TSMC’s sales jump almost 60% in a month, the clearest number yet that the AI spending boom has not slowed

If the artificial intelligence boom is cooling, nobody has told the factory. TSMC said on Tuesday that its revenue for October was about NT$586.89 billion, up 59.7% from October last year.

The figure was also 14.7% higher than September’s NT$511.86 billion, and comfortably the largest of any month this year. The previous high for 2026 was August, at about NT$514.8 billion.

Why does one company’s monthly sales matter?

Because almost every advanced chip passes through it. TSMC does not sell products under its own name. It manufactures the processors designed by the biggest names in technology, including the chips that train and run AI systems, and it reports its sales every month. That makes its revenue one of the fastest and hardest readings available on whether the technology industry’s enormous AI spending is real.

Tuesday’s number says it is. For the first ten months of the year TSMC took in NT$4,485.62 billion, 43.3% more than in the same stretch of 2025.

Converted at recent exchange rates, October alone was worth roughly US$18 billion. That is about A$26 billion, close to Qantas’s revenue for an entire year.

What is driving it?

Demand for the most advanced chips, as large technology companies keep building data centres for AI. In the September quarter, chips made on TSMC’s 7-nanometre and more advanced processes accounted for 79% of its wafer revenue, and its newest 2-nanometre technology already made up 8%.

Chief financial officer Wendell Huang said last month that the company expected the December quarter to be supported by continued strong demand for its leading-edge technologies, including what he called “the steep ramp-up” of 2-nanometre production.

Taiwan’s wider economy shows the same pull. The island’s exports rose 58.9% in October from a year earlier to US$96.76 billion, with electronic components up 61.4%.

How profitable is this?

Extremely. In the three months to September, TSMC reported revenue of NT$1,494.24 billion and net income of NT$763.06 billion, up 68.7% on a year earlier. Its gross margin was 66.4%, meaning about two-thirds of every dollar of sales was left after the cost of making the chips.

For the current quarter it has forecast revenue of between US$52.3 billion and US$54.3 billion. October’s result puts it on track for that range. The company has also said its capital spending from 2026 to 2028 will be significantly higher than in the previous three years.

Why does this matter outside Taiwan?

The past week has rattled confidence in AI stocks. Nvidia, one of TSMC’s best-known customers, has lost value amid a scandal involving its chief executive, and investors have been debating whether the sector’s valuations have run ahead of reality.

TSMC’s figures do not settle the valuation argument, but they do answer the demand question: orders for the chips themselves are still growing at a pace rarely seen in a company this size. TSMC shares closed 2.24% higher in Taipei on Tuesday.

For Australians, the exposure is indirect but real. Global technology shares are among the largest holdings in many superannuation funds’ international portfolios, and the data centres being built across Australia depend on the same chips.

There is a risk on the other side of the ledger too. The more of the world’s computing that depends on one company’s factories, most of them on one island, the more any disruption there would be felt everywhere.