Taiwan Semiconductor Manufacturing (TSM) shares opened NT$40 lower at NT$2,500 in Taipei on Tuesday, October 13, as the Asia chip sell-off spread. The NYSE-listed ADR had already fallen 1.98% to $444.35 on Monday.
The trigger was a DRAM claim from China’s CXMT, which knocked SK Hynix (SKHY) down about 9% in Seoul. TSMC doesn’t make DRAM.
TSMC’s Margins Are Still Climbing
TSMC’s gross margin rose from 57.83% in the September 2024 quarter to 67.72% in the June 2026 quarter, while quarterly revenue grew 67% to $39.92 billion. Third-quarter sales are already out at a record NT$1.49 trillion (US$46.71 billion), above the top of TSMC’s $44.6 billion to $45.8 billion guidance. In July, management also raised its 2026 growth forecast to slightly above 40% in US dollar terms.
On the Q2 2026 earnings call, CEO C.C. Wei said he was “really jealous about the memory companies” and their 86% gross margins. Those are the margins CXMT threatens. TSMC’s edge is in leading-edge logic, where Wei said it takes more than five years to develop a technology, prepare capacity and ramp it up.
What TSMC Has to Prove on October 15
TSMC guided third-quarter gross margin to 65% to 67%, down from 67.7%, because ramping its 2-nanometer process dilutes margins by 3 to 4 points. On Thursday, a gross margin at or above the 66% midpoint, despite the 2-nanometer drag, would suggest TSMC’s profitability is holding up while memory makers face fresh competitive pressure. It wouldn’t settle the broader worry about AI spending.
A miss would turn attention to its $60 billion to $64 billion capital budget, which TSMC raised in July just as investors are getting uneasy about AI financing.
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