Rising demand for chips drives TSMC

Taiwanese chip manufacturer TSMC reported revenue in October 2025 up 16.9 percent compared with the same period last year, reaching a record TWD 367.47 billion, or approximately USD 11.87 billion. Although this represents the slowest growth rate since February 2024, it remains strong thanks to robust demand driven by the development of artificial intelligence and the expansion of data centers. For the first ten months of 2025, TSMC's revenue increased by 33.8 percent year over year, reaching TWD 3.13 trillion.

The growth of artificial intelligence is significantly boosting demand for TSMC’s most advanced manufacturing processes, including chips produced using three-nanometer technology and the planned two-nanometer processes. Chips produced with three-nanometer lithography feature higher transistor density, better performance, and lower energy consumption, which is crucial for running increasingly complex AI models in data centers as well as edge devices. Three-nanometer and two-nanometer processes allow for greater computational power while reducing energy usage, which is especially important for applications requiring intensive computing, such as machine learning, big data analysis, and process automation. The company is already highlighting the high utilization of its production capacity and the growing demand for its most advanced technologies.

Beyond the direct impact of artificial intelligence on demand for advanced processes, AI is also shaping global supply chains and capital investment trends in the semiconductor sector. Companies are increasing spending not only on chip production but also on the expansion of data center infrastructure, computing systems, and supporting components, including advanced cooling systems and specialized materials. This multiplier effect across the sector accelerates innovation and boosts competition among manufacturers, potentially leading to faster introduction of new technology generations and raising the overall growth pace of the industry.

Despite the observed month-to-month slowdown in growth, TSMC remains a key supplier for the largest companies in the AI sector, including major players such as NVIDIA, which recently requested increased chip deliveries. In addition, TSMC plans to raise the prices of its manufacturing services. Reports indicate the company intends to increase prices for advanced chip production processes by an average of eight to ten percent starting in 2026, with some nodes and clients seeing increases of up to ten percent. These price adjustments will cover both two- and three-nanometer processes as well as advanced packaging methods. The decision is driven by rising investment expenditures, higher production costs in new locations, and increased demand for AI chips.

TSMC’s results are having a positive impact on sentiment in the technology sector, although investors are becoming more cautious due to the potential for market corrections and high valuations in the industry. The outlook for continued strong demand for the most advanced semiconductors makes TSMC and its clients strategically important players on the global technology map. October’s results confirm the enduring strength of the semiconductor market driven by artificial intelligence while also signaling a natural slowdown in growth following a period of dynamic expansion. For the markets, this indicates that demand for the most advanced technologies is one of the key drivers of growth and transformation in the sector, making TSMC a strategically significant participant in the global technology landscape.

Source: xStation