Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chip maker, provided some positive signals on Thursday, suggesting that the chip industry might be reaching the end of a challenging period.

Although TSMC experienced an 11% decline in revenue for the July-to-September quarter compared to the previous year, mainly due to reduced sales of chips used in smartphones and high-speed computing, the company's CEO, C.C. Wei, remained optimistic about the industry's future.

During a conference call with investors, Wei expressed confidence in seeing improvements in demand from consumer-electronics sectors like smartphones and personal computers, which are major contributors to TSMC's business. He emphasized that TSMC's technological leadership and wide customer base positioned the company for healthier growth in 2024.

TSMC identified high-performance computing as one of the key drivers of growth in the coming years, along with robust demand from artificial intelligence applications. The company also highlighted the significance of advanced chip manufacturing technology, such as the 3-nanometer nodes utilized in Apple's latest iPhone models, which continues to drive sales.

Despite these positive indicators, Wei cautioned that a sharp rebound should not be expected too soon as customers are still carefully managing their inventories.

TSMC announced that its capital expenditures this year would amount to $32 billion, matching its previous forecast. Approximately 70% of this investment will be allocated to enhancing capacity for the most advanced semiconductors.

Regarding recent US restrictions on AI-related chip exports to China, Wei stated that while TSMC anticipates manageable short-term impacts, the company is evaluating the long-term consequences.

In a separate development, TSMC decided not to proceed with a new factory site for advanced chip manufacturing in Taiwan due to opposition from local residents.

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