Taiwan’s semiconductor behemoth, TSMC, has posted significant financial results for the third quarter, showcasing a revenue increase of 36% compared to the previous year. This growth stems from heightened demand in AI and smartphone sectors, particularly for its leading-edge 3 nm and 5 nm technology. TSMC’s revenue for the quarter ending September 30, 2024, was reported at $23.50 billion, marking a substantial increase from last year and a 12% rise from the preceding quarter. TSMC’s stock value saw a 6% increase in early trading, resulting in an 80% surge year-to-date.

According to Wendell Huang, Senior VP and CFO, the impressive performance is attributed to the robust demand for smartphone and AI applications, notably leveraging TSMC’s advanced semiconductor nodes. This trend is anticipated to persist into the fourth quarter.

Significantly, over half of TSMC’s revenue now derives from its 3 nm and 5 nm processes, utilized by key players like Nvidia. The company continues to scale production of these advanced nodes, with 5 nm contributing to 32% of sales and 3 nm at 20%. In terms of market segments, high-performance computing drove 51% of revenue, while smartphones accounted for 34%. Although IoT signifies only 7%, it highlights the fastest growth, up by 35% compared to the last quarter, in contrast to a 19% decline in digital consumer electronics.

In addition to these achievements, TSMC has embarked on substantial global expansion. Construction has begun on its first European facility in Dresden, Germany, and a partnership with Amkor Technology aims to establish an advanced packaging site in Peoria, Arizona.

Forecasts point towards continued revenue growth in the fourth quarter, projected between $26.1 billion and $26.9 billion, driven by sustained demand for GPUs essential for AI training models, assuming the trend holds firm.