Global investments in AI infrastructure continue to drive the chip industry. TSMC saw its revenue rise by 51 percent in the third quarter, exceeding analysts’ expectations. The Taiwanese chipmaker is benefiting primarily from the sustained strong demand for advanced processors for AI applications.
In the three months through September, TSMC reported revenue of 1.49 trillion New Taiwan dollars, equivalent to 46.7 billion U.S. dollars. According to Bloomberg, analysts had expected 1.46 trillion New Taiwan dollars. The revenue figures are based on the news agency’s calculations.
The results are significant because TSMC manufactures chips for companies such as Nvidia, AMD, and Apple. The company is thus a key player in the global semiconductor industry. The revenue trend also indicates the willingness of major technology companies to continue investing in AI capacity.
Chip industry benefits from AI boom
TSMC is not alone in its strong growth. AMD CEO Lisa Su expects demand for chips to remain high in the coming years. Samsung Electronics reported this week a nearly ninefold increase in operating profit, partly thanks to favorable developments in the memory chip market. Hon Hai Precision Industry, better known as Foxconn, also exceeded revenue expectations. The company assembles AI servers, among other products.
These positive figures come at a time when questions are increasingly being raised about the financial sustainability of the AI investment boom. The massive spending on data centers, chips, and energy infrastructure is accompanied by growing financing needs. For now, however, this seems to have had little impact on demand for the most advanced semiconductors.
Investors have further bolstered their confidence in TSMC this year. The stock price reached a record high this month.
U.S. expansion may continue
Strong demand is prompting TSMC to further expand its international production capacity. The company has now announced $265 billion in investments in Arizona. According to reports from Reuters, the company is also exploring a potential new production site in Texas.
The U.S. market is of great importance to TSMC. In the first half of 2026, North American customers accounted for more than three-quarters of revenue.
However, expansion outside Taiwan does present financial challenges. New factories in the United States require substantial investments and may put pressure on margins due to higher production costs. During the earnings call, investors will therefore be paying particular attention to the investment plans for 2027 and their impact on profitability.
Price increases and new chip technology
Attention is also being paid to trends in production costs and selling prices. Taiwanese media report that TSMC is considering price increases of 3 to 6 percent for its wafers in 2027.
In addition, the chip manufacturer must maintain its technological lead. The future A14 manufacturing process and the expansion of advanced chip packaging technologies such as CoWoS and CoPoS play a key role in this. These techniques make it possible to combine multiple chip components with high performance and bandwidth, which is particularly important for AI processors.
Meanwhile, competition is intensifying. Intel is working on its own 14A manufacturing process and expanding its capabilities in advanced chip packaging.
For TSMC, the main challenge is therefore not so much finding customers, but ensuring sufficient production capacity is available in a timely manner without the massive investments eroding profitability too much.
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