Taiwan’s TSMC Reports Robust Q3 Revenue Growth Driven by AI and Smartphone Demand

TSMC

Taiwan Semiconductor Manufacturing Company (TSMC) reported a stellar third-quarter performance for 2024, as surging demand for artificial intelligence (AI) chips and smartphones propelled its revenue to $23.5 billion. This represents a 13% quarter-on-quarter growth from $20.8 billion and an impressive 36% increase year-on-year from $17.3 billion. The company's results exceeded its prior guidance of $22.4-$23.2 billion, solidifying its position as a key player in the semiconductor industry.

Advanced Technologies Drive Growth

Demand for TSMC’s cutting-edge technologies underpinned this growth. The company's 3-nanometer (3nm) process technology contributed 20% of Q3 revenues, up from 15% in Q2. Although the contribution from the 5nm process fell slightly to 32% from 35%, the steady performance of 7nm wafers, which accounted for 17% of revenues, indicates consistent demand for mature nodes.

High-performance computing (HPC) remained the largest revenue driver, comprising 51% of total revenue, while smartphones accounted for 34%. The Internet of Things (IoT) contributed 7%, and the automotive sector added 5%.

AI and Smartphones Lead Market Momentum

The rollout of AI applications and the launch of new flagship smartphones, including Apple's iPhone 16, were significant catalysts. According to data from the International Data Corporation (IDC), global mobile phone shipments rose 4% year-on-year in Q3, reaching 316 million units. Growth in Chinese smartphone brands, such as Huawei and Xiaomi, further bolstered this trend.

Future Outlook and Materials Innovation

TSMC projects its Q4 revenue to climb to $26.1-$26.9 billion, driven by sustained demand for AI and smartphones. AI advancements are expected to spur the adoption of compound semiconductors like gallium nitride (GaN) and gallium arsenide (GaAs), materials that are more energy-efficient than traditional silicon. These innovations could redefine energy efficiency standards in semiconductor manufacturing.

TSMC's strong third-quarter performance highlights its dominance in the global semiconductor market and its ability to meet evolving technological demands, reinforcing its role as a critical supplier for the AI and mobile computing revolutions.