TSMC Reports Robust Q3 Growth, Fueled by AI and Smartphone Demand

Strong Q3 Revenue Growth Driven by Semiconductor Innovations
Taiwan Semiconductor Manufacturing Company (TSMC) posted impressive third-quarter earnings of $23.5 billion for 2024, reflecting a 13% increase from Q2 and a substantial 36% rise compared to the same period last year. This robust performance exceeds the company’s expectations, reaffirming its leadership position in the global semiconductor market. The surge in revenue is primarily driven by heightened demand for semiconductors in artificial intelligence (AI) and smartphones.

AI and Smartphones Lead the Growth Surge
TSMC’s revenue growth is largely attributed to the booming demand for chips in AI applications and the continued expansion of the smartphone market. High-performance computing (HPC), which is powered by AI, accounted for over half (51%) of TSMC’s total Q3 revenue, underscoring the central role of AI in driving semiconductor demand. Meanwhile, smartphones contributed 34% of TSMC’s revenue, bolstered by the release of flagship devices, including Apple’s iPhone 16. According to the International Data Corporation (IDC), global smartphone shipments grew 4% year-over-year, with Chinese brands such as Huawei and Xiaomi significantly boosting this trend.

Advanced Process Technologies Fuel the Surge
The growth in TSMC’s revenue is also linked to the company’s cutting-edge semiconductor process technologies. The 3-nanometer (3nm) process, which offers enhanced performance and energy efficiency, contributed 20% of total revenue in Q3, marking a noticeable increase from 15% in Q2. Additionally, TSMC’s 5nm technology accounted for 32% of revenue, though this was slightly down from the previous quarter. Despite the slight dip in 5nm contributions, the strong demand for mature semiconductor nodes, like the 7nm process, which accounted for 17% of revenue, indicates the ongoing need for a broad range of technologies.

Material Innovations and the Road Ahead
Looking ahead, TSMC forecasts Q4 revenue in the range of $26.1 billion to $26.9 billion, underpinned by continued demand for AI and smartphone chips. Furthermore, TSMC is set to expand its material innovations, particularly in the realm of compound semiconductors like gallium nitride (GaN) and gallium arsenide (GaAs). These materials are gaining traction for their superior energy efficiency and are expected to play a crucial role in the future of AI and high-performance computing.

The continued success of TSMC highlights the importance of advanced materials in driving the semiconductor industry’s growth. Innovations in 3nm process technology and the adoption of energy-efficient compounds like GaN and GaAs will play a pivotal role in the evolution of semiconductor manufacturing, positioning TSMC as a key player in powering the future of AI and mobile technologies.