Foundry & Contract Fabrication

Taiwan Semiconductor Manufacturing reported record Q3 2026 revenue of about NT$1.49t, with September alone at NT$511.86b, driven by demand for chips used in AI workloads. Management highlighted advanced packaging services for AI accelerators as a key contributor to the quarter, and said leading edge capacity is fully booked through 2026. TSMC also agreed a multi year, US$2b silicon interposer supply arrangement with GlobalFoundries that includes the first U.S.-based silicon interposer production for its packaging, extending its CoWoS packaging supply chain into the United States and spreading manufacturing risk. The company is supporting a US$64b capex plan, and investors will watch whether it can ease advanced packaging constraints and how much of that spend translates into stable utilization and revenue progress through and after the Malta ramp toward 2028.

Taiwan Semiconductor Manufacturing reported second-quarter 2026 revenue of NT$1,270.38 billion, up 36.0%, with net income and diluted earnings per share both climbing 77.4%. Advanced technologies of 7-nanometer and smaller accounted for 77% of wafer revenue, with the 3-nanometer node at 30% and 5-nanometer at 33%, while gross margin reached 67.7%, operating margin 60.3%, and net profit 55.6% of revenue. September revenue came in at about NT$511.86 billion, up 54.6% year over year, following August's 53.3% gain, and first-nine-month 2026 revenue rose 41.1%. Management guided third-quarter revenue to between US$44.6 billion and US$45.8 billion, versus US$40.20 billion in the second quarter, but projected gross margin of 65% to 67% and operating margin of 56% to 58%, both below second-quarter levels, as the 2-nanometer process ramps up after contributing 3% of wafer revenue in the second quarter. At a forward P/E of 28.44 as of October 6, above its 5-year average of 21.78 and the sector's 23.74, TSMC trades at a premium, with EPS expected to rise 30.04% in 2027.

Wedbush Securities said Taiwan Semiconductor's stronger-than-expected third-quarter sales are a good sign for the chipmaker's fourth quarter. Taiwan Semiconductor, the world's largest contract chipmaker, reported record third-quarter revenue of NT$1.49T, or $46.71B, up 50% year-over-year, exceeding the LSEG SmartEstimate of NT$1.46T and the company's own guidance of $44.6B to $45.8B. Wedbush analyst Matt Bryson wrote in a note to clients that the result represents a slightly larger than typical beat, noting that upside last quarter totaled about 1%, and that with revenue ahead of the range and the exchange rate essentially in line with the 32.0 TWD/USD embedded in the outlook, gross margins will likely at least meet the 66% midpoint of TSMC's 65% to 67% guidance and more likely exceed his 66.0% estimate. Bryson, who has an Outperform rating on Taiwan Semiconductor and a NT$3,000 price target, added that given TSMC's near monopoly position in cutting edge fabrication, with all major AI paths currently reliant on TSMC, he continues to see the stock as one of the best and safest ways to invest in a future dominated by AI. Taiwan Semiconductor is scheduled to release its full third-quarter financial results and provide updated guidance on Oct. 15.

Tesla and SpaceX have committed an initial $16.8 billion to Terafab, Elon Musk's plan to build one of the world's largest chip-making complexes in Grimes County, Texas, covering more than 100 million square feet and expected to start manufacturing chips by 2029. Intel Corp. joined the project in April, committing to design, make and package chips, and Musk has said the plant will use Intel's next-generation 14A process, a significant boost for an Intel foundry business that lost more than $10 billion at the operating level in 2025. Musk shut down speculation that Taiwan Semiconductor would help run the Texas plants, writing on X that Tesla and SpaceX will build and run the fab themselves, with TSMC at most given leased space inside the complex. The vertically integrated facility is designed to handle chip manufacturing, packaging and testing under one roof, with chips mostly built for edge computing and inference to power Tesla's Optimus robots and Cybercabs along with high-performance processors for SpaceX's planned space-based data centers. Investors positioned for the buildout could look to chip equipment makers such as ASML Holding, Applied Materials, Lam Research and KLA Corp, packaging and testing players including Amkor Technology, ASE Technology and Teradyne, materials and utilities suppliers such as Linde and Entegris, power and electrical infrastructure names including Eaton, Vertiv, Quanta Services and GE Vernova, or semiconductor ETFs such as the VanEck Semiconductor ETF and iShares Semiconductor ETF.

Taiwan Semiconductor Manufacturing Co has signed a $2 billion multi-year supply agreement with GlobalFoundries Inc to manufacture silicon interposers in the United States, sending GlobalFoundries shares up 4% in premarket trading on Thursday. Under the deal, GlobalFoundries will provide manufacturing services from its Malta, New York facility to support TSMC's Chip-on-Wafer-on-Substrate advanced packaging ecosystem, adding fabrication capacity at the site to scale advanced packaging solutions across multiple product generations while integrating embedded deep trench capacitor components. The partnership carries an initial five-year term with an underlying framework to expand production capacity over time as customer demand increases. The move addresses a critical bottleneck in the semiconductor supply chain, as high-performance computing and AI hardware increasingly rely on sophisticated packaging techniques to link memory and logic chips, with volume production at the Malta facility expected to begin ramping during the first half of 2028. For GlobalFoundries, the partnership validates its footprint in trusted U.S. manufacturing while positioning the foundry as an indispensable partner to the world's leading chipmaker.

Taiwan Semiconductor Manufacturing Company, or TSMC, the world's largest contract chipmaker, said on October 8 that its third-quarter revenue soared to a record NT$1.49 trillion, or about $46.71 billion, jumping 50% from a year earlier and beating market expectations, driven by red-hot demand for chips used in artificial intelligence processing. Actual revenue also came in above TSMC's own guidance of $44.6 billion to $45.8 billion given at its July earnings conference. For September alone, TSMC reported revenue rose 54.6% year on year to NT$511.86 billion. However, TSMC did not disclose further details or any business outlook in its brief monthly revenue filing. The company is scheduled to report full third-quarter results and financial statements next Thursday, October 15, when it will also unveil its business outlook and operating plans for the current quarter and the remainder of the year. Meanwhile, LSEG SmartEstimate projects that TSMC will report third-quarter net profit surging 64% year on year to NT$740.8 billion. In Taipei stock market trading today, TSMC shares closed down 1.35% ahead of the revenue figures, in line with the broader Taiwan market, which ended 0.99% lower.

Samsung Electronics reported third-quarter operating profit up nearly ninefold to 107.4 trillion won, or about 80.1 billion dollars, a record high, while revenue more than doubled. The figures still fell slightly short of the analyst average estimate. Taiwan Semiconductor Manufacturing Co., or TSMC, reported record third-quarter revenue of 1.49 trillion Taiwan dollars, or about 46.71 billion dollars, up 50% from a year earlier and above market expectations. LSEG SmartEstimate, which compiles estimates from 19 analysts, had forecast revenue of 1.46 trillion Taiwan dollars, compared with 989.92 billion Taiwan dollars a year earlier. Despite the record results, Samsung shares fell 2.4% in the South Korean stock market, and shares of suppliers in the Japanese market such as Tokyo Electron, Advantest and Ibiden also declined, amid concerns over how long AI investment reliant on rising debt financing can continue as global borrowing costs climb. Demand for high-bandwidth memory chips, or HBM, used with Nvidia Corp.'s AI accelerator chips has benefited Samsung, SK Hynix and Micron Technology. Counterpoint Research raised its forecast for third-quarter DRAM chip prices to a 10% to 20% rise from the previous quarter, up from 5% to 10%, after customers rushed orders. Analysts at Citigroup expect HBM4 chip prices to rise 100% to 150% next year, even though Citigroup cut its full-year profit estimates because of the stronger South Korean won. Analysts expect Samsung's chip business to post operating profit of 110 trillion won, with the company due to release full financial results on October 29.

Lisa Su, chief executive officer of U.S. semiconductor giant AMD, said on the 7th that the company is continuing to explore opportunities for partnership with Samsung Electronics in its memory and foundry businesses. Speaking to reporters during a visit to Seoul, Su said she had met with executives of SK Hynix and planned to meet with executives of Samsung Electronics as well. Amid tightening supply of semiconductor memory, she explained that AMD is working with customers to optimize its memory footprint so it can meet more computing demand going forward, and said the company is urging memory suppliers to build out production capacity faster and as quickly as possible. We rely heavily on the South Korean supply chain, and Samsung and SK Hynix are key to achieving our broad goals in data centers, she added. Su also said data center demand overall remains very strong, with signs of robust demand across AMD's entire product portfolio.

Jim Cramer told a caller on the October 1 lightning round of Mad Money that he likes Taiwan Semiconductor Manufacturing Company and advised buying the stock. The endorsement came as TSMC reported second-quarter revenue of $40.20 billion, up 33.7% year-over-year in U.S. dollar terms, with net income rising 77.4% to NT$706.56 billion and a gross margin of 67.7%. Advanced technologies at 7 nanometers and below generated 77% of wafer revenue, and August revenue reached approximately NT$514.81 billion, up 53.3% from a year earlier, bringing first-eight-month revenue up 39.3% to approximately NT$3.39 trillion. Management raised its 2026 capital expenditure budget to $60 billion to $64 billion, while warning that the initial 2-nanometer ramp will cut second-half gross margin by roughly 3 to 4 percentage points and that overseas factories will dilute margins by 2 to 3 points early on, potentially widening to 3 to 4 points. For the third quarter, the company guided to revenue of $44.6 billion to $45.8 billion and gross margin of 65% to 67%, below the second-quarter level despite higher expected sales.

Taiwan Semiconductor Manufacturing Company shares touched intraday all-time highs on Monday after Elon Musk confirmed early-stage talks with the chipmaker about a potential collaboration on his Terafab semiconductor initiative. Musk responded on X over the weekend to a newsletter from tech journalist Tim Culpan, who wrote that TSMC is exploring ways to work with Terafab to help the startup chipmaker run its new semiconductor factories in Texas, saying, "Just discussions, but something may come of it." Terafab is Musk's plan to build a giant semiconductor factory to serve Tesla, SpaceX, and xAI. US chip maker Intel, which joined Terafab back in April, was down roughly 2%. TSMC is the world's largest foundry, and its business has boomed on demand for semiconductors used in artificial intelligence, with the stock up about 60% year to date as the company expands in the US to manufacture chips for clients including Apple, Nvidia, and AMD.

GF Securities expects United Microelectronics to post stronger earnings per share over the next two years on a combination of stronger prices and margins, supported by rising orders from key clients that are lifting utilization rates at its foundry. Analyst Jeff Pu said 12-inch utilization should reach about 93% by end-2026 on strong DDIC volumes from Novatek and Samsung LSI at 22/28nm and Apple's Mac at 55/65nm, with upside from Sony's sensors, while 8-inch utilization should reach about 90% by end-2026 and full loading by 2H27 on intact demand for datacenter PMIC, MCU and embedded memory. Pricing momentum extends from 2H26 for selective customers into 1H27 at 10-30% across 12-inch and 8-inch, and into 2H27 where negotiations are ongoing, suggesting visibility extending into 2H27. GF Securities raised its EPS forecasts for the entirety of 2026 and 2027 by 2% and 8% respectively and maintained its Buy rating, with UMC expected to begin another growth phase in 2028 when it transitions to asset-light FinFET and optical full solutions, driven by Intel 2nm as a major inflection. Interposer and advanced packaging are expected to begin contributing during the second half of 2027, supported by silicon capacitor, DTC, hybrid bonding and controller-to-bonding integration. UMC shares were down 8% in pre-market trading on Monday, but the stock has surged 32% over the past month and more than 230% year-to-date.

Rapidus, which aims to mass-produce advanced semiconductors, announced on the 5th that it will partner with 17 semiconductor design-related companies in Japan and abroad, including Toshiba. The partners include Toshiba Information Systems, a Toshiba subsidiary, as well as Dai Nippon Printing, TOPPAN, and major U.S. semiconductor design firms Synopsys and Cadence Design Systems. The aim is to strengthen its support system spanning everything from the design to the manufacturing of advanced semiconductors in line with customer needs, thereby winning more orders. Going forward, it plans to work with its partners to support customers' semiconductor design and increase the volume of production contracted to Rapidus.

TSMC is considering building a new chip manufacturing plant in Texas, with expectations of adding several tens of billions of dollars in investment under a multi-year plan to expand its chipmaking business in the United States. Sources say the Texas project covers the construction of multiple chip plants, and if the investment goes ahead, each plant would cost at least 20 billion dollars. Previously, TSMC pledged to invest 265 billion dollars in Arizona, where several plants are currently under construction. The Texas investment depends on whether the U.S. government extends a tax credit measure for advanced manufacturing that is set to expire at the end of this year. The plan is still at an early stage and no details have been officially disclosed. TSMC is a key chip supplier to Nvidia and Apple, with revenue from wafer manufacturing in America accounting for more than 75% of its revenue from that business this year.

Wells Fargo says semiconductor capital-equipment companies could be the biggest near-term beneficiaries of a potential TSMC expansion of 2-nanometer production. Analyst Joe Quatrochi wrote that reports of the possible capacity increase should be viewed as a potentially incremental positive opportunity for semi cap companies, though timing, size and node details are still unconfirmed. Building additional 2nm capacity would require significant spending on lithography, deposition, etching and inspection equipment, adding a layer of demand for suppliers supporting TSMC's fabs. Quatrochi pointed to the so-called Silicon Prairie as a logical location for a potential second U.S. campus, citing existing semiconductor operations in Texas from Texas Instruments, Samsung, Coherent and Terafab, plus TSMC's design service center in Austin. TSMC's major 2nm customers include Apple, Nvidia, AMD and Qualcomm, with Google, Broadcom, Marvell, Amazon and OpenAI also expected to use the advanced process.

Wuxi Industry Development Group recently issued the country's first key core technology breakthrough sci-tech innovation bond, 26 Xi Chan K2, on the Shanghai Stock Exchange, with a total size of 600 million yuan, a term of three years, and a coupon rate of 1.58 percent. Proceeds from this bond will be invested specifically in the construction of the Hua Hong FAB9B project, which will build a 12-inch specialty process wafer production line with a planned monthly capacity of 55,000 wafers. It represents scarce domestic capacity for automotive-grade and high-end industrial-grade chips, focusing on niche segments such as non-volatile memory, power devices, and analog chips, while carrying out core technology breakthroughs in key areas including Bluetooth radio frequency chip processes, next-generation high-voltage driver processes, and embedded flash memory processes. Once completed, the project will help close the domestic supply gap in high-end specialty process chips and effectively raise the level of self-reliance and controllability of critical chips. In recent years, Wuxi Industry Group has launched a number of first-of-their-kind projects, including bonds dedicated to the aerospace sector and a computing-in-memory sci-tech innovation bond. To date, its cumulative issuance of sci-tech innovation corporate bonds has reached 8 billion yuan, ranking first in Wuxi and second in Jiangsu, and it has successfully invested in high-precision and cutting-edge projects such as SJ Semiconductor, Zhipu AI, Geekplus, and Dobot. Wuxi Industry Group said that going forward it will seize capital market opportunities, continue to leverage the leading role of patient capital, long-term capital, and strategic capital, and deepen its presence in key areas such as integrated circuits, artificial intelligence, and commercial aerospace, injecting new momentum into Wuxi's efforts to build itself into an industrial sci-tech innovation hub.

Piper Sandler analyst Thomas Champion is projecting that Google's newly disclosed external chip business will generate $104 billion in TPU hardware revenue by 2028, a forecast the firm says the broader Street has yet to price in. Champion published the note after Google disclosed external hardware sales for the first time in its second-quarter 2026 earnings report, a milestone that triggered a formal reassessment of the revenue opportunity. The firm's model has TPU sales climbing from approximately $8 billion in 2026, or roughly 240,000 chips, to $51 billion in 2027, or approximately 2.4 million chips, and then to $104 billion in 2028, anchored to a facilities and power-capacity build-out of 3 gigawatts of run-rate capacity by the end of 2027 and 6GW by the end of 2028. Piper Sandler raised its price target on Alphabet to $400 from $395 and reiterated its Overweight rating, with its 2027 and 2028 Cloud revenue estimates now 15% and 17% above consensus and its Cloud EBIT estimates 18-19% above consensus. Champion also flagged that even these estimates may prove conservative, noting that Broadcom management recently spoke to 5GW of Anthropic demand in 2027 and 10GW in 2028, which Piper Sandler estimates as $105 billion and $210 billion in revenue if that capacity is achieved.

Taiwan Semiconductor Manufacturing is expanding 2-nanometer production faster than previously expected as major customers increase their commitments to the new technology. The company could reach monthly 2nm output of about 120,000 wafers by the end of 2026, compared with earlier estimates of 90,000 to 100,000, according to Taiwan's EDN. Apple, Nvidia, Advanced Micro Devices, Qualcomm and MediaTek are reportedly lifting 2nm orders by 10% to 20%, giving TSMC additional visibility as customers prepare next-generation processors and AI accelerators. In the second quarter, 2nm represented 3% of TSMC's wafer revenue, while technologies at 7nm and below accounted for 77%, and high-performance computing made up 66% of revenue, up from 60% a year earlier. TSMC has projected 2026 2nm capacity growth as it ramps multiple facilities in Taiwan.

Volato Group's Alignment Engine subsidiary has entered into two four-year, take-or-pay orders with a large AI customer representing $1.17 billion in aggregate contract value, marking Alignment Engine's first major customer commitment for its AI infrastructure platform. The orders cover phased deployment of dedicated AMD GPU infrastructure at Alignment Engine's Ohio AI infrastructure campus, with the initial deployment using AMD MI355X GPUs and a contractual start date of December 31, 2026, and a second deployment using AMD MI455X GPUs starting June 30, 2027. The customer has committed to approximately $133 million in contractual prepayments, including approximately $40 million due following execution of the initial order, with the remaining prepayments scheduled in stages based on specified dates and equipment shipment milestones. The deployments will operate as dedicated, single-tenant GPU clusters, and the remaining contract value is payable over the four-year terms on a take-or-pay basis. Volato Chief Executive Officer Chris Ensey called the orders a transformational commercial milestone, and Chief Financial Officer Mark Heinen said they demonstrate a model of building infrastructure against long-term contracted demand and meaningful customer cash commitments.

JPMorgan analysts said on the 28th that the recent correction in global AI-related trading has improved investors' positioning and made valuations more attractive, which could encourage investors to re-enter the market, particularly in semiconductor stocks. In a report, they noted that tech may not return to past peak levels, but the underlying scenario remains positive and there are many investment opportunities within the AI-related sector. They said investor positioning in the AI space has been cleaned up and valuations have fallen sharply across most areas, while capital expenditure is likely to remain solid despite recent slowdown concerns. On semiconductor stocks, they maintained a bullish outlook citing strong fundamentals, price increases through 2027, and supply-demand tightness expected to persist until 2028, while keeping a cautious stance on software stocks, assessing that AI growth continues to leave the sector's long-term outlook uncertain.

China's Ministry of Industry and Information Technology has asked some technology companies, including Alibaba Group and ByteDance, to report their plans to purchase Nvidia's new RTX Pro 5500 graphics processing chip, which was launched this month, according to a Bloomberg report citing The Information. The companies must specify the number of chips they intend to buy and the purpose of use. Sources said the ministry has notified some companies of plans to approve such purchases. The move signals that China's government may allow these companies to buy Nvidia chips. Previously, the U.S. government banned exports to China of Nvidia's most powerful AI processing chips over concerns they would boost China's AI capabilities and military potential. However, the RTX Pro 5500 is a chip designed primarily for graphics and simulation work, even though it can support AI services. It differs from the top-tier GB300 because it uses older manufacturing technology and is designed for large-scale computing tasks. The U.S. government has just eased restrictions on exports of some Nvidia chips to China, although most of these chips are older models and are sold in fairly limited quantities.

VisionPower Semiconductor Manufacturing Company (VSMC), a joint venture between Vanguard International Semiconductor and NXP Semiconductors, has opened its first 12-inch (300 mm) wafer fab in Tampines, Singapore, a $7.8B facility. Following the completion of construction, the plant has entered risk production, with full commercial manufacturing scheduled to begin in the first quarter of 2027. Representatives from TSMC and other partners, along with customers, suppliers, industry associations, and government agencies, attended the opening, the company said.

Xinlian Integration released its performance forecast for the first three quarters of 2026, expecting operating revenue of about 7.766 billion yuan, up about 43.23 percent from 5.422 billion yuan in the same period last year. Net profit attributable to the parent company is expected to be about 681 million yuan, an increase of about 1.144 billion yuan from a loss of 463 million yuan in the same period last year. Based on the 4.562 billion yuan in operating revenue and 278 million yuan in net profit attributable to the parent company already achieved in the first half, the company's third-quarter operating revenue is expected to be about 3.2 billion yuan, up sharply both year on year and quarter on quarter, with quarterly net profit attributable to the parent company expected to be about 400 million yuan, turning from a loss to a profit year on year and rising by more than 30 million yuan quarter on quarter. The company said the earnings growth benefited from high capacity utilization, continuous optimization of the product mix, scale effects from sales volume growth, and ongoing improvements in cost control and factory operating efficiency. The steady progress of technology licensing business also had a favorable impact on net profit attributable to the parent company. So far, only four listed companies in the A-share market have disclosed third-quarter earnings forecasts, with the other three being Fuxiang Pharmaceutical, Chipmore Technology, and Luxshare Precision.

South Korea's trade surplus widened to a record $23 billion in the first 20 days of September as exports accelerated, led by strong semiconductor shipments and a sharp rebound in autos and auto parts, according to Goldman Sachs. Exports per working day rose 7.4% month-on-month on a seasonally adjusted basis, accelerating from 4.1% in the previous month, while total exports during the first 20 days climbed 14.9%, compared with a 7.2% increase previously, with some of the acceleration reflecting front-loading ahead of the lunar Mid-Autumn Festival holidays in late September. Semiconductors were the biggest contributor, with chip exports increasing 16% and accounting for roughly 60% of the sequential rise in overall exports, while other technology exports fell 1% as higher handset and household appliance shipments were offset by weaker computer exports. Outside technology, autos and auto parts exports jumped 60.8% after contracting for two consecutive months and accounted for roughly a quarter of the overall sequential increase, and demand from the U.S. was particularly strong, with exports to the country surging 48.1% from 13.6% previously and accounting for slightly more than half of the overall sequential export gain. Shipments to Taiwan and the European Union climbed 43.6% and 34.7% respectively, together contributing about 30% of the increase, while exports to mainland China grew by a more modest 1.2%, and total imports during the 20-day period increased 10.5% compared with 1.7% previously.

Taiwan Semiconductor Manufacturing is establishing an advanced-packaging testing and training hub in Kaohsiung that will let suppliers test equipment and materials alongside the chipmaker before those technologies reach production. Two buildings are expected to open in late 2029, and TSMC has said the setup could make validation 25% to 50% more efficient. The company's U.S. shares rose about 0.4% to $453.02 around 10:28 a.m. ET Friday, based on Thursday's $451.15 close. The article notes that faster testing is not the same as more chips ready to sell, and that the shares sit 24.45% above GuruFocus's $364.01 GF Value estimate.

Advanced Micro Devices crossed the $1 trillion market capitalization mark for the first time on Monday, with shares surging 9.9% amid a broader tech-stock rally. The milestone caps a September in which CEO Lisa Su sat at President Trump's table during the state dinner with Chinese President Xi Jinping, two seats from Trump and next to Elon Musk, and rang the opening bell at the New York Stock Exchange with first lady Melania Trump. AMD stock is up 193% year to date, far outpacing Nvidia's 22% gain. The chipmaker beat Wall Street expectations across the board for the second quarter, posting record non-GAAP earnings per share of $1.66 against consensus estimates of $1.61, with total revenue up 50% year over year to a record $11.5 billion and data center revenue more than doubling to $6.7 billion. AMD projected second-half 2026 server CPU revenue to grow 80% year over year and 70% in 2027, and expects data center revenues to more than double in 2027 with AI GPUs growing well over 100%. The company also unveiled its next-generation Instinct MI450 Series GPUs and 6th Gen EPYC Venice CPUs for its Helios rack-scale AI systems, alongside deals for Microsoft to deploy Helios across Azure AI services beginning in the second half of 2026 and for Anthropic to deploy up to 2 gigawatts of Instinct MI450 GPUs beginning in the first half of 2027, a deal that could be worth tens of billions of dollars over time, with AMD committing to invest up to $5 billion in Anthropic.

Forecasts from 12 private think tanks and other institutions for the Bank of Japan's September National Short-Term Economic Survey of Enterprises, or Tankan, to be released on the 1st of next month, were all in by the 25th. The average forecast for the business conditions diffusion index, which gauges corporate sentiment, stands at plus 26 for large manufacturers, a 4-point improvement from the previous June survey. The dominant view is that demand related to artificial intelligence and semiconductors will lift sentiment, and this would mark the sixth consecutive quarter of improvement for manufacturers. While industries producing equipment and materials related to semiconductor manufacturing, such as electrical machinery and production machinery, are analyzed as performing well, it has been pointed out that automobiles may act as a drag due to sluggish growth in export volumes. The average forecast for large non-manufacturers is 36, down 1 point from the June survey, with many companies expecting flat or slightly worse conditions due to weak inbound demand and rising costs such as fuel and labor expenses. Based on this Tankan, the Bank of Japan plans to analyze risks such as higher crude oil prices and AI-driven upward pressure on prices, and to look for the timing of an additional interest rate hike.