What factors contributed to TSM's Q3 2024 beat?

TSMC's Q3 2024 beat was primarily driven by robust demand for its advanced AI chips, particularly those manufactured using 3-nanometer and 5-nanometer technologies. Here are the key factors that contributed to this performance:

1. **Strong Demand for AI Chips**: The surge in demand for AI chips has been a significant growth driver for TSMC. The company's leadership in advanced chip manufacturing, especially for AI applications, has been a key differentiator.
2. **Advanced Technology Nodes**: The strong performance was supported by the demand for TSMC's industry-leading 3-nanometer and 5-nanometer technologies. These nodes are crucial for high-performance computing and smartphone applications.
3. **High-Performance Computing (HPC) Segment**: The HPC segment, which is essentially the AI segment for TSMC, grew significantly, contributing 52% to the total revenue. This segment saw a 28% sequential increase in revenue.
4. **Smartphone Segment**: Despite a 1% decline in demand for smartphone chips, the smartphone segment still contributed 33% to TSMC's net revenue. The company expects strong demand for smartphones and AI-related technologies in Q3 2024.
5. **Regional Sales Contribution**: Geographically, North American-based customers contributed 65% of the total revenue, while China accounted for 16%. Asia-Pacific, Japan, and EMEA also contributed to the revenue.
6. **Strategic Market Position**: TSMC's strategic focus on leading-edge processes and its ability to manage production lines effectively have helped it meet the high demand. The company's gross margin reached 53.2%, indicating efficient operational management.

In summary, TSMC's Q3 2024 beat was driven by the robust demand for its advanced AI chips, particularly those manufactured using 3-nanometer and 5-nanometer technologies, along with strong contributions from its High-Performance Computing and Smartphone segments, and effective management of regional sales.