TSMC Reports Slower October Sales Growth

TSMC’s October Sales Growth Slows Amid Shifting AI Demand

Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, posted a new monthly sales record in October 2025, but the pace of year-over-year growth slowed compared to previous months. This signals a moderation in the explosive demand for artificial intelligence (AI) chips that has driven its business over the past year.

Financial Performance and Sales Trends

October Sales Record: TSMC set a new monthly high for sales in October 2025, underscoring its dominant position in advanced semiconductor manufacturing.
Year-to-Date Growth: From January to October 2025, TSMC’s cumulative revenue reached NT$3,130.44 billion (about US$100 billion), reflecting a 33.8% increase over the same period in 2024.
Slowing Momentum: Despite the record, October’s year-over-year growth rate of approximately 17% represents a noticeable slowdown from the 49% gains reported earlier in the year.
2025 Forecast: TSMC has upgraded its full-year sales growth forecast to nearly 35%, up from an earlier estimate of 30%.

Drivers of Growth and Recent Challenges

AI Chip Demand Moderates
The semiconductor industry, and TSMC in particular, has benefited immensely from the AI boom. However, the blistering pace of growth in this segment appears to be tapering off as customers work through existing inventories and adjust to new product cycles.

Diversification and Technology Leadership
TSMC’s ability to maintain growth despite the AI slowdown is partly due to its diversified customer base, which includes smartphone, automotive, and IoT chipmakers. The company’s technological edge in advanced nodes (3nm and below) ensures it remains the preferred foundry for the most demanding applications.

Macroeconomic and Geopolitical Factors
Global economic uncertainty, including potential recessions in major markets and ongoing U.S.-China tensions, adds complexity to TSMC’s outlook. The company’s expansion into new regions, such as its Arizona and Japan fabs, is both a hedge against geopolitical risk and a response to growing demand for localized supply chains.

Market and Investor Reaction

TSMC’s American depositary receipts (ADRs) have surged nearly 49% over the past year, reflecting investor optimism about the company’s long-term prospects. However, some analysts now question whether the stock’s valuation has gotten ahead of near-term fundamentals.

Industry Impact and Future Outlook

Semiconductor Cycle Normalization
The moderation in TSMC’s sales growth is part of a broader normalization in the semiconductor cycle. After two years of unprecedented demand, the industry is entering a phase of inventory digestion and more measured growth.

Strategic Positioning
TSMC’s upgraded full-year forecast suggests management expects the current slowdown to be temporary. The company’s massive investments in capacity expansion and next-generation technologies position it to capture future growth waves.

Competitive Landscape
Rivals such as Samsung Foundry and Intel Foundry Services are aggressively investing to catch up, but TSMC’s technology lead and scale give it a durable advantage.

Context and Implications

The slowdown in TSMC’s monthly sales growth is a reminder that even industry leaders are not immune to cyclical forces. However, the company’s record revenues and upwardly revised guidance demonstrate remarkable resilience. For the global tech ecosystem, TSMC’s performance is a bellwether: sustained investment in advanced manufacturing is essential for innovation, but growth rates will fluctuate with end-market demand.

For policymakers and investors, TSMC’s story underscores the importance of supply chain diversification and the strategic value of semiconductor sovereignty. As the company navigates a more complex operating environment, its decisions will have ripple effects across the entire electronics value chain.