Taiwan Semiconductor Manufacturing Company Limited Q1 FY2026 Earnings Call

· Earnings call transcript and AI-powered summary

Financial Performance (Q1 2026)

  • Revenue reached USD 35.9 billion, up 6.4% sequentially and slightly above guidance.
  • Gross margin improved to 66.2%, up 3.9 percentage points from Q4 2025 due to better cost controls, higher utilization, and favorable FX.
  • Operating margin rose to 58.1%, up 4.1 percentage points from Q4 2025.
  • EPS was TWD 22.08; ROE reached 40.5%.
  • Advanced technologies (7nm and below) accounted for 74% of wafer revenue.
  • HPC platform revenue surged 20% QoQ to 61% of total; Smartphones declined 11% to 26%.
  • Cash and marketable securities totaled USD 106 billion; CapEx for Q1 was USD 11.1 billion.

Guidance for Q2 2026

  • Revenue projected at USD 39.0–40.2 billion (10% QoQ; 32% YoY at midpoint).
  • Expected gross margin: 65.5%–67.5%.
  • Expected operating margin: 56.5%–58.5%.
  • Q2 tax rate expected at 20% due to retained earnings accrual.
  • Full-year tax rate remains 17%–18%.

Key Strategic Messages

Profitability Outlook

  • Q1 gross margin exceeded January guidance by 120 basis points.
  • Q2 margins expected to improve slightly from Q1, driven by utilization and cost efficiency.
  • 2nm ramp in 2H 2026 expected to dilute full-year gross margin by 2–3%.
  • Overseas fabs to contribute 2–3% dilution in early ramp years, widening to 3–4% later.

Continue Reading

Unlock the full AI-powered summary with key highlights, financial performance, and analyst Q&A.

Upgrade to Professional
Jeff Su: Good afternoon, everyone, and welcome to TSMC's First Quarter 2026 Earnings Conference Call. This is Jeff Su, TSMC's Director of Investor Relations and your host for today. TSMC is hosting our earnings conference call via live audio webcast through the company's website at www.tsmc.com, where you can also download the earnings release materials. [Operator Instructions]. The format for today's event will be as follows: First, TSMC's Senior Vice President and CFO, Mr. Wendell Huang, will summarize our operations in the first quarter 2026, followed by our guidance for the second quarter 2026. Afterwards, Mr. Huang and TSMC's Chairman and CEO, Dr. C.C. Wei, will jointly provide the company's key messages. Then we will open the line for the Q&A session. As usual, I would like to remind everybody that today's discussions may contain forward-looking statements that are subject to significant risks and uncertainties, which could cause actual results to differ materially from those contained in the forward-looking statements. So please refer to the safe harbor notice that appears in our press release. And now I would like to turn the call over to TSMC's CFO, Mr. Wendell Huang, for the summary of operations and the current quarter guidance. Jen-Chau Huang: Thank you, Jeff. Good afternoon, everyone. Thank you for joining us today. My presentation will start with financial highlights for the first quarter 2026. After that, I will provide the guidance for the second quarter 2026.

Continue Reading

Unlock the full earnings call transcript with speaker labels and formatted dialogue.

Upgrade to Professional