AI Chip Market Volatility and Taiwan Semiconductor’s Record Performance
AI chip stocks faced significant declines in October, with Micron Technology down by approximately 32%, and Broadcom also dipping around 24% from its 52-week high. Major players like Nvidia saw a 12% drop as competitors such as Chinese AI lab DeepSeek and OpenAI began developing custom AI chips to lessen reliance on existing leaders.
Despite the market turmoil, Taiwan Semiconductor Manufacturing Company (TSMC) reported a 77% year-over-year increase in net income during the second quarter of 2026, totaling $40.2 billion in revenue, with a gross margin of 67.7%. Management projected third-quarter revenue between $44.6 billion and $45.8 billion, equating to a year-over-year growth of around 37%, and raised its 2026 revenue growth forecast to just over 40%.
While TSMC manufactured 12,682 products for 534 customers in 2025, its strong positioning in leading-edge chip manufacturing remains vital amid rising competition. The ongoing geopolitical risks and TSMC’s planned capital spending of $60 billion to $64 billion may affect margins, but its capacity to produce cutting-edge silicon is crucial for AI demand.
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