TSMC’s Growth Momentum Shows Signs of Cooling

The global leader in semiconductor manufacturing, Taiwan Semiconductor Manufacturing Company (TSMC), is experiencing a notable deceleration in its expansion pace, even after posting a record revenue figure for October. As NVIDIA's CEO Jensen Huang personally advocates for increased production capacity and technology giants pour hundreds of billions into AI infrastructure, TSMC's growth has slowed to its most modest rate in nearly two years. This development raises a pivotal question for investors: is the artificial intelligence boom fading, or is this merely a temporary consolidation phase?

Concerns about waning demand appear premature when examining TSMC's order books. The company's most advanced 3-nanometer and 5-nanometer manufacturing lines are operating at full capacity, with industry titans including Apple, AMD, Qualcomm, and NVIDIA competing for limited production slots. The intensity of this demand was underscored on November 8th when NVIDIA's chief executive Jensen Huang made a personal visit to Taiwan to meet with TSMC management, emphasizing the overwhelming need for more chips.

This corporate urgency is fueled by substantial investment commitments. Technology behemoths Meta, Alphabet, Amazon, and Microsoft have collectively planned AI infrastructure expenditures exceeding $400 billion for the coming year—a 21 percent increase over 2025 projections. These substantial investments are directly channeled into data centers, high-performance servers, and the advanced semiconductors that power them, all flowing through TSMC's manufacturing facilities.

Record Revenue Masks Underlying Slowdown

TSMC's October financial performance presented a complex picture. The company reported consolidated revenue of 367.47 billion Taiwanese dollars, representing an all-time high and a 16.9 percent improvement compared to October 2024. However, a deeper analysis reveals concerning trends. The growth rate marks a significant slowdown from the over 30 percent expansion recorded in both August and September, representing the weakest performance since February 2024.

Market analysts had anticipated some moderation, but the extent has sparked debate about the sustainability of the AI-driven semiconductor boom. When measured in U.S. dollars, the growth picture appears more robust at 22.6 percent, indicating that currency fluctuations have distorted the Taiwanese dollar-denominated results.

Should investors sell immediately? Or is it worth buying TSMC?

Strategic Response to Market Conditions

TSMC is implementing strategic measures to address the supply-demand imbalance. The corporation is orchestrating substantial investments in new production facilities and packaging plants within Taiwan. Concurrently, the chipmaker is preparing price increases of 8 to 10 percent for its advanced manufacturing services in 2026, signaling confidence in sustained demand strength.

For the final quarter of 2025, TSMC has provided revenue guidance ranging between $32.2 billion and $33.4 billion. While this would represent a slight sequential decrease, it significantly outperforms typical seasonal softening patterns observed toward year-end. Company officials attribute this resilience to robust artificial intelligence demand offsetting weaknesses in other semiconductor segments.

Interpreting the Growth Trajectory

The central uncertainty facing investors is whether October's moderated growth represents a temporary pause within an extraordinary expansion cycle or the beginning of a more substantial cooling period. Fundamental drivers continue to support TSMC's dominant position. The global AI infrastructure upgrade continues unabated, and no other manufacturer can deliver cutting-edge chips at TSMC's scale and technological sophistication.

Market participants await December's revenue report, scheduled for release early next month, which should provide clearer indications of the company's trajectory. Until then, TSMC shares remain suspended between the competing narratives of record-breaking demand and valuation concerns, reflecting the broader uncertainty in semiconductor markets.