TSM — Q1 2026 Earnings Preview
Taiwan Semiconductor Manufacturing Co. | Call: April 16, 2026 at 2:00 AM ET | Revenue pre-released April 14: $35.71B (top of guidance range) | ~$1.85T market cap | Preview date: April 14, 2026
Earnings Call
Apr 16
2:00 AM ET — 2 days away
Q1 Revenue (Known)
$35.71B
+39.9% YoY · Top of $34.6-35.8B range
Q1 EPS Consensus
$3.29–$3.40
Zacks $3.29 · MAE $3.40 · TBA Apr 16
Beat Rate (8 quarters)
100%
Avg beat +7.9% · Q4 2025 record +11.3%
Q1 2026 GM Guide
63–65%
Q4 2025 actual: 62.3% · N2 dilution embedded
FY2026 Revenue Guide
~+30%
USD growth · $153-160B consensus range
FY2026 CapEx Budget
$52–56B
+30% vs. FY2025 $40.9B · record spend
HPC Revenue Share
~51%
Q4 2025 · +111% vs. Q1 2024 in NTD
Investment Setup: Revenue is Known. The Call is About Margin, Q2 Guidance, and Tariff Commentary.
1. Q2 2026 Revenue Guidance (most important data point): Revenue pre-release removed the #1 uncertainty. The call is now entirely about forward guidance. A Q2 guide above $39B signals demand re-acceleration beyond consensus ~$38B. A guide below $36B signals tariff-driven demand destruction and would be a -8-12% event. Management has never guided below what they can deliver — structural conservatism in NTD terms.
2. FY2026 Reaffirmation vs. Hedging Language: If CC Wei reaffirms "~30% revenue growth in USD" unequivocally, the market reads that as tariff-proof demand. Any hedging language ("monitoring the situation," "subject to macro developments") will be interpreted as early capitulation. This single sentence is binary in market impact.
3. Gross Margin vs. 63-65% Guidance: The Q4 2025 GM beat (62.3% vs ~60% midpoint) was the single largest driver of the record +11.3% EPS beat. If Q1 2026 hits 65% (top of range), another outsized EPS beat follows. Every 100bps of GM = ~$0.10-0.12 EPS at current revenue run-rate. Watch N2 ramp dilution vs. N3 pricing power.
Guidance provided at Q4 2025 earnings call (January 15, 2026). Q1 2026 revenue pre-released April 14, 2026.
| Metric | Guide Low | Guide High | Guide Mid | Consensus | Actual / Status |
|---|---|---|---|---|---|
| Revenue (USD$B) | $34.6B | $35.8B | $35.2B | ~$35.2B | $35.71B ✓ BEAT |
| Gross Margin (%) | 63% | 65% | 64% | ~64% | TBA Apr 16 |
| Operating Margin (%) | 54% | 56% | 55% | ~55% | TBA Apr 16 |
| EPS ADR (diluted USD) | — | — | — | $3.29–$3.40 | TBA Apr 16 |
| Revenue YoY Growth | — | — | +37.9% | ~+37.9% | +39.9% ✓ |
Q2 2026 Guidance (Expected — April 16): Management will provide Q2 revenue and margin guidance. Consensus expects ~$38B revenue (+6% QoQ). A guide above $39B (+9% QoQ) would be a significant positive surprise.
| Q2 2026 Scenario | Sequential Growth | Q2 2026 Revenue | Market Read |
|---|---|---|---|
| Bear | +2% | ~$36.4B | Tariff demand destruction — stock -8 to -12% |
| In-Line | +5–6% | ~$37.5–37.8B | Stock flat to +3% |
| Bull | +8% | ~$38.6B | Re-acceleration signal — stock +5 to +8% |
| Strong Bull | +10%+ | $39B+ | Blowout demand; AI CAGR upgrade signal — +8 to +12% |
Revenue (USD$B) — Quarterly
| Quarter | Revenue | YoY % |
|---|---|---|
| Q1 2024 | 18.87 | — |
| Q2 2024 | 20.82 | — |
| Q3 2024 | 23.5 | — |
| Q4 2024 | 26.88 | — |
| Q1 2025 | 25.53 | +35.3% |
| Q2 2025 | 30.07 | +44.4% |
| Q3 2025 | 33.1 | +40.9% |
| Q4 2025 | 33.73 | +25.5% |
| Q1 2026 | $35.71B | +39.9% (pre-released) |
Revenue re-accelerated to +39.9% in Q1 2026 against a soft Q1 2025 base. The trend: +35.3%, +44.4%, +40.9%, +25.5% (base effect), then +39.9% — AI demand trajectory unbroken.
Margins — Gross & Operating (%)
| Quarter | Gross Margin | Operating Margin |
|---|---|---|
| Q1 2024 | 53.1% | 42.0% |
| Q2 2024 | 53.2% | 42.5% |
| Q3 2024 | 57.8% | 47.5% |
| Q4 2024 | 59.0% | 49.0% |
| Q1 2025 | 58.8% | 48.5% |
| Q2 2025 | 58.6% | 49.6% |
| Q3 2025 | 59.5% | 50.6% |
| Q4 2025 | 62.3% | 54.0% |
| Q1 2026E | 63–65% (guided) | 54–56% (guided) |
Gross margin expanded 920 bps from Q1 2024 to Q4 2025. Q4 2025 beat guidance top by ~130bps (62.3% vs ~61% high). N2 dilution of 2-3pp is embedded in 63-65% Q1 2026 guide.
EPS — ADR Diluted USD
| Quarter | EPS | YoY % |
|---|---|---|
| Q1 2024 | $1.38 | — |
| Q2 2024 | $1.48 | — |
| Q3 2024 | $1.94 | — |
| Q4 2024 | $2.24 | — |
| Q1 2025 | $2.12 | +53.6% |
| Q2 2025 | $2.47 | +66.9% |
| Q3 2025 | $2.92 | +50.5% |
| Q4 2025 | $3.14 | +40.2% |
| Q1 2026E | $3.29–$3.40 | +55–60% YoY est. |
FY2025 EPS: $10.65 ($2.12 + $2.47 + $2.92 + $3.14). FY2026 consensus: $12.80–13.40 (+20-26% YoY).
Platform Revenue — HPC vs. Smartphone (NTD Millions)
| Quarter | HPC (AI/DC) | Smartphone | Automotive | IoT |
|---|---|---|---|---|
| Q1 2024 | 274,773 | 225,032 | 32,137 | 35,321 |
| Q2 2024 | 351,393 | 222,543 | 33,748 | 37,346 |
| Q3 2024 | 389,309 | 257,496 | 35,672 | 50,255 |
| Q4 2024 | 461,416 | 300,059 | 37,767 | 42,594 |
| Q1 2025 | 493,223 | 233,611 | 43,028 | 38,723 |
| Q2 2025 | 561,155 | 249,960 | 43,029 | 44,298 |
| Q3 2025 | 558,592 | 296,746 | 50,586 | 53,250 |
| Q4 2025 | 579,960 | 330,500 | 50,023 | 54,775 |
HPC grew 111% from Q1 2024 (274,773M NTD) to Q4 2025 (579,960M NTD), representing ~51% of wafer revenue in Q4 2025. Management guides mid-to-high 50% CAGR for AI accelerator revenue through 2029.
Geography Mix — North America & China (%)
| Quarter | North America | China |
|---|---|---|
| Q1 2024 | 69% | 9% |
| Q2 2024 | 65% | 16% |
| Q3 2024 | 71% | 11% |
| Q4 2024 | 75% | 9% |
| Q1 2025 | 77% | 7% |
| Q2 2025 | 75% | 9% |
| Q3 2025 | 76% | 8% |
| Q4 2025 | 74% | 9% |
NA 74-77% reflects Apple, NVDA, AMD, Broadcom, Google concentration. China stable at 7-9% since Q4 2024.
Capital Expenditure (USD$B)
| Quarter | CapEx |
|---|---|
| Q1 2024 | $5.77 |
| Q2 2024 | $6.36 |
| Q3 2024 | $6.4 |
| Q4 2024 | $11.23 |
| Q1 2025 | $10.06 |
| Q2 2025 | $9.63 |
| Q3 2025 | $9.7 |
| Q4 2025 | $11.51 |
| FY2026 Budget | $52–56B (+30% YoY) |
FY2025 total CapEx ~$40.9B. FY2026 budget $52-56B is a record. Q4 back-loading typical. Watch Q1 2026 for front-loading signal.
Management Tone Trajectory: Consistently Accelerating Confidence
| Quarter | Tone | Key Message |
|---|---|---|
| Q1 2025 (Apr) | Cautiously Positive | AI demand strong but supply ramp cautious; N2 yields early-stage |
| Q2 2025 (Jul) | Positive | AI CAGR "mid-to-high 50%" through 2029; N3 demand exceeding supply |
| Q3 2025 (Oct) | Strongly Positive | N2 yields tracking ahead; AI share 19% and rising; "megatrend is real" |
| Q4 2025 (Jan) | Most Confident in Years | N2 in HVM; FY2026 +30% revenue; CapEx $52-56B; "unprecedented AI demand"; new $50B Arizona investment |
Bull / Bear Factor Analysis — Entering April 16
| Factor | Bull Read | Bear Read | Tilt |
|---|---|---|---|
| Revenue Pre-Release | $35.71B at top of range removes uncertainty | Already priced in; focus shifts to guide | BULL |
| N2 Node Ramp | First N2 revenue disclosure; yields ahead of plan | Dilutes GM 2-3pp in FY2026; ramp costs front-loaded | NEUTRAL |
| AI Demand Visibility | N3 100% booked through 2026; capacity through 2028 | Apple/NVDA order deferrals possible on tariff uncertainty | BULL |
| Tariff Environment | TSMC not directly tariffed; manufactures in Taiwan | Downstream customer demand at risk; semiconductor tariff risk longer-term | MILD BULL |
| Rare Earth Controls | Strategic reserves adequate near-term | Equipment maintenance risk on 12-24 month horizon | NEUTRAL |
| Beat Track Record | 100% beat rate over 8 quarters; avg +7.9% | Street has gradually raised consensus — bar is higher | BULL |
Scenario Matrix: April 16 Stock Reaction Framework
| Scenario | Q2 Rev Guide | GM | FY2026 | EPS Q1 | Stock |
|---|---|---|---|---|---|
| Strong Bull | >$39B | 65% | Raised to +35% | >$3.45 | +8 to +12% |
| Bull | $38–39B | 64–65% | Reaffirmed +30% | $3.35–3.45 | +3 to +7% |
| In-Line | $37–38B | 63–64% | Reaffirmed | $3.29–3.35 | -1 to +2% |
| Mild Miss | $36–37B | 62–63% | Hedged language | $3.15–3.29 | -4 to -7% |
| Bear | <$36B | <62% | Withdrawn / Hedged | <$3.15 | -10 to -15% |
| Catalyst | Timing | Consensus Expectation | Bull Case | Bear Case | Priority |
|---|---|---|---|---|---|
| Q2 2026 Revenue Guidance | April 16 | $37-39B (+5-9% QoQ) | $39-41B: re-acceleration signal | <$36B: tariff demand destruction | TIER 1 |
| FY2026 Guidance Reaffirmation | April 16 | ~+30% USD revenue — unequivocal language | Raised to +35% on AI acceleration | Hedged language ('monitoring') = capitulation signal | TIER 1 |
| Q1 2026 Gross Margin | April 16 | ~64% (midpoint of 63-65% guide) | 65%+ beats top of range (N3 pricing + utilization) | 62-63% (N2 ramp costs front-loaded) | TIER 2 |
| AI/HPC Revenue Share | April 16 | High-teens % maintained or upgraded | 20-22% of Q1 wafer revenue; full-year AI CAGR raised | HPC flat/down QoQ; no CAGR upgrade | TIER 2 |
| N2 Node Ramp Disclosure | April 16 | First N2 commercial volume; qualitative update | 3-5%+ of Q1 wafer revenue; yield above plan | Yield issues flagged; revenue contribution pushed Q3+ | TIER 2 |
| Q1 2026 EPS vs. $3.29-3.40 Consensus | April 16 | $3.29 (Zacks) to $3.40 (MAE) | $3.45-3.55 (GM top of range + FX tailwind) | $3.10-3.25 (if GM misses guidance low) | TIER 2 |
| US Tariff Impact Commentary | April 16 | Mild reassurance; downstream risk acknowledged | No order cancellations from Apple/NVDA/AMD confirmed | Customer order deferrals confirmed; FY2026 guide hedged | TIER 3 |
| Arizona Fab Timeline | April 16 | Fab 2 tool install Q3 2026; production 2H 2027 | Fab 2 pulled to 1H 2027; $465B investment confirmed | Cost overruns flagged; CHIPS Act delays | TIER 3 |
| CapEx FY2026 Reaffirmation | April 16 | $52-56B (guided Q4 2025 call) | Raised to $58B+ on stronger demand signal | Cut below $52B — demand concern signal | TIER 3 |
| CoWoS/Advanced Packaging | April 16 | Tight supply; capacity additions progressing | Meaningful capacity addition announced; AZ packaging timeline | Continued bottleneck with no unlock timeline | TIER 3 |
Tier 1 Alert: Q2 Revenue Guidance is the Market-Moving Print
Below $36B = significant miss (-8 to -12%). $37-39B = in-line to modest beat. Above $39B = beat with re-acceleration signal (+5 to +10%). FY2026 language is binary: unequivocal reaffirmation vs. any hedging are completely different market reactions.
Peer Calendar — Critical Read-Throughs
| Date | Ticker | Company | Period | Relevance |
|---|---|---|---|---|
| Apr 16, 2026 | ASML | ASML Holding | Q1 2026 | SAME DAY — WFE demand; EUV order book; direct N2/A16 capex read-through |
| Apr 23, 2026 | KLAC | KLA Corporation | Q1 2026 | Process control equipment; N2 yield read-through |
| Apr 29, 2026 | AMD | Advanced Micro | Q1 2026 | Key HPC/AI customer on N3/N2 nodes |
| May 28, 2026 | NVDA | NVIDIA | Q1 FY2027 | Largest HPC customer; Blackwell/Rubin demand |
| Jun 5, 2026 | AVGO | Broadcom | Q2 FY2026 | Custom ASIC (Google TPU, Meta MTIA) on advanced nodes |
| Date | Headline | Detail | Thesis Impact |
|---|---|---|---|
| Jan 5, 2026 | Goldman Sachs Raises PT +35% to NT$2,330 | Cites another year of solid AI-led growth; highest-profile bull endorsement entering 2026. | Positive — institutional re-rating; establishes bullish price target framework for 2026 |
| Jan 15, 2026 | Q4 2025 Earnings: EPS $3.14 vs $2.82E (+11.3% beat); GM 62.3% beats guidance | Record beat. N2 in HVM. FY2026 guided ~+30% revenue growth. CapEx $52-56B. Most confident management tone in years. | Strongly Positive — all key metrics beat; N2 milestone achieved; forward guide above consensus |
| Late Jan / Feb 2026 | Arizona Fab 2 (N3) Tool Installation Pulled Forward to Q3 2026; Production 2H 2027 | Timeline accelerated from 2028. Fab 3 groundbreaking confirmed. Fab 4 + packaging facility permits filed. | Positive — US manufacturing timeline compressed; $65B+ Arizona commitment confirmed |
| Feb-Mar 2026 | N3/N2 Pricing Up 3-10%; N3 and N5 Nodes 100% Booked Through 2026; Capacity Through 2028 | TSMC raises advanced node prices on AI demand. Lead times exceed 50 weeks for N3. | Positive — pricing power confirmed; backlog depth de-risks near-term demand; margin upside potential |
| Mar 2026 | Google TurboQuant Memory Paper Causes Memory Selloff; TSMC Unaffected | Faster AI inference deployment viewed as net positive for wafer demand. TSMC foundry-agnostic to per-model memory. | Neutral/Positive — memory stock confusion created buying opportunity in TSMC |
| Apr 2026 (early) | Reports: US-Taiwan Tariff Deal Could Reach $465B; Semiconductor Tariffs ~15% | TSMC Arizona investment could reach $465B under proposed framework. Reduces semiconductor tariff exposure. | Positive — if confirmed, dramatically expands US footprint; reduces geopolitical risk premium |
| Apr 4, 2026 | China Imposes Rare Earth Export Controls (7 Elements Including Yttrium, Dysprosium, Terbium) | Retaliation to US tariff escalation. Rare earths used in lithography magnets and wafer-handling equipment. | Negative (limited near-term) — TSMC has strategic reserves; tail risk on 12-24 month horizon if sustained |
| Apr 6-10, 2026 | US Reciprocal Tariffs Trigger Semiconductor Selloff; Multiple Peer PT Cuts | TSMC relatively protected — manufactures in Taiwan, not subject to direct semiconductor tariffs. | Neutral — peer PT cuts create relative value; US-Taiwan discussions partially offset sector pressure |
| Apr 10, 2026 | Q1 2026 Revenue Pre-Released: $35.71B — Top of Guidance Range; March +45.2% YoY | NT$1,134B (~$35.71B). March alone NT$415.2B ($13.1B) — strongest single month in TSMC history. | Strongly Positive — removes revenue uncertainty; YoY acceleration to +39.9% validates demand thesis |
| Apr 14, 2026 | Arizona Fab 1 (N4/N5) Confirmed Generating First Profit — US Operations Milestone | Addresses long-standing investor concern about US manufacturing economics vs Taiwan equivalent. | Positive — margin confidence for AZ ramp; US cost structure viability demonstrated |
Key Newsflow Takeaway
Since the Q4 2025 earnings call, every material data point has been positive on AI demand and execution. Two geopolitical disruptions (China rare earth controls, US tariff escalation) created noise but no structural thesis damage. The Q1 2026 revenue pre-release at $35.71B (+39.9% YoY) was the definitive clean entry signal into the April 16 call. Revenue is no longer a question. Margins, Q2 guidance, and tariff commentary are.
| Quarter | Date | Consensus EPS | Actual EPS | Beat $ | Beat % | Signal |
|---|---|---|---|---|---|---|
| Q1 2024 | Apr 18, 2024 | $1.30 | $1.38 | +$0.08 | +6.2% | BEAT |
| Q2 2024 | Jul 18, 2024 | $1.39 | $1.48 | +$0.09 | +6.5% | BEAT |
| Q3 2024 | Oct 17, 2024 | $1.79 | $1.94 | +$0.15 | +8.4% | BEAT |
| Q4 2024 | Jan 16, 2025 | $2.08 | $2.24 | +$0.16 | +7.7% | BEAT |
| Q1 2025 | Apr 17, 2025 | $1.94 | $2.12 | +$0.18 | +9.3% | BEAT |
| Q2 2025 | Jul 17, 2025 | $2.31 | $2.47 | +$0.16 | +6.9% | BEAT |
| Q3 2025 | Oct 16, 2025 | $2.73 | $2.92 | +$0.19 | +7.0% | BEAT |
| Q4 2025 | Jan 15, 2026 | $2.82 | $3.14 | +$0.32 | +11.3% | BEAT |
| Q1 2026E | Apr 16, 2026 | $3.29–$3.40 | TBD | TBD | TBD | PENDING |
Beat Magnitude Visual
Q1 2024 | +6.2% | █████████░░░░░░░░░░░
Q2 2024 | +6.5% | █████████░░░░░░░░░░░
Q3 2024 | +8.4% | ████████████░░░░░░░░
Q4 2024 | +7.7% | ███████████░░░░░░░░░
Q1 2025 | +9.3% | █████████████░░░░░░░
Q2 2025 | +6.9% | ██████████░░░░░░░░░░
Q3 2025 | +7.0% | ██████████░░░░░░░░░░
Q4 2025 | +11.3% | ████████████████░░░░
Average: +7.9% | Trend: Accelerating | Pattern: Consistent Beat (8/8)
| Statistic | Value |
|---|---|
| Beat Rate | 8/8 (100%) |
| Average Beat % | +7.9% |
| Median Beat % | +7.4% |
| Smallest Beat | +6.2% (Q1 2024) |
| Largest Beat | +11.3% (Q4 2025) |
| Average Beat $ | +$0.17 |
| Trend | Accelerating |
| Q1 2026 Implied Beat Scenarios | Implied EPS |
|---|---|
| +6% beat (historical low end) | ~$3.55 |
| +7.9% beat (8Q historical avg) | ~$3.62 |
| +9% beat (recent trend) | ~$3.66 |
| +11.3% beat (Q4 2025 repeat) | ~$3.72 |
| Consensus midpoint used: $3.35 |
Gross Margin Beat Track Record
| Quarter | GM Guidance Range | Actual GM | Beat / Miss Signal |
|---|---|---|---|
| Q1 2024 | ~52–54% | 53.1% | In-line |
| Q2 2024 | ~52–54% | 53.2% | In-line |
| Q3 2024 | ~54.5–56.5% | 57.8% | Beat top by ~130bps |
| Q4 2024 | ~57–59% | 59.0% | At top of range |
| Q1 2025 | ~57–59% | 58.8% | At top of range |
| Q2 2025 | ~57.5–59.5% | 58.6% | Mid-range |
| Q3 2025 | ~58.5–60.5% | 59.5% | Mid-range |
| Q4 2025 | ~59–61% | 62.3% | Beat top by ~130bps — record outperformance |
| Q1 2026E | 63–65% | TBA Apr 16 | Key watch item |
Bottom Line: TSMC is the Highest-Quality EPS Beat Machine in Large-Cap Semiconductors
100% beat rate over 8 quarters, accelerating magnitude, with gross margin as the key swing factor. The structural driver: management guides conservatively in NTD while AI demand and pricing power deliver systematic upside. The Q4 2025 beat (+11.3%) was the largest ever — driven by 62.3% GM vs. ~60% guidance midpoint. The Q1 2026 base case entering April 16 is another beat. The risk is entirely on magnitude. If 65% GM (top of guided range) is achieved, the +10%+ EPS beat scenario is achievable.
All EPS figures are TSMC ADR diluted USD EPS. Revenue in USD unless noted. Platform revenue in NTD millions. Consensus estimates from Zacks, MarketBeat. Data sourced from Daloopa. Preview generated April 14, 2026.