Taiwan Semiconductor Manufacturing Co. (TSMC) posted record earnings in the second quarter, as the company has begun shipping chips built with its latest 20-nanometer manufacturing process. The company reported net profits of NT$59.7 billion (US$1.99 billion) for the second quarter of 2014, increasing 24.7% sequentially and 15.2% on year.

EPS for the second quarter stood at NT$2.30 compared to NT$1.85 in the previous quarter and NT$2 a year earlier, according to TSMC.

Gross margin for the second quarter was 49.8%, operating margin was 38.6%, and net profit margin was 32.6%.

Shipments of 28nm process technology accounted for 37% of total wafer revenues in the second quarter, while 40/45nm processes accounted for another 19%, TSMC said.

TSMC makes processors for Qualcomm, Nvidia and Apple. This year, the company expects to maintain "double-digit growth" as it deploys more-advanced chip-making technology to build faster and more power-efficient processors.

Last month, TSMC began shipping chips built with its 20-nanometer process, company chairman Morris Chang said during a conference call to discuss the financial results. The 20-nanometer can offer 30 percent higher speeds or 25 percent lower power consumption over TSMC’s older 28-nanometer manufacturing technology.

The 20-nanometer process will make up 10 percent of the company’s chip sales in the third quarter, and 20 percent in the fourth, Chang said.