TSMC revenue up 36% as world+dog demands AI and smartphone chips

Biggest semi contract manufacturer – and Nvidia supplier – building out capacity in US and Europe

Taiwan's semiconductor giant TSMC has reported a good third quarter with revenue up 36 percent over a year ago, due to strong demand from chip companies for smartphone and AI-related silicon.

The world's largest semiconductor contract manufacturer said its income for the third quarter ended September 30, 2024 stood at $23.50 billion in US dollars, a 36 percent jump in US dollar figures on the same period last year and 12 percent up on the previous quarter.

Shares in TSMC were 6 percent up in early premarket trade, and are now 80 percent higher in value than at the start of the year.

Senior VP and Chief Financial Officer Wendell Huang was unequivocal about what has been driving this leap in revenue: "Our business in the third quarter was supported by strong smartphone and AI-related demand for our industry-leading 3 nm and 5 nm technologies."

This is a situation Huang expects to continue through the fourth quarter, he added.

Broken down by process technology, those advanced 3 nm and 5 nm process nodes now account for more than half the company's revenue, as chipmakers such as Nvidia demand them for their latest products. 5 nm makes up 32 percent of this, with 3 nm accounting for 20 percent of revenue, even though TSMC is still ramping up volume production.

When looked at in terms of platform, high performance computing (HPC) comprised 51 percent of the silicon supremo's revenue, with smartphone-related manufacturing accounting for 34 percent. IoT chips made up only 7 percent of income, but are the fastest growing segment – up 35 percent quarter on quarter, while DCE (digital consumer electronics) fell by 19 percent.

Also during this quarter, TSMC broke ground on its first European fabrication facility, which is being constructed in Dresden, Germany and signed a deal with US semiconductor assembly and test firm Amkor Technology for an advanced packaging facility to be built in Peoria, Arizona.

Looking ahead to the end of the current fourth quarter, TSMC forecasts revenue to be up again to between $26.1 billion and $26.9 billion, no doubt on the back of the continuing demand for GPUs to drive model training – so long as the AI wave lasts, that is. ®