Taiwan Semiconductor Manufacturing Co (TSMC) posted its slowest monthly revenue growth in more than a year, lending credence to concerns that the artificial intelligence stock rally is not justified by the industry’s business prospects.
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TSMC, the main contract manufacturer to AI chip leader Nvidia, posted a 16.9 per cent rise in sales for October, the slowest pace since February 2024.
Still, that tracks with the average analyst estimate for a 16 per cent sales increase in the current quarter. TSMC has also been grappling with a strengthening local currency that may have affected its reported revenue. Its shares stood largely unchanged in Taipei on Tuesday.
Industry executives remain buoyant about AI-driven growth, as major tech firms are accelerating investments in data centres. The TSMC revenue gain covers just a single month of business, offering investors less insight.
“TSMC’s seemingly slower 17 per cent year-on-year October sales growth in local currency doesn’t indicate AI chip demand is cooling,” Bloomberg Intelligence analyst Charles Shum said in a report. “The figure is distorted by first-half order pull-ins and a weaker greenback. In US dollar terms, October revenue climbed 22.6 per cent to US$12 billion, from US$9.8 billion a year ago, aligning with the midpoint of fourth-quarter guidance.”
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Still, the market is on edge.
