TSMC (NYSE:TSM | TSM Price Prediction) started the week strong, reporting a 36% jump in quarterly sales, with June monthly revenue reaching roughly 442 billion Taiwan dollars, up 67.9% year over year. Even as the MSCI Asia Pacific index slid between 1.88% and 2.23%, TSMC shares climbed nearly 2%. Memory names moved the other direction, with SK Hynix falling 13% in the same session.
On Bloomberg “Daybreak Europe,” host Oliver Renick and Winnie Hsu framed the split as the story of the day. Hsu summarized the tone: “The bright spot is TSMC, stocks here up almost 2%. Taiwanese stocks were closed last week due to the typhoon, but trading is back online today, and we can expect June sales to be released later today.” Taiwanese markets had been shut the prior week due to a typhoon, with earnings expected later in the week.
AI Foundries Are Booming While Memory Stocks Get Crushed
Memory chip stocks led Asian tech shares lower amid oversupply concerns and profit-taking, while foundries serving AI customers benefited from steady long-term demand. That distinction matters for U.S. investors because TSMC manufactures the flagship AI accelerators designed by NVIDIA and AMD, while both chipmakers rely on suppliers such as SK Hynix for HBM memory.
TSMC’s N3 production capacity is reportedly sold out, and the company is building three advanced packaging facilities in Phase II of Chiayi Science Park. Together, the facilities are expected to generate more than NT$300 billion in annual output and create 9,000 jobs.
NVIDIA Remains TSMC’s Most Important AI Customer
NVIDIA (NASDAQ:NVDA) sits at the top of the TSMC customer stack. In its Q1 FY2027 report on May 20, 2026, NVIDIA posted non-GAAP EPS of $1.87 versus $1.77 expected, on revenue of $81.61B, up 85.2% year over year. CEO Jensen Huang has described the AI factory buildout as “the largest infrastructure expansion in human history.”
Wall Street continues to lean bullish. Morgan Stanley reiterated an Overweight rating with a $288 price target, citing four drivers: AI labs, hyperscalers, sovereign AI, and neocloud demand. Shares are up about 28.72% over the past year.
On the day of the TSMC news, NVIDIA traded down 1.99% to $206.77, tracking the broader Asia weakness rather than the foundry good news.
For readers looking to understand the broader capital cycle, our Free Report: 7 Stocks Powering the AI Boom explains how this infrastructure spending ripples through names beyond NVIDIA.
AMD Is Building Its Own Multi-Gigawatt AI Pipeline
AMD (NASDAQ:AMD) is the other major TSMC AI customer. Q1 2026 non-GAAP EPS came in at $1.37 versus $1.29 expected, a 6.2% surprise, on revenue of $10.25B. Data Center revenue rose 57% year over year, with CEO Lisa Su citing accelerating AI infrastructure demand as the primary driver. Multi-gigawatt commitments from OpenAI and Meta on the MI450 series underpin the roadmap.
Shares are up 160.5% year to date and 286.99% over the past year. On the TSMC news day, AMD dropped 2.64% to $543.14. TradingKey attributed the pullback to sector-wide semiconductor volatility and anxieties about AI capex slowdowns. Analysts remain constructive, with 42 Buy ratings, 9 Holds, and an average target of $516.12.
TSMC’s Earnings On Thursday Could Reveal Whether AI Demand Is Still Supply-Constrained
TSMC’s earnings report on Thursday could offer the clearest signal yet of whether AI chip demand continues to exceed available supply. TSMC’s reportedly sold-out N3 capacity points to continued strength in demand for advanced chips.
Investors should also watch whether the memory selloff begins to pressure HBM pricing. Any meaningful shift could affect the cost structure of NVIDIA’s Blackwell chips and AMD’s Instinct accelerators, making TSMC’s outlook an important read on the health of the broader AI supply chain.
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