Taiwanese chipmaker TSMC (NYSE:TSM) reported a 24.9% drop in third-quarter net profit on Thursday as global economic problems hit demand for chips used in applications ranging from cars to cell phones and servers, coming off a high base last year.

Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world’s largest contract chipmaker and a key supplier to Apple Inc, saw its July-September net profit fall to 211 billion Taiwan dollars from 280.9 billion Taiwan dollars a year. before.

The profit beat the LSEG SmartEstimate of T$195.5 billion, which is weighted on analyst forecasts that are more consistently accurate.

TSMC CEO Sees Signs of a Bottom in Chip Industry

The world’s biggest contract chip maker, Taiwan Semiconductor Manufacturing Co., offered some indications Thursday that the chip industry’s rough year may be coming to an end.

TSMC’s revenue from the July-to-September quarter dropped by 11% from a year earlier, as sales fell for chips used in smartphones and high-speed computing. Its net profit dropped by 25% compared to a year earlier.

However, in a conference call with investors on Thursday, TSMC Chief Executive C.C. Wei said he believed the industry was close to the bottom.

Wei said TSMC has spotted early signs of improvement in demand from consumer-electronics sectors such as smartphones and personal computers, one of the company’s largest businesses. He said the company was confident of healthier growth in 2024 given its strong technology leadership and broad customer base.

TSMC said high-performance computing is expected to be one of the strongest growth drivers in the coming years. It also cited robust demand from artificial-intelligence applications and said cutting-edge chip manufacturing technology, such as the 3-nanometer nodes used in Apple’s latest iPhone models, continues to drive sales.

Wei cautioned that it’s still too early to expect a sharp rebound because customers are still carefully managing their inventories.

TSMC said its capital expenditures this year would come in at $32 billion, in line with its previous forecast, compared with last year’s record $36.3 billion. About 70% of that will go to building up capacity for the most advanced semiconductors, the company said.

Commenting on the recent tightening of U.S. restrictions on AI-related chip exports to China, Wei said the short-term impact on TSMC would be manageable but the company is still assessing the longer-term impact.

Separately, the company this week said it won’t proceed with a new factory site for advanced chip-making in Taiwan after protests from local residents.