TSM Shares Fall 1.8% Amid Chip Selloff Despite 69% Profit Growth

Taiwan Semiconductor Manufacturing Co. (TSMC) shares fell 1.8% on Oct. 15 as chip stocks sold off, despite strong quarterly results and guidance for another jump in fourth-quarter revenue.

TSMC's U.S.-listed shares closed at $422.25 at 4 p.m. ET (20:00 UTC), down $7.75 from the previous close of $430. The decline coincided with a broader retreat in semiconductor stocks as markets weighed a possible interest-rate hike and the cost of building out AI infrastructure.

The U.S. Consumer Price Index rose 3.7% in the 12 months through September, compared with 3.4% through August. Prices also increased 0.6% from August on a seasonally adjusted basis.

For the quarter ended Sept. 30, TSMC reported revenue of NT$1.49 trillion, up 50.9% in New Taiwan dollars. Revenue measured in U.S. dollars was $46.72 billion, an increase of 41.2%. Net income climbed 68.7% to NT$763.06 billion, and diluted EPS was $4.60 per ADR.

TSMC forecast fourth-quarter revenue of $52.3 billion to $54.3 billion, which would be 58% higher year over year at the midpoint.

Gross margin was 66.4% in the third quarter, down from 67.7% in the second. TSMC projected fourth-quarter gross margin of 65% to 67%, with a 66% midpoint. The company tied the expected dilution to the ramp-up of 2-nanometer production and overseas fabs.

High-performance computing, which includes AI-related demand, made up 68% of third-quarter revenue. TSMC kept its 2026 capital budget at $60 billion to $64 billion and expects spending from 2026 to 2028 to be significantly higher than in the prior three years.

Chairman and CEO C.C. Wei said demand for “our leading-edge technologies continues to be extremely robust.” TSMC also noted challenges for some consumer and price-sensitive markets from higher component prices and economic uncertainty, and said it was planning prudently for 2027.