Taiwan Semiconductor Manufacturing Co. ( TSMC ) reported better-than-expected 39 percent quarterly revenue growth, allaying concerns that spending on AI hardware is starting to taper off.

Chipmaker major Nvidia and Apple reported September quarter sales of TWD 759.7 billion (roughly Rs. 1,97,885 crore), against the average projection of TWD 748 billion (roughly Rs. 1,94,838 crore). Taiwan’s largest company will release its full results next Thursday.

The better-than-expected performance could bolster the sentiment of investors who are betting that spending on artificial intelligence will remain high as companies and governments race to get a head start on the new technology. Others warn that companies like Meta Platforms and Alphabet’s Google cannot sustain their current pace of infrastructure spending without a compelling and monetizable AI use case.

Hsinchu-based TSMC is one of the key companies at the center of a global surge in spending on artificial intelligence development, producing the cutting-edge chips needed to train artificial intelligence. Its sales have more than doubled since 2020, with the initial launch of ChatGPT starting a race to buy Nvidia’s hardware for AI server farms.

Nvidia shares rose about 1.2 percent in premarket trading in New York on Wednesday, while TSMC’s US-traded ADRs rose a more modest 0.8 percent.

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