⚡ TSMC: Not Slowing Down

TSMC reported record Q3 earnings, with revenue of NT$1.49 trillion and net income of NT$763.1 billion, driven by AI chip demand. The company expects Q4 revenue growth of 14% and full-year growth of 44%. TSMC is investing heavily in expansion, including a new fab in Arizona, but faces margin pressures from new chip production and higher costs. TSM stock has risen 16% in the last 6 months, with a price target of $103.

Taiwan Semiconductor (TSM) trades at $422.40, near its price a month ago despite six straight quarters of record profit. Q3 EPS beat estimates at $4.60, with revenue of $46.7B. The company raised full-year growth guidance to 44%. Shares dropped 7.77% over the past week, with a forward P/E of 21. Analysts see 36.9% upside, with strong buy ratings. Margin dilution and capex concerns are noted.

Taiwan plans a $4B Texas industrial park to support AI hardware production, aiding Nvidia's supply chain. The project aims to help Taiwanese vendors like TSM and Foxconn establish U.S. operations. Quanta and Wistron have also announced U.S. investments. Taiwan's economy minister noted $20B in planned U.S. investments, separate from TSMC's $265B Arizona expansion.

Global semiconductor firms are expanding U.S. foundry production. TSMC is evaluating a Texas plant, Samsung is preparing its Taylor plant, and GlobalFoundries is building in New York with Japanese funds. TSMC is investing $265B in Arizona, while the U.S. and Japan are investing $21B in New York plants. Competition for U.S. clients is intensifying, with geopolitical and supply chain factors driving demand for local production.

Taiwan plans to tighten export controls on AI chips and servers to China, aligning with U.S. restrictions. TSMC is investing $265 billion in U.S. chip manufacturing and discussing a role in Musk's Terafab project. TSMC reported a 51% Q3 revenue jump and expects 61% growth in the current quarter, easing AI chip demand concerns.

Taiwan Semiconductor (TSM) reported Q3 2026 gross margin at 66.4%, down 1.3% sequentially due to 2nm tech costs. Q4 margin guided lower to 66%. Overseas fab margins expected to widen to 3-4% by 2027. AI demand robust, but supply tight. CapEx remains high. High NA EUV adoption planned for 2030. Chairman Wei emphasized strong demand and capacity planning efforts.