TSMC’s Q3 2026 gross margin faces downward pressure from the rapid 2nm node ramp, which management guided would dilute margins by 3–4 percentage points in the second half due to initial low yields and elevated depreciation. The company set a 65–67% range—below Q2’s 67.7% actual—while revenue beat the top of guidance at roughly $46.7 billion, fueled by sustained AI demand for advanced processes including N3 and early N2 contributions from GPUs, ASICs, and smartphone chips. Traders appear to weigh these offsets against the dilution, producing closely matched probabilities around the upper end of guidance. The October 15 earnings call will resolve the outcome and provide Q4 outlook, with utilization rates, product mix, and any 2nm yield updates as key swing factors.