TAIPEI (Reuters) -Taiwan Semiconductor Manufacturing Co, the dominant producer of advanced chips used in artificial intelligence applications, reported on Thursday a forecast-beating 54% jump in third-quarter profit on the back of soaring demand.

The world's largest contract chipmaker, whose customers include Apple and Nvidia, has benefited from a surge towards AI across a spectrum of industries.

TSMC posted a net profit of T$325.3 billion ($10.11 billion) for the quarter ended Sept. 30, compared with the T$300.2 billion predicted by an LSEG SmartEstimate drawn from 22 analysts. SmartEstimates give greater weighting to forecasts from analysts who are more consistently accurate.

TSMC, Asia's most valuable publicly listed company, said third-quarter revenue rose 36% year-on-year to $23.5 billion, better than the company's previous forecast of $22.4 billion to $23.2 billion. The company last week announced third-quarter revenue in Taiwan dollars, coming in at T$759.69 billion.

Capital expenditure in the third quarter was $6.4 billion, TSMC said, compared with $6.36 billion in the second quarter.

On Tuesday, ASML, the world's biggest chipmaking equipment supplier to companies including TSMC, forecast lower than expected 2025 sales and bookings on sustained weakness in parts of the chip market, pushing the Dutch firm's shares to their biggest one-day drop since 1998.

TSMC, at its quarterly earnings call starting at 0600 GMT on Thursday, will update its outlook for the current quarter as well as for the full year, including its capital expenditure, as it races to expand production.

The chipmaker is spending billions of dollars building new factories overseas, including $65 billion on three plants in the U.S. state of Arizona, though it has said most manufacturing will remain in Taiwan.

On its last earnings call in July, TSMC raised its full-year revenue forecast and adjusted its capital expenditure plans for this year to between $30 billion and $32 billion, compared with a previous forecast of $28 billion to $32 billion.

The second half of the year is traditionally the peak season for Taiwanese tech companies as they race to supply customers ahead of the year-end holiday season in major Western markets.

The AI boom has helped drive up TSMC shares, with its Taipei-listed stock leaping 75% so far this year, compared with a 28% gain for the broader market, giving it a market capitalisation of around $840 billion.

TSMC, colloquially referred to in Taiwan as the "sacred mountain protecting the country" for its critical role in Taiwan's export-dependent economy, faces little competition, though both Intel and Samsung are trying to challenge its dominance.

($1 = 32.1700 Taiwan dollars)

(Reporting by Yimou Lee, Ben Blanchard and Faith Hung; Editing by Christopher Cushing and Muralikumar Anantharaman)