A chip manufacturer that supplies Nvidia and Apple has increased its revenue by 60%. Why is this important?

Revenue for TSMC, the world's largest contract chip manufacturer and a key supplier to Nvidia and Apple, rose 60% year-over-year in October to 586.9 billion New Taiwan dollars ($17.9 billion).

TSMC's revenue growth is accelerating—in the third quarter, it reached approximately 51%, exceeding analysts' expectations. Analysts expect revenue to increase by an average of 63% in the fourth quarter, according to Bloomberg.

TSMC shares rose 2.2% during trading on November 10.

TSMC’s revenue is a key indicator of the state of the AI market, as the company manufactures chips for most of the tech giants. By comparison, a year earlier, in October 2025, TSMC’s revenue was growing at a much more modest pace—16.9% year-over-year—which was the slowest growth since February 2024 and was interpreted at the time as a possible sign of cooling demand for AI technology

The manufacturer itself is counting on a fundamental shift in the industry, according to Bloomberg. The company is currently working to build and equip about 20 factories in Taiwan and abroad. For TSMC, this is an unprecedented scale: it typically works on only four or five new sites at a time. CEO C.C. Wei emphasizes, however, that the company is expanding cautiously: it is evaluating a site in Texas and has discussed a potential partnership with Elon Musk’s Terafab project.

The company has so far managed to accelerate sales growth and expand capacity at the same time. TSMC has confirmed that its capital expenditures this year will reach a record $64 billion.

At the same time, investors remain concerned about the long-term outlook for AI demand due to rising data center construction costs. TSMC’s stock fell in early November along with the entire tech sector amid concerns that a Democratic victory in the U.S. midterm elections would lead to tighter regulation of the industry.

According to Bloomberg Intelligence analyst Charles Shum, TSMC’s earnings per share in 2027–2028 could exceed the consensus forecast by 6–7% due to growth in revenue and gross margin. Even with a $250 billion expansion program, the company’s cutting-edge capacity remains virtually fully booked through 2028, which supports the potential for price increases, the analyst notes. In his view, growth potential will narrow by 2029—as depreciation expenses rise, demand for AI slows, and competitors expand their supply.

This article was AI-translated and verified by a human editor