Key Takeaways
- TSMC’s October revenue rose 59.7% from a year earlier to a record NT$586.89 billion, about a third of its fourth-quarter guidance in one month.
- TSMC’s board approved up to $1 billion for stakes in Anthropic and OpenAI, two of the largest buyers of AI compute.
- Gross margin slipped to 66.4% in the third quarter as early 2nm output and overseas fabs weighed, and Wei is “being prudent” about 2027.
- Nvidia reports on November 17 under an interim CEO, and TSMC’s November sales follow in early December.
Taiwan Semiconductor Manufacturing (2330) just posted its biggest month on record. October revenue rose 59.7% from a year earlier to NT$586.89 billion, and it climbed 14.7% from September.
Then the AI chip trade took a hit. Nvidia (NVDA), TSMC’s most prominent customer, said Thursday that CEO Jensen Huang had resigned, and its stock closed down 4.3%. Advanced Micro Devices (AMD), another major TSMC customer, rose about 3%.
TSMC had already cast its own vote. On Tuesday, its board approved up to $1 billion for stakes in Anthropic and OpenAI, two of the largest buyers of AI compute.
So the foundry’s sales and its checkbook point the same way.
A record month in hand
October already covers a big slice of the quarter. TSMC guided fourth-quarter revenue to $52.3 billion to $54.3 billion in mid-October, and October alone equals roughly a third of that.
The third quarter set up that guide:
- Revenue reached $46.72 billion, up 41.2% and above the top of guidance.
- Net income jumped 68.7% to NT$763.06 billion, ahead of the LSEG SmartEstimate of NT$746.3 billion.
- Revenue from January through October rose 43.3% in Taiwan dollars.
Here’s how fast the quarterly line has steepened:
The guidance midpoint implies about 58% growth from a year earlier, a faster pace than the third quarter’s.
Wei was blunt about the reason. “The demand actually is still far above our capability today to supply,” CEO C.C. Wei said on the October 15 earnings call.
Buying into its biggest buyers
TSMC will buy up to $500 million of Anthropic stock at its IPO price and up to $500 million of OpenAI preferred stock. Anthropic priced its offering this week at $70 to $78 per share, seeking a valuation of up to $1.4 trillion.
It’s also raising $26 billion privately from backers including Nvidia, AMD, Microsoft and Alphabet’s Google.
Why would a foundry want equity in its customers’ customers? Visibility is the obvious answer. Anthropic and OpenAI shape how many accelerators get ordered, and those orders eventually become TSMC wafers.
Still, the sum is tiny next to TSMC’s own spending plans…
The company kept its 2026 capex budget at $60 billion to $64 billion. That spending only pays off if AI labs keep raising money, so Anthropic’s IPO matters to TSMC well beyond $500 million.
High-performance computing already made up 68% of third-quarter revenue, which ties TSMC’s growth tightly to that funding.
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Margins carry the 2nm cost
Growth hasn’t come free. Third-quarter gross margin slipped 1.3 points from the second quarter to 66.4%, mainly because early 2nm output dilutes margins. Overseas fabs add another drag.
The 2nm node reached 8% of wafer revenue in the third quarter, up from 3% a quarter earlier. Can margins hold as it scales?
Fourth-quarter gross margin guidance sits at 65% to 67%, roughly flat at the midpoint.
Wei also tempered expectations for next year. He said rising component prices are squeezing consumer markets, and that TSMC is “being prudent in our business planning going into 2027.”
Nvidia’s shake-up adds another layer. A CEO change won’t shrink wafer orders overnight. Even so, it weighs on sentiment across a supply chain TSMC anchors.
My take: The $1 billion stake is mostly a signal, and I like what it signals. October shows demand still outrunning supply. I’d watch the margin line more closely than the Nvidia headlines, because 2nm and Arizona will test it through 2027.
Nvidia reports on November 17, its first report under interim CEO Colette Kress. TSMC’s November sales follow in early December, and they’ll show whether October was a peak or a new floor.
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