TSMC Raises Outlook in Vote of Confidence for AI ‘Megatrend’

Core Viewpoint - Taiwan Semiconductor Manufacturing Co. (TSMC) has raised its 2025 revenue growth projection for the second time this year, indicating strong expectations for sustained global AI spending growth [1][2]. Company Summary - TSMC now anticipates mid-30% growth in annual sales, an increase of a few percentage points from previous estimates, following a significant market rally that added over $260 billion to its market value [2]. - The company reported a 39% increase in net income to NT$452.3 billion ($14.8 billion) for the September quarter, exceeding expectations [3]. - TSMC's CEO, C.C. Wei, emphasized that despite geopolitical uncertainties and US sanctions affecting the semiconductor industry, the demand for AI technology is expected to compensate for potential market losses [4][5]. Industry Summary - The semiconductor industry is experiencing a spending surge on AI infrastructure, projected to exceed $1 trillion in the coming years, with major companies like OpenAI and Oracle racing to build necessary data centers [3]. - TSMC plays a crucial role in the AI investment landscape, particularly as a key supplier for Nvidia, which produces essential accelerators for AI services [6]. - The rapid increase in tech stock valuations and investment in AI has raised concerns about a potential bubble, reminiscent of the dotcom era, as mainstream AI applications are still developing [7].