www.lopjlb.com/stock/TSM) · [Earnings tab](https://www.lopjlb.com/stock/TSM?tab=earnings)

Updated: 2026-10-15T06:40:33

Quarters analyzed: 8

## Cross-quarter narrative

Across 8 calls for TSM, management tone moved from +0.60 (2024 Q3) to +0.60 (2026 Q2). Latest guidance stance: maintained. Latest desk line: TSMC Q2 2026 shows strong leading‑edge and AI demand, raises full‑year capex to $60‑64B, but warns 2 nm ramp will dilute margins and notes macro‑uncertainty.

## Latest CallCard · Q2

TSMC Q2 2026 shows strong leading‑edge and AI demand, raises full‑year capex to $60‑64B, but warns 2 nm ramp will dilute margins and notes macro‑uncertainty.

**Guidance:** maintained — Q3 revenue $44.6‑45.8B, gross margin 65‑67%, operating margin 56‑58% as disclosed by management.

**Tone:** mgmt 0.6 · Q&A pressure 0.4 · divergence 0.2

Prepared remarks highlight strong leading‑edge demand, AI megatrend confidence and raised capex, indicating optimism.

### Demand visibility

Strong demand for leading‑edge and AI, consumer segment challenged

Leading‑edge and AI demand robust; consumer and price‑sensitive segments face pressure from rising component prices and macro uncertainties.

### Margins / costs

Margin pressured by 2 nm ramp dilution, partially offset by cost improvements

2 nm ramp expected to dilute gross margin by 3‑4 percentage points; cost improvement efforts and productivity gains aim to offset some of the impact.

### Capital allocation

Capex $60‑64B, 70‑80% to advanced processes, 10% specialty, 10‑20% packaging/testing

Full‑year 2026 capex $60‑64 billion; 70‑80% allocated to advanced process technologies, ~10% to specialty, 10‑20% to advanced packaging, testing and mask making; $100 billion Arizona investment announced.

### Milestones

- **2nm technology ramp** [on_track]: Steep ramp expected to dilute gross margin by 3‑4 pts but supported by strong demand
- **A14 nanosheet technology** [on_track]: Device performance ~90%, tape‑out ahead of schedule, pre‑production 2027, volume 2028
- **N3 fab expansion** [on_track]: Three new 3 nm fabs in Taiwan, Arizona, Japan progressing
- **Arizona $100B investment** [new]: Build several 2 nm and below logical wafer fabs and advanced packaging
- **13 leading‑edge and advanced packaging fabs in Taiwan** [on_track]: Construction over next several years
- **Mature node capacity increase JASM Fab 1 Japan** [on_track]: Targeting CMOS image sensor applications
- **Mature node capacity increase ESMC Germany** [on_track]: Targeting automotive and industrial applications
- **Advanced packaging CapEx allocation** [on_track]: 10‑20% of total capex, flexible between front‑end and back‑end

### Fears / risks

- **Macroeconomic uncertainty**: Consumer and price‑sensitive segments challenged by rising component prices and macro uncertainties
- **Margin dilution**: Steep 2 nm ramp expected to cut gross margin by 3‑4 percentage points
- **Foreign exchange risk**: Uncontrolled FX rates may affect profitability
- **Capacity growth assumptions**: Analysts question whether 70% CAGR for 2 nm and 25% for N3/N5 remain valid
- **Advanced packaging cost transparency**: Investors seek clearer split of 10‑20% packaging CapEx
- **Mature node supply constraints**: Power management ICs and sensors in shortage despite weak consumer demand
- **Tool inflation**: Higher tool prices increase CapEx pressure
- **Potential bottlenecks in capacity expansion**: Management asserts no bottlenecks but acknowledges need for flexible allocation

### Key quotes

> “Based on the exchange rate assumption of $1 to TWD 32, gross margin is expected to be between 65% and 67%.”

> “AI related demand continues to be extremely robust. The AI megatrend continue to drive the need for more and more computation, which supports the robust demand for leading-edge silicon.”

> “We are stepping up our CapEx investment to increase our capacity to support our customers' future growth.”

## Quarter one-liners

- **2026 Q2:** TSMC Q2 2026 shows strong leading‑edge and AI demand, raises full‑year capex to $60‑64B, but warns 2 nm ramp will dilute margins and notes macro‑uncertainty.
- **2026 Q1:** TSMC reports Q1 2026 revenue of $35.9B, margin expansion to 66.2% and strong AI/HPC demand, while flagging future gross‑margin dilution from 2nm ramp‑up, overseas fab expansion and Middle‑East chemical price risks.
- **2025 Q4:** TSMC reports Q4 2025 revenue up 5.7% sequentially, margin expansion to 62.3%, strong AI and leading‑edge demand, and guides Q1 2026 revenue $34.6‑35.8B while flagging tariff, component price and FX risks.
- **2025 Q3:** TSMC posted Q3 revenue of $33.1bn, beat margin guidance, reaffirmed strong AI demand and a $40‑42bn 2025 CapEx, while flagging FX, tariff and China‑related uncertainties.
- **2025 Q2:** TSMC posted 11% sequential revenue growth and 60% YoY EPS rise, but warned margin pressure from a stronger NT dollar and overseas fab dilution, while reaffirming strong AI/HPC demand and maintaining its 2025 capital budget.
- **2025 Q1:** TSMC Q1 2025 revenue fell 3.4% sequentially amid smartphone seasonality but AI demand held up; margin pressured by an earthquake and overseas fab dilution, while management reaffirmed strong Q2 growth and expansive US, Japan and Europe capex plans.
- **2024 Q4:** TSMC Q4 revenue rose 14.3% sequentially to $90B for 2024 (+30% YoY); guided Q1 revenue $25-25.8B (-5.5% seq, +34.7% YoY); 2025 revenue growth near mid-20s%; AI accelerator revenue to double in 2025 with mid-40% 5-yr CAGR; CapEx $38-42B; overseas fab dilution 2-3% margin impact.
- **2024 Q3:** TSMC Q3 2024 revenue rose 12.8% YoY on strong smartphone and AI demand, margin beat expectations, raised Q4 gross margin guidance, and outlined continued capex for advanced nodes and overseas fab expansions.

## Theme arcs

- **Management tone** (stable): Δ mgmt=+0.00

## Fear persistence

- **ai demand sustainability** [recurring]: 2024 Q3, 2024 Q4, 2025 Q1
- **capex pacing** [resolved]: 2024 Q3
- **electricity price increase** [resolved]: 2024 Q3
- **cowos capacity constraints** [resolved]: 2024 Q3
- **semiconductor cycle peak** [resolved]: 2024 Q3
- **geopolitical/overseas fab costs** [resolved]: 2024 Q3
- **inventory buildup** [resolved]: 2024 Q3
- **tool conversion costs** [resolved]: 2024 Q3
- **overseas fab margin dilution** [resolved]: 2024 Q4
- **electricity cost inflation** [resolved]: 2024 Q4

## Guidance path

2024 Q3:raised → 2024 Q4:maintained → 2025 Q1:maintained → 2025 Q2:maintained → 2025 Q3:maintained → 2025 Q4:maintained → 2026 Q1:maintained → 2026 Q2:maintained

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