A boon for TSMC ($TSM ), and for the entire AI chip supply chain.
TSMC announced its October sales today: NT$586.89 billion, up 59.7% year over year and 14.7% month over month. Sales for the first 10 months of the year were up 43.3%. On the same day, Taiwan’s exports surged 58.9% year over year in October, topping $90 billion for the first time in a single month. These two sets of figures are the strongest evidence yet of AI demand.
Why is TSMC so important? It manufactures more than 90% of the world’s most advanced AI chips. Orders from NVIDIA (NVDA), AMD (AMD), and Google (GOOGL) for its TPUs are all running through TSMC’s production lines. TSMC doesn’t sell products directly; it manufactures chips for tech companies around the world. There’s only one explanation for its soaring revenue: its production lines are being snapped up, and capital spending on AI data centers is still accelerating.
This also directly contradicts the recent market panic. Chip stocks plunged over the past week amid the Jensen Huang scandal and debate over an “AI bubble,” with the Philadelphia Semiconductor Index falling as much as 12%. But orders don’t lie: what’s collapsing is sentiment, not demand.
The areas set to benefit are clear. Equipment and materials suppliers in TSMC’s supply chain will follow its expansion plans; advanced packaging and HBM memory will continue to benefit from capacity growth; and order visibility is improving for A-share packaging and testing companies that supply TSMC.
As for TSMC itself, its year-over-year revenue growth has climbed steadily over the past three months, showing that prices are rising while volumes are growing—a best-case scenario for the semiconductor industry.
Here’s one thing to remember when investing in chips: orders matter more than sentiment, and orders don’t lie.
Do you have any chip stocks in your portfolio? Did you add to your positions during this pullback or get out? Let’s talk in the comments~
TSMC announced its October sales today: NT$586.89 billion, up 59.7% year over year and 14.7% month over month. Sales for the first 10 months of the year were up 43.3%. On the same day, Taiwan’s exports surged 58.9% year over year in October, topping $90 billion for the first time in a single month. These two sets of figures are the strongest evidence yet of AI demand.
Why is TSMC so important? It manufactures more than 90% of the world’s most advanced AI chips. Orders from NVIDIA (NVDA), AMD (AMD), and Google (GOOGL) for its TPUs are all running through TSMC’s production lines. TSMC doesn’t sell products directly; it manufactures chips for tech companies around the world. There’s only one explanation for its soaring revenue: its production lines are being snapped up, and capital spending on AI data centers is still accelerating.
This also directly contradicts the recent market panic. Chip stocks plunged over the past week amid the Jensen Huang scandal and debate over an “AI bubble,” with the Philadelphia Semiconductor Index falling as much as 12%. But orders don’t lie: what’s collapsing is sentiment, not demand.
The areas set to benefit are clear. Equipment and materials suppliers in TSMC’s supply chain will follow its expansion plans; advanced packaging and HBM memory will continue to benefit from capacity growth; and order visibility is improving for A-share packaging and testing companies that supply TSMC.
As for TSMC itself, its year-over-year revenue growth has climbed steadily over the past three months, showing that prices are rising while volumes are growing—a best-case scenario for the semiconductor industry.
Here’s one thing to remember when investing in chips: orders matter more than sentiment, and orders don’t lie.
Do you have any chip stocks in your portfolio? Did you add to your positions during this pullback or get out? Let’s talk in the comments~
