Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, reported that its monthly revenue growth has slowed. This news comes as investors continue to debate how long the current boom in artificial intelligence, which has greatly boosted companies like Nvidia, can truly last.
TSMC announced a 16.9% increase in sales for October. While still a healthy gain, it marks the slowest pace of growth for the company since February 2024. Despite this slight dip, the numbers are in line with analysts’ expectations, who had predicted a 16% sales increase for the current quarter. After the announcement, TSMC’s American shares jumped as much as 3% in early trading.
Even with the recent slowdown in growth, many tech industry leaders remain very optimistic about how much AI will drive business. Big tech companies are aggressively increasing their investments in data centers to power AI initiatives. However, investors got a bit of a scare last week when Asian technology stocks suddenly dropped. This raised concerns that the incredible rise in AI and chip company stocks might be losing steam. Some Wall Street leaders have even warned that a market correction, or a significant drop, is overdue, and investor Michael Burry of Scion Asset Management recently bet against Nvidia.
Yet, leading AI players are making huge spending commitments. Companies like Meta Platforms, Alphabet, Amazon.com, and Microsoft plan to spend over $400 billion combined next year to build out their AI capabilities. This marks a 21% increase from 2025, showing their determination to lead the race in new technologies.
Nvidia’s CEO, Jensen Huang, whose company is the main supplier of AI chips to major tech firms, stated on Saturday that his business is “growing month by month, stronger and stronger.” Huang even met with TSMC CEO C.C. Wei during a recent trip to Taiwan to request additional chip supplies. Major chip designers are all trying to increase production with TSMC, but the company is constrained by the number of chips it can produce.
TSMC is crucial not just to Nvidia but also to its competitors, such as Advanced Micro Devices Inc. and Qualcomm Inc. It also manufactures the powerful chips that power Apple Inc.’s iPhones and other devices. In October, CEO Wei told analysts that TSMC’s production capacity remained very tight, and that the company is working hard to close the gap between what customers need and what it can supply.
