Latest From Taiwan Semi Is Very Constructive for Several Holdings

When it comes to several positions in the Portfolio, one of the key companies in the collective food chain that we follow closely is Taiwan Semiconductor (TSM) .

While the company reports monthly revenue, and tallying those reports for the September 2025 quarter implied a 30% year-over-year revenue increase for the company, Thursday morning’s earnings report for the period brings supporting color, including end market breakdown for those figures.

Breaking down those figures, what we find is very constructive for our holdings. TSM’s largest end market, High Performance Computing (HPC), which reflects AI and data center chip demand, grew a staggering 57.4% year over year even after lapping the year-over-year gain of more than 65% in the September 2024 quarter. Sequentially, HPC revenue rose 4.6% but again on the back of tough year-over-year comps. Those growth metrics speak to the rising spending that flows through to Nvidia (NVDA) and Marvell (MRVL) .

End market revenue from TSM’s smartphone business, its second largest, grew 22.3% sequentially in the September 2025 quarter, confirming market seasonality but also the factors that led us to lift our price target for Apple (AAPL) to $275 earlier this week. The figure that showed the improving demand profile in the smartphone market was the 24% year-over-year jump in TSM’s smartphone revenue. That’s another nice signal for AAPL shares, but those collected data points also support our Qualcomm (QCOM) and Universal Display (OLED) holdings.

Rounding out TSM’s end market exposure, IoT and Auto revenue both grew 10% quarter over quarter, but Auto posted a very nice 40% gain compared to year-ago levels. We see those figures given credence to Qualcomm’s revenue diversification strategy, especially when we include the recent quarterly PC shipment figures from IDC.

So far, we’ve talked about the September quarter and now let’s turn to TSM’s outlook and share that it sees current quarter revenue between $32.2 billion to $33.4 billion, up 20% to 24% year over year. Here too, let’s keep in mind TSM is lapping a strong 37% year-over-year total revenue growth figure in the December 2024 quarter.

Given the timing of new smartphone models hitting the market, we are likely to see that end market growth rate accelerate, but indications on TSM’s earnings call signal anything but a slowdown in AI and data center demand. Per the management team, its “conviction in the AI mega trend is strengthening,” and demand is stronger than it thought it would be three months ago. For now, TSM continues to see a mid-40% compound annual growth rate for AI chips through 2029 but plans on updating that figure in January when it reports its December quarter results.

More Pro Portfolio

At the time of publication, TheStreet Pro Portfolio was long NVDA, MRVL, AAPL, QCOM and OLED.