Taiwan Semiconductor Manufacturing Co. posted a record third quarter profit earlier today. The world's largest contract chip maker earned a net profit of 49.3 billion New Taiwan dollars ($1.69 billion USD), good for a 62 percent jump from a year ago and topping estimates from nearly two dozen analysts.

Demand for smartphones and tablets powered by TSMC chips continue to grow even as economic growth slows. The company's flagship 28-nanometer technology has given them an advantage over the competition and is directly responsible for doubling chip shipments in the third quarter. TSMC says chips built on this process accounted for 13 percent of total wafer revenue.

TSMC Chairman Morris Chang is pessimistic moving forward and expects to see revenue fall slightly in the final three months of 2012. Major companies like Intel have adjusted their forecast and will be scaling back production in the fourth quarter citing weaker than expected demand.

Despite the gloomy fourth quarter forecast, TSMC feels they are well-prepared for 2013 and beyond. Chang believes TSMC will continue to outgrow the semiconductor industry in the coming years because they have positioned themselves well for the smartphone and tablet markets.

That belief is backed up by the fact that they will begin to transition to 16-nanometer technology next year with plans to launch trial production by the end of 2013. They are also working with SK Hynix and Micron to develop three-dimensional chip packaging technology that sounds a lot like Intel's tri-gate transistor technology found in Ivy Bridge processors.