Key Points
- TSMC reported its slowest monthly revenue growth since February 2024, raising some concerns about the AI boom.
- The market is on edge, with some investors and analysts warning of a potential short-term peak in AI and semiconductor stocks.
- Despite the slowdown, major tech companies are planning to spend over $400 billion on AI infrastructure next year.
- Nvidia’s CEO, Jensen Huang, recently visited TSMC to request more chip supplies, highlighting the intense demand.
Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest chipmaker, reported slower growth in its monthly revenue, creating some uncertainty about how long the AI boom can last. This comes even as industry giants like Nvidia are pushing for more chip supplies.
TSMC announced a 16.9% increase in sales for October, which is its slowest growth rate since February 2024. Despite this, industry executives remain optimistic about AI-driven growth, as major tech companies are speeding up their investments in data centers. It’s also worth noting that this revenue report covers only a single month, offering limited insight.
Still, the market is a bit nervous. Investors were recently spooked by a sudden drop in Asian technology stocks, a reminder that the incredible rally in AI and semiconductor stocks might be at a short-term peak. Some Wall Street CEOs have warned that a market correction is overdue, and Michael Burry’s Scion Asset Management has also made bets against Nvidia.
This caution comes despite huge spending plans from the biggest players in AI. Meta, Alphabet, Amazon, and Microsoft are set to collectively spend over $400 billion on their AI buildout next year, a 21% increase from 2025.
Nvidia CEO Jensen Huang, whose company is the main AI chip supplier to these tech giants, said on Saturday that his business is “growing month by month, stronger and stronger.” During a recent trip to Taiwan, Huang met with TSMC’s CEO, C.C. Wei, and asked for more chip supplies. TSMC is in high demand because it also makes chips for Nvidia’s competitors, such as AMD and Qualcomm, as well as for Apple’s iPhones.
His rivals share Huang’s optimism. Qualcomm CEO Cristiano Amon recently said that the world is underestimating just how big AI will get. In October, TSMC’s CEO, Wei, told analysts that his company’s capacity remained “very tight” and that it was working hard to keep up with overwhelming demand.
