Taiwan Semiconductor Manufacturing Co (TSMC) and rival United Microelectronics Corp (UMC) are enjoying strong chip demand for game consoles, as well as high-end mobile phones, DVD players and digital televisions.
However, share price of both firms have zig-zagged in recent months as investors were split over microchip demand for 2006, with some expecting slow but steady growth, while others fretting over macroeconomic factors like high oil prices.
TSMC reported October revenues of T$26.23 billion (US $778 million), up from T$22.97 billion a year ago and a 4 percent rise from T$25.23 billion in September to set its second consecutive record high.
UMC reported on Tuesday its October sales dipped just 10.2 percent from a year ago, approaching 2004's record high thanks to strong demand.
TSMC has said it expected fourth-quarter revenues of T$77 billion to T$79 billion, up from T$69.26 billion in the July-September quarter.
"I think their guidance might be too conservative. Looking at the October number, I would say there is potential to beat T$80 billion," said Macquarie Securities analyst Warren Lau.
TSMC has outperformed UMC in recent weeks, as it appeared to be catching up with UMC on winning high-profit orders for advanced chips using 90 nanometre circuits.