Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) just delivered a blowout third-quarter performance, sending its shares up 8% in premarket trading. With revenue up 36% year-over-year to $23.5 billion and net profit rising 54%, Taiwan Semiconductor is riding the wave of soaring demand for AI chips. High-performance computing, powered by AI, now accounts for 51% of its revenue, reinforcing Taiwan Semiconductor’s role as a backbone for giants like Nvidia, AMD and Apple. If you’re looking for a leader in the AI ​​competition, pay attention to Taiwan Semiconductor.

CEO CC Wei didn’t hold back during the earnings announcement, highlighting extremely strong AI-related demand from customers and predicting that AI chips will account for a mid-teens percentage of sales this year. The fourth quarter forecast is equally optimistic: forecast sales are between $26.1 billion and $26.9 billion, giving the company nearly 30% growth in 2024. Despite rising costs from advanced technology nodes like 3nm, Taiwan Semiconductor exceeded expectations with a gross margin of 57.8%, proving they can handle the heat while continuing to dominate the semiconductor landscape.

Looking ahead, Taiwan Semiconductor plans to invest more than $30 billion in capital expenditures in 2024 to meet the incessant demand for AI chips. There are also signs of expansion in the USA, where the first factory in Arizona is scheduled to go into production in 2025. As AI reshapes the semiconductor industry, the company is solidifying its leadership position and giving investors plenty of reasons to remain optimistic. The message is clear: Taiwan Semiconductor isn’t just keeping pace, it’s leading the way.

This article first appeared on GuruFocus.