TSMC’s Growth Slows Amid AI Bubble Concerns
Taiwan Semiconductor Manufacturing Company (TSMC) has reported a slowdown in its growth, raising concerns among investors about the sustainability of the artificial intelligence (AI) boom. In October, TSMC registered a 16.9% increase in sales, reflecting the slowest growth since February 2024. Nevertheless, this figure aligns with analyst expectations of a 16% rise in sales for the current quarter.
Market Reactions and Investor Sentiment
Following TSMC’s announcement, its American depository receipts saw a rise of up to 3% in pre-market trading. However, the overall market feels tense due to recent declines in Asian technology stocks, suggesting that the remarkable rally in AI and semiconductor shares may be faltering.
- TSMC’s revenue growth in October: 16.9%
- Slowest growth rate since February 2024
- Aligns with the 16% sales increase forecasted by analysts
- ADRs rose 3% in pre-market trading
Concerns Over AI Growth Sustainability
Market leaders have expressed worries regarding a potential market correction. High-ranking executives have been vocal about the need for caution. Notably, Michael Burry’s Scion Asset Management has recently taken bearish positions on Nvidia, despite significant investment plans from major tech firms.
Companies like Meta Platforms, Alphabet, Amazon, and Microsoft are projected to collectively invest over $400 billion in AI infrastructure next year. This spending represents a substantial 21% increase compared to 2025, as these firms aim to establish dominance in the evolving technology landscape.
Nvidia’s Response
Nvidia’s Chief Executive Officer, Jensen Huang, stated that his company’s growth is accelerating month by month. During a recent visit to Taiwan, he engaged with TSMC CEO C.C. Wei, requesting increased chip supplies to meet rising demand. TSMC serves as a vital supplier for Nvidia, as well as companies like Advanced Micro Devices and Qualcomm.
Industry Perspectives
Key players in the semiconductor and AI sectors are optimistic about growth. Qualcomm’s CEO, Cristiano Amon, recently remarked that the true potential of AI is largely underestimated. This sentiment reflects the ongoing high demand for semiconductor products.
Overall, as TSMC experiences slowing growth amidst rising investor concerns, the future of AI remains a hot topic. The industry watches closely as major firms continue to ramp up investments.
