Taiwan Semiconductor Manufacturing stock rose after the company posted a big jump in profit and sales for the third quarter, beating analysts’ estimates. It’s a sign of strong demand for artificial-intelligence chips.

Taiwan Semiconductor Manufacturing Company has announced a forecast-busting quarterly profit amid surging demand for chips used to power artificial intelligence. TSMC, the world’s largest contract chipmaker, reported a net profit of 352.3 billion Taiwanese dollars ($10.1bn) for the third quarter, up 54.2 percent from the same period last year.

Taiwan's semiconductor giant TSMC has reported a good third quarter with revenue up 36 percent over a year ago, due to strong demand from chip companies for smartphone and AI-related silicon.

TSMC's Taipei-listed shares hit a record high on Friday after the chipmaker posted forecast-beating third-quarter earnings and gave a rosy outlook on strong artificial intelligence (AI) demand.

ASML slashed guidance on Tuesday, leading to a sell-off in chip stocks and raising the stakes for TSMC's upcoming earnings report.

It’s a sign of strong demand for artificial-intelligence chips. Taiwan Semi, or TSMC, said revenue in U.S. dollars in the third quarter jumped 36% from a year earlier to $23.5 billion. Net profit rose 54% on the year to the equivalent of $10.