TSM Posts Record Sales Amid AI Semiconductor Boom, Raising Pricing Power Concerns for Nvidia
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) reported record August revenue of NT$514.81 billion, up 53.3% year-over-year and 10.1% from July. The first eight months of the year saw a 39.3% increase in total revenue to NT$3.39 trillion, reflecting strong demand for AI accelerators and advanced chips. This bodes well for NVIDIA Corporation (NASDAQ:NVDA), which benefits significantly from this trend. However, TSM's growing dominance as a foundry is also giving it pricing power over key customers like Nvidia, AMD, and Broadcom. Reports suggest that TSM may raise chipmaking prices by up to 10% in 2027, potentially increasing costs for companies reliant on its manufacturing services. Hedge funds have increased their holdings of both stocks during Q2, with more than 249 hedge funds now holding TSM and over 285 owning Nvidia. Despite this bullish sentiment, short interest remains low at around 0.6% for TSM and 1.2% for Nvidia.
