TSMC (TSM) Stock: Climbs as AI Demand Fuels 17% YoY Sales Surge

TLDRs;

• TSMC stock climbed 3.06% on Monday after posting record October sales of NT$367.5 billion ($11.9B).
• Sales rose 16.9% YoY, driven by strong AI chip demand and recovery in non-AI markets.
• Advanced nodes (7nm and below) made up 74% of wafer revenue, highlighting TSMC’s tech leadership.
• Q4 revenue forecast: $32.2–$33.4B, with AI demand expected to offset seasonal slowdowns.

Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM) surged 3.06% to $295.27 at Monday’s close, following the chipmaker’s report of record-breaking October revenue driven by artificial intelligence demand.

The stock’s rally reflected growing investor confidence that TSMC will continue to dominate the AI chip supply chain amid heightened orders from Nvidia, AMD, and other hyperscalers.

Overnight trading saw the stock ease slightly by 0.68% to $293.25, but analysts say momentum remains strong heading into the fourth quarter. TSMC’s October performance highlighted how the global AI boom is transforming semiconductor demand and reinforcing Taiwan’s strategic role in chip manufacturing.

Record NT$367.5 Billion in October Revenue

According to company data, TSMC generated NT$367.5 billion (US$11.9 billion) in sales for October 2025, marking a 16.9% year-over-year increase and 11% growth from September. This figure surpassed the company’s previous monthly high of NT$349.6 billion (US$10.8 billion) achieved in April.

From January through October, TSMC’s consolidated revenue reached NT$3.1 trillion (US$96 billion), up 33.8% year-on-year. Analysts attributed the record numbers to surging demand for high-performance computing and AI chips used in data centers, machine learning systems, and next-gen GPUs.

AI and Advanced Packaging Drive Expansion

The company’s CoWoS (Chip-on-Wafer-on-Substrate) technology has become a critical bottleneck in global AI chip production, limiting supply as major firms like Nvidia and AMD compete for capacity. TSMC aims to expand its CoWoS output from around 13,000 wafers per month in 2023 to over 100,000 by 2026.

TSMC also continues to ramp up its 3-nanometer production, which accounted for 23% of total wafer revenue in Q3, alongside 5-nanometer (37%) and 7-nanometer (14%) processes. Together, advanced nodes (7nm and below) made up 74% of wafer sales, showing the company’s strategic focus on high-margin, AI-driven manufacturing.

The chipmaker’s strong financial position allows it to maintain high gross margins (59.5%) and operating margins (50.6%), further reinforcing its dominance.

Analysts Expect Strong Q4 Performance

For the fourth quarter, TSMC projects revenue between US$32.2 billion and US$33.4 billion, supported by continued AI demand and a mild rebound in consumer electronics. Analysts believe the seasonal slowdown typically seen at year-end will be largely offset by data center and HPC orders.

Capital expenditure for 2025 is expected to reach US$40–42 billion, with about 70% directed toward advanced nodes and up to 20% toward specialty technologies and packaging. The firm is also building multiple fabs and R&D centers in Taiwan, Japan, and Arizona, the largest expansion effort in semiconductor history.

TSMC’s results and strategic investments signal that AI-driven semiconductor growth is far from peaking. As hyperscalers like Microsoft, Amazon, and Google ramp up AI infrastructure spending, TSMC remains the backbone of global chip production, a position it appears intent on strengthening.

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