Moody’s upgrades TSMC rating to Aa2 on booming AI demand and market dominance

Asian stocks rose Wednesday, led by chipmakers, after strong earnings from SpaceX and Super Micro Computer boosted AI-related sectors. SpaceX shares gained 8.1%, while Super Micro surged 16%. Netflix fell 6% on weaker outlook. Samsung and SK Hynix also advanced. Brent crude traded above $110 due to supply concerns. Meta Platforms and Tesla are set to report earnings later.

GlobalFoundries (GFS) secured a $2B deal with TSMC (TSM) to manufacture silicon interposers, starting production in 2028. Intel and Corning are also involved in advanced packaging for AI accelerators. The deal represents ~5.6% of GFS's 2026 annualized revenue, offering growth opportunities in AI infrastructure.

GlobalFoundries will produce silicon interposers for TSMC's CoWoS advanced-packaging system at its New York facility, starting volume production in early 2028. The five-year agreement aims to establish a U.S.-based source for these components, crucial for AI systems. TSMC will handle broader CoWoS offerings and finished-package integration.

Apple adds Perryman and Qnity to its U.S. Manufacturing Program. Perryman will supply titanium for the iPhone Duo, with Apple committing up to $100M over three years. Qnity will produce camera components for the iPhone 18 Pro. Apple states nearly 100 components for these models are U.S.-made, with Corning, Broadcom, and TSMC also involved in domestic production.

TSMC's stock rose 2.5% to $422.78 on October 19, following its Q4 sales target of $53.3B. The company expects 14.1% sequential revenue growth but forecasts a slight margin contraction to 56.5-58.5%. TSMC's valuation is 15.88% above the GF Value estimate, with investors watching for strong execution and profitability.

TSMC plans to invest over $23 billion in 3nm semiconductor manufacturing at its second Japan factory, JASM. The project, supported by the Japanese government, will be implemented in phases based on market demand. TSMC reported a 68.7% year-on-year net profit increase to $23.86 billion in Q3, with revenue up 50.9% to $46.72 billion.