The world’s largest contract chip manufacturer thinks a turnaround in the semiconductor market is finally near. Demand related to artificial intelligence will also be a long-term boost—one that is already bumping up against supply constraints.

The inventory buildup in the semiconductor supply chain has weighed on Taiwan Semiconductor Manufacturing Co. for the past few quarters. On Thursday it reported an 11% year-on-year decline in revenue for the quarter ended in September. Net profit fell 25%. But both came out ahead of analysts’ forecasts on S&P Global Market Intelligence.