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Taiwan Semiconductor Mfg. Co. Ltd., (TSMGet Report) the world’s biggest contract chipmaker and a lead supplier for Apple Inc. (AAPLGet Report) iPhones, boosted its current quarter revenue forecast amid what it said was stronger-than-expected global demand for premium smartphones.

TSMC said profits for the three months ending in September came in at T$101.07 billion ($3.3 billion), up 13.5% from the same period last year and firmly ahead of the Refinitiv-collected forecast of $T$96.33 billion. Group revenues, which TSMC reports in U.S. dollars, rose 10.7% to $9.4 billion, a figure it expects to improve to between $10.2 billion and $10.3 billion over the final three months of the year. 

Smartphone-related sales, TSMC said, rose 45% from last year, lead by a 20% increase in China, with both figures prompting a sharp hike in 2019 capital expenditure plans, which the group now sees in the region of $14 billion to $15 billion.  

“Our third quarter business benefited from new product launches both in premium smartphones and high performance computing applications using TSMC’s industry-leading 7-nanometer technology,” said CFO Wendell Huang. “We expect the strength of demand for our 7-nanometer technology will continue, driven by high-end smartphones, initial 5G deployment and HPC-related applications.” 

TSMC’s U.S.-listed shares were marked 1.74% higher in pre-market trading Thursday to indicate an opening bell price of $50.13 each, a move that would extend the stock’s year-to-date gain to around 35.8%.

The Taiwan-based tech group’s second half outlook echoes a similarly bullish assessment yesterday from semiconductor supplier ASML Holding NV (ASMLGet Report) ,which posted stronger-than-expected second quarter earnings that suggest global chip demand is starting to recover after a near two-year slowdown.

ASML said it sees fourth quarter revenues rising to around €3.9 billion, with a gross margin of between 48% and 49% as customer demand for its extreme ultraviolet lithography systems, or EUV, machines, which design complex chips used by, sector titans such as Samsung Electronics (SSNLF) , Intel Corp. (INTCGet Report)  , as well as TSMC, and cost as much as €100 million each, increases.

Earlier this month, Apple CEO Tim Cook said iPhone 11 sales were off to a “strong start” following their mid-September launch, telling the widely-read German daily, Bild that he “could not be happier” with the early demand. 

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