Key Takeaways
- TSMC’s October revenue rose 14.7% from September and 59.7% from a year earlier to NT$586.89 billion, its first monthly report since the post-midterm chip selloff.
- The selloff prices in weaker AI orders in 2027 and 2028, a slowdown that hasn’t reached TSMC’s sales.
- Customers had prepaid NT$234.2 billion for TSMC capacity by June 30, even as management plans cautiously for 2027.
- TSMC trades at 16x forward earnings, below its five-year average of 18x. Its 2027 outlook, expected in mid-January, is the next real test.
Taiwan Semiconductor Manufacturing (TSM) reported October revenue of NT$586.89 billion on Nov. 10, up 14.7% from September and 59.7% from a year earlier. It’s TSMC’s first monthly report since the post-midterm chip rout, and it shows no slowdown.
That matters for more than TSMC. Nvidia (NVDA) relies on TSMC to make its AI chips, so the foundry’s monthly sales are about as close to a live read on AI hardware demand as investors get.
October Ran Ahead of TSMC’s Guidance Pace
TSMC guided fourth-quarter revenue to US$52.3 billion to US$54.3 billion, assuming NT$31.8 per US dollar. Spread over three months, that’s NT$554 billion to NT$576 billion a month, and October cleared the top of the range. Sales through October reached NT$4.49 trillion, up 43.3% from a year earlier.
To land inside that guide, November and December now need NT$538 billion to NT$570 billion each. Analysts’ NT$5.58 trillion full-year estimate needs about NT$548 billion a month, in the lower half of that range and below what October brought in. After that, analysts expect revenue to reach NT$7.69 trillion in 2027 and NT$9.73 trillion in 2028:
Nothing in October’s report gives them a reason to cut.
The Selloff Is a Bet on 2027 and 2028
Morgan Stanley’s Mike Wilson summed up the rout on the Nov. 9 episode of Thoughts on the Market: “The midterms were the rumor, and the market spent several months selling it.” He put semiconductors down roughly 40% from their June highs.
TSMC’s sales haven’t felt it. Revenue has risen for six quarters in a row, reaching NT$1.49 trillion in the three months to Sept. 30, up 51% from a year earlier:
A foundry’s sales reflect orders placed months ago, so October can’t say what customers will want in 2028. Prepayments get closer. Customers had paid TSMC NT$234.2 billion in advance by June 30, up from NT$189.9 billion at the end of 2025. The noncurrent portion more than doubled to NT$92.4 billion. TSMC says these payments retain capacity and are later refunded or offset against receivables. They aren’t guaranteed revenue, but customers don’t usually tie up cash to hold capacity they don’t plan to use.
Nvidia gets its own test on Nov. 17. It guided revenue for the quarter ended Oct. 25 to $108 billion, plus or minus 2%, up 12% from $96.2 billion the quarter before. Its next-quarter outlook will show whether its customers are still ordering at the pace TSMC’s October sales imply.
TIKR Tracks 35 Analysts on TSMC. How Many Say “Buy”?
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Priced for a Slowdown TSMC Hasn’t Seen
At the Nov. 9 close, TSMC traded at 16x forward earnings, below its five-year average of 18x and well under the 25x it hit in July 2024:
The risk is real. CEO C.C. Wei said on the Oct. 15 earnings call that TSMC is “being prudent in our business planning going into 2027,” while maintaining its 2026 capital budget at US$60 billion to US$64 billion. The last time a record build met a slower market, in 2023, revenue fell 4.5%.
Still, I think the selloff has gotten ahead of the evidence. At 16x, investors are paying a below-average multiple for a company that beat its own guidance last quarter and started this one above its guidance pace. November’s sales, due around Dec. 10, are the next check. The bigger one is TSMC’s 2027 outlook in mid-January. If that lands near consensus, today’s price will look like a bargain.
So What Is TSMC Stock Actually Worth?
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Disclaimer:
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