Key Points

• TSMC Extends AI-Led Growth Streak: Taiwan Semiconductor posted a 39% profit surge to record levels, raising its 2025 revenue forecast as demand for advanced AI and 5G chips drives continued semiconductor sector leadership.
• U.S. Expands Tech Security Crackdown: The FCC moved to expel Hong Kong telecom giant HKT from U.S. networks over national security risks, deepening the tech and communications rift with China.
• Washington Holds Firm Amid Market Swings: Treasury Secretary Scott Bessent reaffirmed that stock market volatility will not alter U.S. trade policy toward China, emphasizing long-term economic strategy over short-term sentiment.
• Oil Rebounds on India-Russia Trade Shift: Crude prices rose 1% after President Trump said India would halt Russian oil imports, signaling potential supply tightening amid broader geopolitical and sanction pressures.

TSMC Posts Record Profit as AI Demand Fuels 39% Surge

Taiwan Semiconductor Manufacturing Co. reported a 39% year-on-year jump in third-quarter profit to NT$452.3 billion, surpassing estimates on the back of surging demand for artificial intelligence chips.

Revenue rose 30% to NT$989.9 billion, marking another record as high-performance computing—driven by AI and 5G applications—accounted for 57% of total sales.

Advanced chips sized 7nm or smaller contributed 74% of wafer revenue, underscoring TSMC’s technological dominance.

The company raised its 2025 growth forecast to the mid-30% range and lifted its capital spending target to $40 billion, reflecting sustained momentum from clients including Nvidia and Apple.

U.S. Targets Hong Kong’s HKT Over Security Concerns

The U.S. Federal Communications Commission has moved to bar Hong Kong telecom giant HKT Trust and HKT Ltd from interconnecting with American networks, citing national security risks linked to China.

The FCC’s action mirrors earlier bans on China Telecom and China Unicom and reflects a broader strategy to isolate Chinese-linked entities from U.S. critical infrastructure.

HKT, a subsidiary of PCCW—partially owned by China Unicom—has been asked to justify why its authorizations should remain valid. Shares of HKT fell over 5% in Hong Kong trading, while PCCW dropped 3.6%, underscoring market unease as U.S.-China tensions deepen.

U.S. Treasury Signals Resolve Amid Market Volatility

Treasury Secretary Scott Bessent reaffirmed that the U.S. will not alter its trade stance toward China despite recent stock market turbulence, emphasizing that policy decisions are driven by long-term economic priorities rather than market swings.

Speaking at CNBC’s Invest in America Forum, Bessent dismissed reports that Beijing is betting on a U.S. market downturn to force concessions, calling such claims “baseless.”

His remarks followed a volatile week in equities, driven by President Trump’s tariff threats and China’s rare earth export curbs. Bessent underscored that Washington remains focused on structural policy strength, particularly capital investment and AI-led growth.

Oil Climbs 1% After Trump Says India Will Cut Russian Imports

Oil prices edged higher Thursday after U.S. President Donald Trump said India pledged to halt oil purchases from Russia, a move that could tighten global supply and bolster Washington’s sanctions campaign.

Brent crude rose 0.9% to $62.47 per barrel, while WTI gained 1% to $58.85, rebounding from multi-month lows triggered by U.S.-China trade tensions and a bearish IEA outlook.

India, which sources about a third of its crude from Russia, later emphasized energy stability and supply security, suggesting only gradual cuts.

The UK also expanded sanctions on Russian energy firms, adding further geopolitical pressure to the market.

Conclusion

Markets remain caught between strong corporate fundamentals and mounting geopolitical headwinds.

TSMC’s record earnings underscore the sustained momentum of the global AI and semiconductor cycle, even as Washington expands its technology security measures against Chinese-linked firms.

Treasury Secretary Bessent’s remarks signal that the U.S. will maintain its economic stance regardless of market volatility, while energy markets are recalibrating after Trump’s comments on India’s Russian oil imports.

Investors face a complex environment where policy, trade, and technology continue to intersect — requiring disciplined positioning and vigilance as global supply chains and monetary expectations evolve heading into year-end.

Investment Insights

• AI and Semiconductor Leadership: TSMC’s record profits reaffirm the structural demand for advanced chips, reinforcing long-term positioning in AI, 5G, and semiconductor infrastructure plays.
• Tech and Telecom Scrutiny: The FCC’s latest action highlights rising regulatory and geopolitical risk across communications and technology sectors — investors should expect heightened compliance costs and regional fragmentation.
• Policy Over Market Noise: U.S. policymakers’ focus on strategic outcomes over short-term market reactions suggests continued volatility; investors should prioritize fundamentals and policy-driven sectors.
• Energy Market Realignment: Potential reductions in Russian oil flows and new sanctions signal renewed price support for crude, benefiting diversified energy and logistics exposures.

Economic Calendar