Revenue at Taiwan Semiconductor Manufacturing (TSMC) rose in the third quarter of this year, fuelled by robust smartphone demand and artificial intelligence (AI) applications.
TSMC's net revenue surpassed expectations, climbing to $23.5bn in the third quarter, a nearly 13pc increase from $20.8bn in the second quarter. This also marked a 36pc year-on-year rise from $17.3bn in the third quarter of last year. TSMC initially set its third-quarter guidance at $22.4bn-23.2bn.
Robust demand for TSMC's advanced technologies from AI and mobile phone applications drove the revenue boost. Sales of TSMC's most advanced 3-nanometer (3nm) process technology comprised a fifth of third-quarter revenue, higher than 15pc in the second quarter. Meanwhile, 5nm process technology constituted 32pc of revenues, a slight decrease from 35pc in the second quarter, while 7nm wafers remained steady at 17pc.
High-performance computing continued to be TSMC's largest downstream consumer, accounting for 51pc of third-quarter revenues, while smartphones constituted 34pc and the Internet of Things made up 7pc. The automotive sector made up 5pc of revenues.
Global mobile phone shipments increased to about 316mn units in the third quarter, higher by 4pc on the year, data from the International Data Corporation show. The launch of the new iPhone 16 in September and consistent growth among Chinese mobile phone manufacturers such as Huawei and Xiaomi contributed to the higher shipments.
TSMC anticipates that AI and mobile phone demand will continue to boost revenues towards the year's end as it targeted a total revenue of $26.1bn-26.9bn in the fourth quarter.
The roll-out of AI technology is expected to stimulate demand for compound semiconductor materials such as gallium nitride and gallium arsenide. These materials lose less energy as heat compared with silicon-based chips, thereby enhancing energy efficiency.
