Taiwan Semiconductor Manufacturing Company (TSMC), the world’s premier semiconductor foundry, has announced unprecedented monthly sales, yet a deeper analysis of the figures reveals a troubling deceleration in its expansion trajectory. The company reported October revenue of $11.85 billion, a new high, but this record performance comes with a significant caveat that has market participants questioning the sustainability of the artificial intelligence-driven rally.
Growth Momentum Shows Signs of Faltering
While the headline number appears robust—representing a 16.9 percent year-over-year revenue increase—this actually constitutes TSMC’s most modest annual growth rate since February 2024. The month-over-month gain of 11 percent further fails to dispel concerns about diminishing momentum, particularly within a sector currently experiencing unprecedented demand for AI-processing chips.
Market observers are now shifting their focus from whether demand will persist to determining its potential duration. Recent weakness across Asian technology equities has exposed underlying investor apprehension, suggesting the semiconductor sector’s impressive rally may be approaching its cyclical peak.
Should investors sell immediately? Or is it worth buying TSMC?
Divergent Market Reactions Emerge
The financial markets delivered a mixed response to TSMC’s earnings release. Shares advanced by 1.03 percent in Taiwan trading, reaching 1,475 Taiwanese dollars, while the company’s U.S.-listed securities posted a more substantial 3.2 percent gain. This positive price action indicates that some investors remain focused on the absolute record figure rather than the concerning growth deceleration.
Displaying confidence in its near-term prospects, TSMC has provided fourth-quarter revenue guidance ranging between $32.2 billion and $33.4 billion. Company leadership anticipates that sustained artificial intelligence demand will counterbalance typical seasonal softness. Further reinforcing this optimistic outlook, the board authorized a dividend increase, raising the quarterly payout from $0.65 to $0.83 per share.
Long-Term Trajectory Remains Uncertain
Cumulative revenue for the initial ten months of the year shows a formidable 33.8 percent expansion. However, the emerging slowdown pattern casts uncertainty over TSMC’s ability to maintain this exceptional performance level. The critical question facing investors is whether October’s record sales represent the culmination of an extraordinary growth cycle or merely a temporary moderation. Forthcoming quarterly results will prove decisive in determining if the AI growth engine can sustain its powerful output or is beginning to falter.
Ad
TSMC Stock: Buy or Sell?! New TSMC Analysis from November 11 delivers the answer:
The latest TSMC figures speak for themselves: Urgent action needed for TSMC investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from November 11.
TSMC: Buy or sell? Read more here...
