TSMC monthly sales growth slows as AI demand moderates
However, industry executives remain buoyant about AI-driven growth
[TAIPEI] Taiwan Semiconductor Manufacturing Company (TSMC) reported slowing growth in its revenue in October, potentially another indication that the demand for artificial intelligence (AI) is moderating, as the market turns frothy.
Sales in October rose by 16.9 per cent, the slowest pace since February 2024. Analysts, on average, are expecting TSMC sales to increase by 16 per cent in the current quarter.
Still, TSMC shares have gained about 37 per cent since the beginning of this year.
Global tech stocks suffered a rout last week on investors’ growing unease over the sector’s sky-high valuations, with Wall Street chief executives warning of an overdue market correction.
Michael Burry’s Scion Asset Management also disclosed bearish wagers on Nvidia.
But industry executives remain buoyant about AI-driven growth.
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Meta Platforms, Alphabet, Amazon.com and Microsoft will collectively spend more than US$400 billion to fund an AI buildout next year, a 21 per cent hike from 2025, to secure leadership in the race for emerging technologies.
Chief executive officer Jensen Huang of Nvidia, which is the primary AI chip supplier for major companies, said on Saturday (Nov 8) that his business is “growing month by month, stronger and stronger”.
He met the CEO of TSMC, CC Wei, and asked for more chip supplies during his two-day whirlwind trip to Taiwan this time, while major chip designers chase limited supplies from the Hsinchu-based company.
TSMC is also the go-to chipmaker for the Santa Clara, California-based firm’s competitors, including Advanced Micro Devices and Qualcomm, and it makes Apple’s silicon for iPhones and other gadgets.
Huang’s optimism is shared by his rivals. Qualcomm CEO Cristiano Amon told Bloomberg TV last week that the world is underestimating how big AI will get.
In October, Wei told analysts that TSMC’s capacity is still very tight, and the company is working hard to narrow the gap between demand and supply. BLOOMBERG
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