TSM/SPCX: TSMC Gains as Musk Confirms Terafab Talks, Intel Falls TSMC shares gain 3% in Taipei on Monday with sentiment boosted by discussions between the Taiwanese chip giant and Elon Musk’s Terafab on potential collaboration… The Taiwanese foundry giant may use Terafab as anchor client for a future Texas semiconductor factory, according to Tim Culpan’s Culpium newsletter. “TSMC is exploring ways to work with Elon Musk’s Terafab to help the startup chipmaker run its new semiconductor factories in Texas, my sources tell me,” wrote Culpan. Elon Musk said “Just discussions, but something may come of it” in response to a screenshot of the newsletter on X.

$NVDA $AMD $TSM - TSM CHIP TOOL NEEDS NEARLY DOUBLE AS AI DEMAND SURGES TSMC says its estimate for quarterly chipmaking-equipment purchases is now ~1.9x what it projected in December as it races to add capacity for AI demand. ▶️ The company is currently building and outfitting about 20 factories globally, versus a typical pace of just 4-5 at once, while also dealing with a shortage of experienced construction workers in Taiwan. ▶️ TSMC says customers including NVIDIA and AMD continue raising orders, and despite expanding at 4-5x its normal pace, it still can’t fully meet demand.

TSMC (2330, TSM) 3Q26 Summary - Growth intact, profitability less so ☕️ Earnings lukewarm, growth high, margins softer. • 3Q: Rev +16% QoQ / +41% YoY, GM 66.4% (slight miss), EPS NT$29.4
• 4Q guide: Rev $52.3–54.3bn (+14% QoQ / +58% YoY), GM 65–67% softer
• 2027: +39% YoY rev on strong AI demand
• Capex elevated; N2 capacity more than doubles in 2027, A14 ramps faster
• Faster A14 important for mobile customers facing recent SoC challenges in 2nm, but adds margin pressure to TSM
• Any Terafab collab would require TSMC to operate the fab (therefore -> unlikely to happen given Musk’s comments)
• Margins expected largely flattish through 2027–28 on dilution + overseas expansion 💰Slight EPS lift, TP nudged to NT$2,999 (20x 2027E). Hold Rating ! #TSM# #AI# #semi#

$TSM Analyst Insights Stifel reiterates a Buy rating on TSM with a $515 PT, implying ~12.4% upside from current levels. The view highlights stronger-than-expected Q3 revenue and potential Q4 guidance upside, supported by sustained AI and semiconductor demand. YTD growth is already ahead of the company’s full-year framework, while margin performance remains the key debate heading into the October 15 call. 🔹 Follow @tenet_research for more analyst insights on other tickers.

Abstracts of TSMC, ASML Earnings Notes TSMC (TSM) D/G to Hold, Taking the High Road in AI Cycle * Earnings & Guide: While TSMC’s Q2 earnings were inline (margin slightly below bulls), the company raised its full-year rev and capex. * The key highlight was taking the high road in margin management (by not to be aggressive in pricing), geo-expansion (by further capex investment in Arizona) and backend flexibility (by supporting customers’ backend at EMIB). * As said in our preview note on July 7, TSMC’s capex acceleration began in 2025, 1.5–2 years after the AI cycle took off, implying that share loss or demand overflow to competitors; that said, to catch up in capex in 2026-2027; together with prudent pricing, TSMC could be one of the few AI semi companies that won’t see margin expansion in coming quarters. This will lead to lower valuation multiple. ASML Earnings, Guidance Raised * Q2: ASML delivered a strong beat, with Q2 revenue of €9.3 billion and a 54% gross margin, exceeding guidance. * Guidance Raised: The company raised its full-year 2026 revenue outlook to €43–45 billion (from the previous €36–40 billion range). * Growth Drivers: Robust demand from both logic and memory customers. * Capacity Expansion: ASML announced plans to increase capacity by ~30% annually for both its EUV and DUV immersion systems through 2027, with potential further expansion in 2028. Stay positive #AI# #ASML# #TSM# #TSMC#

Weekly|AI4S, Gemini 4, TSM & ASML, MRVL and OCS, Muse, CRWV AI for science and a new training cycle, with capacity and optical interconnects in focus Google is back in the frontier race, and we think a new training cycle is beginning. As we argue in this week’s column, Gemini 4 is evidence that scaling still works; the next test is how much post-training improves coding and long tasks in Gemini 4.1. With OpenAI, Anthropic, Google, Meta and xAI all investing to defend or improve their positions, we remain bullish on the networking and optical interconnects needed to keep larger clusters productive. AI for science gives us another reason to be optimistic about where that compute can go. OpenAI’s latest mathematics release still needs independent scrutiny, but progress in problems with verifiable answers could help AI take on more research and engineering work. Drug discovery, materials and energy research offer much broader potential benefits. Physical experiments and clinical trials will still take time; our optimism is about expanding the ideas scientists can test and the connections they can make across disciplines. The supply chain is preparing for that investment. We see TSMC’s growth increasingly governed by how quickly capacity comes online, and have raised our ASML EUV shipment forecasts again. Marvell’s Investor Day targets are moving closer to our forecasts, backed by longer-term supplier planning. OCS adds another source of optical demand as content per accelerator rises, although deployment beyond Google remains an important assumption in our longer-term model. On the application side, we are watching retention and cost together. Muse’s improving retention gives Meta a reason to expand acquisition once the economics support it, while computer use opens a much larger pool of work to automation. Our expert interviews also underline the obstacles: high token consumption can limit enterprise adoption, and physical capacity still depends on manufacturing yields, equipment and power. Better models and more infrastructure need to translate into reliable, affordable work. This Week’s Reports Going the Way of Go: stronger models make the next training cycle worth watching. Our new column connects AI’s progress in mathematics and programming with Google’s return to the frontier, and explains why we remain optimistic about AI for science and optical interconnect demand. TSM & ASML: capacity expansion sets the pace. We expect TSMC’s advanced-node expansion to support further growth and now forecast ASML total EUV shipments of 100/125 units in 2027/28, as both logic and memory customers need more equipment. MRVL & OCS: more optical content as AI clusters grow. Marvell’s new targets move closer to our forecasts, while our OCS work points to more than $20b of annual demand by 2030, conditional on broader adoption that includes Nvidia from late 2028. META: Muse’s retention is improving before the next growth push. We expect adoption to advance in steps as Meta improves retention and balances user acquisition against the substantial compute cost of serving a personal agent. Computer use: a much larger market for AI providers. Our long-term framework points to roughly $1tn of additional annual revenue and automatable work equivalent to about 180mn full-time roles, an estimate of task hours rather than a forecast of layoffs. Premium Report Snapshot A portion of our research is reserved for Premium subscribers and is not distributed via Substack. Below is a snapshot of what Premium subscribers received this week beyond the Substack feed. Research | Personal Agents: Muse Becomes a Daily Assistant, but Shopping Faces Platform Restrictions Deep | CRWV: Capacity Expansion and Further Upside to Revenue per GW Deep | TWLO: How Much Can Twilio Earn When Agents Make Calls? Weekly Expert Interviews Summary A snapshot of the expert interviews we conducted during the past week is below; full transcripts and takeaways are available on the FUNDA platform. Anthropic: Computer-Use Economics and Enterprise Strategy Executive, Leading AI research & deployment company The expert sees high token consumption as a constraint on enterprise computer-use adoption and discusses whether protocol-based automation can improve the economics. FTAI Power: Execution Risks Behind the Expansion Target (FTAI) Manager, Leading Aviation Services Provider The expert questions the feasibility of 100 sets in 2027, citing Montreal space, dedicated staffing and supply-chain constraints that could push delivery into 2029–30. Memory: Supply Constraints and Customer Negotiations Former Procurement Manager, Global Cloud Technology Company The expert sees tight HBM and server DRAM supply supporting pricing, with phased negotiations and long-term agreements moderating increases rather than eliminating them. HVLP Copper Foil: High-End Capacity Remains Hard to Add Executive, Regional China Copper Foil Manufacturer The expert highlights finishing-equipment constraints and yield losses at higher grades and thinner gauges, leaving high-end supply tight even as lower-end HVLP faces potential oversupply. Trainium: Manufacturing Yields and Capacity Diversification (AMZN) Executive, a major hyperscaler The expert reports liquid-cooled rack first-pass yields of roughly 50% in Mexico, with alternative capacity also facing equipment lead times, licensing and power constraints. Enterprise AI: Spending Shifts Toward Core Platforms (OKTA, MSFT, CRM, NOW, MDB, SNOW) Strategy Executive, Top US telecom provider The expert sees AI spending favoring core security, cloud, database and workflow platforms while reducing overlapping point tools, with additional infrastructure spending following model adoption. Diagnostics: AI Security and Data Modernization (PANW, OKTA, CRWD, SNOW, TEAM) AI Executive, Mid-sized diagnostics firm The expert describes a sharp rise in AI security spending from a small base, alongside platform consolidation and Snowflake investment tied to data modernization and agent workloads. Detailed Report