TSMC’s October Growth Slowdown Sparks AI Demand Concerns Amidst Continued Investment Surge

TSMC reported a 16.9% revenue increase in October, marking its weakest growth since February 2024. The slowdown has ignited fresh concerns about cooling demand for AI chips, despite analysts maintaining a 27.4% growth forecast for the current quarter. TSMC's stock remains up 37% year-to-date, reflecting sustained investor optimism—though recent tech selloffs suggest growing unease about inflated valuations.

Wall Street heavyweights, including Michael Burry's Scion Asset Management, have signaled caution with bearish bets against Nvidia. Yet the industry continues its relentless AI infrastructure push. Meta, Amazon, Microsoft, and Alphabet are projected to collectively invest over $400 billion by 2026—a 21% increase from current levels—to secure dominance in the AI race.

Nvidia CEO Jensen Huang's urgent meeting with TSMC's C.C. Wei in Taiwan underscores the supply-demand imbalance. "We're growing month by month, stronger and stronger," Huang asserted, echoing the scramble for production slots at TSMC's Hsinchu plants. The foundry's capacity constraints persist, with AMD, Qualcomm, and Apple also vying for output.