TSMC has a high degree of dominance in advanced logic chip manufacturing. (Illustration, AFP)
[Financial Channel/Comprehensive Report] Global semiconductor stocks have been under intense selling pressure recently, with the Philadelphia Semiconductor Index falling 17% since the beginning of October. However, as leading semiconductor companies have successively released operating data, different voices have begun to emerge in the market. Foreign media "The Motley Fool" analyzed that judging from TSMC's latest revenue performance, the demand for AI infrastructure has not cooled down. This wave of semiconductor stock corrections may have gone too far. Instead, it provides investors with bargain hunting opportunities. Among them, TSMC and ASML were named as two major targets worthy of attention.
According to the latest data released by TSMC, revenue in October 2026 will increase by nearly 60% compared with the same period last year, and growth momentum continues to accelerate. The annual growth rates of revenue in July, August and September this year reached 45%, 53% and 55% respectively, showing that AI-related demand continues to drive up the foundry business.
TSMC also stated at its October conference that customer demand continues to show strong and long-term growth, driven by the increasing popularity of agent-based AI and open source AI models. Company management believes that as AI infrastructure continues to expand, the importance of semiconductors in the global supply chain will further increase.
According to statistics in the first 10 months of 2026, TSMC's revenue has increased by 43.3% compared with the same period last year. Foreign media believe that the recent revenue growth has accelerated, and the annual revenue growth rate has the opportunity to exceed the original target of 44%. In addition, the market's expectations for TSMC's long-term earnings per share (EPS) growth have also been significantly revised upward this year.
Although TSMC's stock price has suffered a double-digit decline since early October, its current estimated price-to-earnings ratio is about 18 times, which makes its valuation attractive in comparison. Foreign media believe that as the demand for AI chips continues to be strong, the recent stock price retracement may be an opportunity for investors.
In addition to TSMC, another company that has benefited from the expansion of AI infrastructure is Asmore, the global semiconductor equipment leader. TSMC's management pointed out last month that the company's capital expenditures this year are expected to reach US$60 billion to US$64 billion, significantly higher than the US$40.9 billion in 2025, and capital expenditures from 2026 to 2028 will be significantly higher than the past three years.
TSMC's continued expansion of capital expenditures means that the demand for advanced process equipment will also increase, and ASML is an important beneficiary. The extreme ultraviolet (EUV) lithography equipment produced by the company is an indispensable key tool for TSMC to manufacture advanced AI chips.
However, ASML's stock price has also been affected by the recent selling pressure on semiconductor stocks, falling more than 15% since the beginning of October. The current estimated price-to-earnings ratio is about 23 times, lower than the average of 32.5 times over the past five years. Foreign media pointed out that ASML's earnings per share increased by 136% in the third quarter of this year, but the stock price evaluation fell instead, which may form a good investment opportunity for long-term investors.
More importantly, ASML expects that demand for wafer manufacturing equipment will continue to be strong in the next few years, even exceeding current production capacity. The company plans to increase the production of EUV lithography systems by 30% in 2027 and evaluates further expansion of production in 2028, which may increase by more than 30%.
Because ASML has an exclusive position in the EUV lithography equipment market and has certain pricing power, coupled with the continued increase in capital expenditures by major customers such as TSMC and the continued expansion of global AI infrastructure investment, the market is also more optimistic about its long-term growth prospects.
