Key Takeaways
- Taiwan Semiconductor Manufacturing Co. (TSM) reported robust October 2025 revenue of NT$367.47 billion ($11.86 billion), marking a 16.9% year-on-year increase, primarily driven by persistent demand for AI chips.
- Despite the strong growth, some reports characterize it as a slowing pace compared to previous quarters, though this is largely attributed to production constraints, particularly in CoWoS packaging, rather than a moderation in underlying AI demand.
- Japanese Prime Minister Sanae Takaichi has urged the Bank of Japan (BOJ) to maintain close policy cooperation with the government and to guide monetary policy towards achieving a stable 2% inflation target supported by wage growth.
- Takaichi emphasized that the government holds the ultimate responsibility for economic policy, with the BOJ's monetary policy forming a part of that, and stated that Japan is still "halfway" to achieving sustainable inflation with wage increases.
- The BOJ faces a complex situation, with policymakers seeing a growing case for a near-term rate hike, while real wages have declined for nine consecutive months, lagging inflation, complicating the path to demand-driven price stability.
Taiwan Semiconductor Manufacturing Co. (TSM), the world's largest contract chipmaker, announced its October 2025 revenue reached approximately NT$367.47 billion ($11.86 billion), representing a 16.9% increase year-on-year. This strong performance underscores the continued robust demand for semiconductors, particularly those fueling the artificial intelligence (AI) boom. TSMC is a critical supplier to major AI players like Nvidia (NVDA), whose CEO, Jensen Huang, reportedly requested increased chip supplies, signaling sustained high demand.
While the October revenue figures indicate significant growth, some analyses suggest a slowing growth rate compared to prior quarters, marking its slowest year-on-year increase since February 2024. However, this moderation is largely attributed to production constraints, especially bottlenecks in advanced CoWoS packaging, rather than a weakening in overall AI demand. TSMC's management views AI-related chip production as a structural, long-term driver, with capacity expected to remain "very tight" through 2025. Analysts anticipate TSMC's sales to rise 27.4% in the current quarter, reinforcing a positive outlook for the company.
Meanwhile, in Japan, Prime Minister Sanae Takaichi has articulated her administration's economic policy stance, urging the Bank of Japan (BOJ) to maintain close cooperation with the government. Takaichi emphasized the importance of guiding monetary policy towards achieving a stable 2% inflation target that is sustainably supported by wage growth, rather than just cost-push factors. She stated that Japan is currently "halfway" to achieving this goal.
The Prime Minister asserted that the government holds the ultimate responsibility for economic policy, with the BOJ's monetary policy being an integral part of this broader framework, though specific policy tools remain at the central bank's discretion. Takaichi's administration is set to finalize an economic stimulus package by November 21, which is expected to encourage the BOJ to prioritize strong economic growth alongside price stability, indicating a preference for maintaining low interest rates to support the ongoing recovery.
The BOJ, however, faces a challenging environment. Policymakers have noted a growing case for a near-term interest rate hike, with some members stressing the need to confirm sustained wage-hike momentum. This comes as real wages in Japan have fallen for nine consecutive months, declining by 1.4% year-on-year in September, as inflation continues to outpace pay gains. This persistent erosion of purchasing power complicates the BOJ's efforts to achieve demand-driven inflation and could influence the timing of any future rate adjustments.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.