[Edaily Reporter JAEMIN SONG ] Taiwan’s TSMC, the world’s largest foundry (semiconductor contract manufacturer), posted record-breaking earnings for the third quarter of this year, driven by demand for artificial intelligence (AI) semiconductors. As the revenue contribution from its next-generation 2-nanometer (nm; one-billionth of a meter) process increases, the company is also strengthening its dominance in the advanced process market. For SamsungElectronics, which is catching up with the same 2-nanometer process, expanding mass production volumes and securing clients have emerged as key challenges.

According to TSMC on the 15th, the company’s revenue for the third quarter of this year reached 1.4942 trillion New Taiwan dollars (approximately $46.7 billion), a 50.9% increase (in New Taiwan dollars) compared to the same period last year. Net income rose 68.7% to 763.1 billion New Taiwan dollars. Driven by growing demand for AI semiconductors, the revenue share from high-performance computing (HPC) rose to 68%.

In particular, the contribution of advanced process technologies to revenue was notable. The share of 2-nanometer processes in total wafer revenue rose from 3% in the previous quarter to 8%. The combined share of advanced processes—including 3-nanometer (33%), 5-nanometer (28%), and 7-nanometer (10%)—reached 79%. Although the gross profit margin declined due to initial mass production costs, the operating profit margin reached 58.7%, exceeding the upper end of the guidance range.

The 2-nanometer process is considered a key competitive arena in the AI accelerator and high-performance semiconductor markets, as it can enhance semiconductor performance and power efficiency compared to the existing 3-nanometer process. However, as circuit features become finer, manufacturing complexity increases, making it crucial to ensure yield and mass production stability. While TSMC is rapidly expanding its production scale for advanced processes, SamsungElectronics faces the challenge of narrowing the market share gap. According to TrendForce, TSMC’s market share in the second quarter stood at 72.5%, significantly ahead of SamsungElectronics (5.9%). The gap between China’s SMIC (5.4%) and SamsungElectronics was only 0.5 percentage points.

SamsungElectronics is also pushing for a rebound, focusing on its 2-nanometer process and U.S. production facilities. Last year, the company secured a semiconductor foundry contract with Tesla worth approximately $16.5 billion and plans to utilize its Taylor, Texas, plant as the main production hub for those chips. It is also continuing preparations for mass production of products based on its second-generation 2-nanometer process. However, stabilizing yield rates and increasing utilization rates are necessary to convert order volumes into actual revenue and profit.

TSMC forecast fourth-quarter revenue of $52.3 billion to $54.3 billion and maintained its capital expenditure target for this year at $60.0 billion to $64.0 billion. The company assesses that demand for AI semiconductors remains robust, with no signs of a slowdown in growth. However, it expressed caution regarding overall market uncertainty. C.C. Wei, TSMC’s CEO, said during a conference call that day, “Consumer and price-sensitive end-market segments continue to face challenges due to rising component prices and macroeconomic uncertainty,” adding, “We are carefully formulating our business plans for next year.”