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The board approved a plan to invest as much as $1 billion into Anthropic and OpenAI, the two leading developers of artificial intelligence models. While the company already makes the physical chips that power these models, this move gives it a direct financial stake in the software side of the AI boom.
This is a strategic shift for a company that has historically focused strictly on being a foundry, a factory that builds chips for others rather than designing its own. By backing the industry's most influential model makers, the company is ensuring it stays at the center of the AI ecosystem as both a vital supplier and a partner to the firms driving future demand.
Source: WSJ
The company reported that sales in October grew nearly 60 percent compared to the same month last year. This monthly update shows that the massive demand for high-end chips, which power everything from smartphones to artificial intelligence, is not slowing down.
While monthly numbers can be lumpy, the 15 percent increase from just last month suggests that production at its newest factories is ramping up smoothly. As the primary manufacturer for companies like Apple and Nvidia, these figures confirm that the company remains the essential engine for the global tech industry.
Source: CNBC
The Taiwan Semiconductor Industry Association, which represents TSMC and its local peers, voiced support for the government to consider restarting nuclear power plants. Making advanced chips requires a massive and constant supply of electricity, and any risk of power shortages in Taiwan is a direct threat to TSMC's production lines.
While the company is building factories in other countries, the vast majority of its most advanced manufacturing remains in Taiwan. A shift toward nuclear energy would provide a more stable power grid for these energy-hungry plants, helping the company avoid the costs and delays that come with power instability.
Source: Reuters
New orders for US-made capital goods, which are the physical tools and equipment businesses use to operate, rose in September. Shipments of these goods also picked up speed, which is a sign that business spending remained healthy through the third quarter.
This is a good sign for TSMC because it sits at the very beginning of the global technology supply chain. When American companies spend more on high-end equipment and hardware, it eventually translates into more orders for the advanced processors that TSMC alone can manufacture at scale.
Source: Reuters
After TSMC reported its October results, we updated our fair value. We changed our rating from Buy to Watch. We raised our long-term growth assumptions and added the capacity constraints in advanced chip packaging to what we track. We also added the possibility of dedicated factories for single large customers to our model and reset our projections for the most advanced chip technology.
Management consistently sets a high bar and then clears it, with seven beats in the last eight quarters showing the business is outrunning even bullish forecasts.
| Expectation | |
|---|---|
| EPS | $5.17 |
| Revenue | $52.71B |