Taiwan Semiconductor Manufacturing (TSM) reported strong Q3 results and raised guidance, with revenue up 41% to $33.1 billion and gross margin at 59.5%. Revenue from advanced nodes like 7nm and under increased to 74%, with 3nm technology now contributing 23% of total wafer revenue.

Despite flat high-performance computing (HPC) revenue, TSMC saw a 19% increase in smartphone revenue in Q3, accounting for 30% of total revenue. The company projects Q4 revenue between $32.2 billion and $33.4 billion, with gross margins of 59% to 61% and operating margin ranging from 49% to 51%.

TSMC is a key player in the semiconductor supply chain, driving AI infrastructure and advancing chip technology with shrinking node sizes. The company expects mid-30% revenue growth for the full year, supported by strong demand for AI chips and a recovery in other chip markets. AI chip demand is projected to grow at a mid-40% compound annual growth rate through 2029.

TSMC plans to expand its cutting-edge capacity in the U.S. and introduce 2nm and 1.6nm node technology. Despite higher operating costs in the U.S., the company remains the leader in semiconductor manufacturing. With a forward P/E ratio of 26, TSMC is positioned for continued growth and remains a strong buy.

Read more at Yahoo Finance: After Upbeat Outlook, Is It Time to Buy Taiwan Semiconductor Manufacturing?