Following Samsung, TSMC reported a surge in revenue. Why are investors unhappy?

Taiwanese chipmaker Taiwan Semiconductor Manufacturing (TSMC) reported a 51% increase in quarterly revenue: this was expected to be a positive sign for investors trying to assess the sustainability of global artificial intelligence infrastructure development, Bloomberg notes. However, TSMC’s stock fell—following the decline in shares of Samsung Electronics, which had reported its results earlier.

TSMC's revenue for the three-month period ending in September totaled 1.49 trillion New Taiwan dollars ($46.7 billion). Analysts had forecast an average of 1.46 trillion New Taiwan dollars, according to Bloomberg.

Amid surging demand for artificial intelligence technology, TSMC is now considering further expansion in Texas after pledging to invest $265 billion in the creation of a technology campus in Arizona. North American customers accounted for more than 75% of the company’s total sales in the first half of this year.

The company's shares closed down 1.3% in Taiwan. Shares traded in the U.S. were down 1.3% in premarket trading on October 8.

Investors reacted cautiously to TSMC’s record results and Samsung Electronics’ earnings report: market sentiment was dampened by concerns about the sustainability of the investment boom, which is fueled by rising debt levels, according to Bloomberg. Samsung shares fell 2.4% on Thursday in Seoul. In Tokyo, shares of both companies’ partners—Tokyo Electron, Advantest, and Ibiden—also declined.

Investors are skeptical about the long-term viability of spending on artificial intelligence, especially as companies’ major capital expenditure plans come under pressure due to rising borrowing costs worldwide, according to Bloomberg.

The main questions at the third-quarter earnings briefing focused on 2027 and the longer-term outlook, noted Bloomberg Intelligence analyst Charles Shum. “In July, TSMC increased its investment in the Arizona project by $100 billion, while Reuters reports on the possible emergence of a manufacturing hub in Texas; any new information could call into question the company’s guidance on the erosion of overseas profitability and indicate the scale of capital expenditures for 2027,” Shum said. Another key focus, he said, is pricing: according to Taiwanese media reports, the cost of silicon wafers could rise by 3–6% in 2027.

The overwhelming majority of analysts covering TSMC stock—34 out of 35—recommend buying it. Only one recommends holding it in a portfolio.

Processor manufacturer AMD is ramping up chip production to meet a surge in demand. The company’s revenue in the data center segment more than doubled to $6.7 billion for the quarter ending in June, accounting for nearly 60% of total sales. In the second half of 2026, AMD forecasts an 80% year-over-year increase in revenue from server processors, and a 70% increase in 2027.

CEO Lisa Su told reporters on October 6 that the company will “significantly increase” chip shipments in 2027.

Samsung Electronics—the world's largest supplier of memory chips— reported on October 8 that its third-quarter operating profit had surged nearly ninefold, reaching a record high for the global technology sector.

In addition, Hon Hai Precision Industry (Foxconn), the world’s largest contract electronics manufacturer, exceeded its quarterly sales forecasts this week. Shares of the leading chipmaker for Nvidia and Apple—which serves as a barometer of demand for artificial intelligence—hit a record high this month.

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