Taiwanese chipmaker TSMC reported a nearly 40% year-over-year surge for its third quarter profits, boosted by growing global demand for advanced chips that power artificial intelligence.

According to the Associated Press, TSMC recorded $15 billion in net profits between July and September, marking a record high for a single quarter and beating the $13.6 billion estimate that had been projected by analysts. The company also posted more than $33 billion in revenue, outpacing analyst projections by more than $1 billion. This comes after TSMC reported a 61% year-over-year bump in its second quarter profits, which the company credited to strong demand from its leading customers in the U.S.

In a recent earnings call, CEO C.C. Wei highlighted how "recent developments in the AI market continue to be very positive," and that increased AI adoption has created more demand than ever for semiconductors. TSMC's high-performance computing division — which includes artificial intelligence and 5G applications — accounted for 57% of the company's total revenue in the third quarter, while small advanced chips that provide greater processing power made up 74% of its revenue from wafers.

Although tariff negotiations between the U.S. and Taiwan have yet to fully resolve, analysts expect TSMC to receive at least some exemptions once a deal is reached. The company previously committed $165 billion in investments toward U.S. manufacturing, and is a key supplier for U.S.-based chip designer Nvidia.