TSMC's Record Revenue Falls Flat... AI Semiconductor Stocks See Widespread 'Sell-off'

▲ TSMC, Artificial Intelligence (AI), Semiconductor/AI-generated image

Although TSMC (Taiwan Semiconductor Manufacturing, TSM) achieved record-high revenue, AI semiconductor stocks faced a sell-off.

According to Barron's on September 10 (local time), TSMC's August revenue reached 514.8 billion New Taiwan Dollars. This was a 53% surge compared to the same month last year, setting a new monthly record. In US dollar terms, it amounts to approximately $16.3 billion. However, its American Depositary Receipts (ADRs) fell 2.2% in early trading.

Analysis suggests that as the AI boom continues, the market has become accustomed to TSMC's steep revenue growth. According to market research firm TrendForce, global semiconductor foundry revenue increased to $53.5 billion in the second quarter. TSMC accounted for 75% of the total revenue.

TSMC's overwhelming market share is also boosting its pricing power. Barron's pointed out that high market share and record revenue provide TSMC with significant pricing leverage. Conversely, for semiconductor design companies that rely on TSMC for production and packaging, this could lead to increased cost burdens.

The possibility of price increases also pressured investor sentiment for semiconductor stocks. Barron's reported that TSMC is reportedly planning to raise prices by up to 10% starting next year. Shares of AMD, Broadcom (AVGO), and Nvidia (NVDA) also fell that day. Brent crude futures approached $105 per barrel, and bond yields also rose.

Despite TSMC's record-high revenue, AI semiconductor stocks failed to rebound, shifting the market's focus from performance growth to heightened expectations and cost burdens.

[Key Article Summary]

-TSMC's August revenue reached a record high of 514.8 billion New Taiwan Dollars, a 53% increase year-over-year.

-TSMC accounted for 75% of global foundry revenue in Q2, but its American Depositary Receipts fell 2.2% in early trading.

-Amid reports of a potential price hike of up to 10% next year and rising oil prices and bond yields, AMD, Broadcom, and Nvidia also showed weakness.

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