TSMC 3rd Quarter Earnings Call Extras
-N7 weakness impact on Kaohsiung project
-N3, N3E and N2 details
-TSMC CEO on scaling
-Inventories at 25-year high?
-Overseas fab projects
-Final financials
1/11 Thread $TSM #semiconductors
-N7 weakness impact on Kaohsiung project
-N3, N3E and N2 details
-TSMC CEO on scaling
-Inventories at 25-year high?
-Overseas fab projects
-Final financials
1/11 Thread $TSM #semiconductors
2/11 N7 and Kaohsiung fab
N7, N6 capacity utilization in Q4 and 1st half 2023 will be down due to weakness in smartphones, PCs and product delays by customers.
Kaohsiung fab plan impacted:
2 fabs planned initially for Kaohsiung, 28nm and N7, “but N7 has been adjusted.”-CEO
$TSM
N7, N6 capacity utilization in Q4 and 1st half 2023 will be down due to weakness in smartphones, PCs and product delays by customers.
Kaohsiung fab plan impacted:
2 fabs planned initially for Kaohsiung, 28nm and N7, “but N7 has been adjusted.”-CEO
$TSM
3/11 TSMC CEO on N3
-will be in mass production later in Q4 with good yield
-capacity will be fully utilized in 2023
-demand exceeds supply, partly due to tool delivery issues
-working with tool supplier to resolve issues to meet “strong demand in 2023, 2024 and beyond.”
-will be in mass production later in Q4 with good yield
-capacity will be fully utilized in 2023
-demand exceeds supply, partly due to tool delivery issues
-working with tool supplier to resolve issues to meet “strong demand in 2023, 2024 and beyond.”
4/11 N3 family
-N3 revenue will be higher in 2023 than N5 in its first year in 2020
-N3 will contribute mid-single-digit percent (4%-6%?) revenue in 2023
-Heavy customer interest. More than 2x tape outs for N3/N3E than for N5 in its 1st and 2nd year.
$TSM #semiconductors
-N3 revenue will be higher in 2023 than N5 in its first year in 2020
-N3 will contribute mid-single-digit percent (4%-6%?) revenue in 2023
-Heavy customer interest. More than 2x tape outs for N3/N3E than for N5 in its 1st and 2nd year.
$TSM #semiconductors
5/11 TSMC N3E process
-N3E (enhanced N3) developing ahead of plan.
-N3E mass production now seen in 2nd half 2023 (2 to 3 months early)
-TSMC faces gross margin dilution of 2 to 3 percentage points (full-year basis) due to the N3 ramp.
$TSM #semiconductors
-N3E (enhanced N3) developing ahead of plan.
-N3E mass production now seen in 2nd half 2023 (2 to 3 months early)
-TSMC faces gross margin dilution of 2 to 3 percentage points (full-year basis) due to the N3 ramp.
$TSM #semiconductors
6/11 TSMC CEO on N2
-N3 and N2 will deliver full-node strides in performance, power
-N2 progress is “a little bit ahead” of schedule.
-Reiterates N2 mass production in 2025.
-N2 customer engagement is very high, comparable with N3 and N5
$TSM #semiconductors
-N3 and N2 will deliver full-node strides in performance, power
-N2 progress is “a little bit ahead” of schedule.
-Reiterates N2 mass production in 2025.
-N2 customer engagement is very high, comparable with N3 and N5
$TSM #semiconductors
7/11 TSMC N2 and beyond
CEO “…geometry shrink is slowing down and becoming more challenging due to rising process complexity.” But there is also strong demand from customers.
(willingness to pay)
$TSM #semiconductors
CEO “…geometry shrink is slowing down and becoming more challenging due to rising process complexity.” But there is also strong demand from customers.
(willingness to pay)
$TSM #semiconductors
8/11 Inventories
CEO: Inventory correction will likely see its biggest impact in the 1st half of 2023.
Susquehanna Financial: TSMC customers’ days of inventory are at a 25-year high, is the 1st half view realistic?
CEO: still working with customers to understand situation.
CEO: Inventory correction will likely see its biggest impact in the 1st half of 2023.
Susquehanna Financial: TSMC customers’ days of inventory are at a 25-year high, is the 1st half view realistic?
CEO: still working with customers to understand situation.
9/11 TSMC Overseas Fabs All on Schedule
Arizona, USA: Necessary due to "very strong demand" for N5.
Nanjing, China – Obtained 1-year U.S. authorization for 28/16nm, so on schedule
Kumamoto, Japan – “is on schedule to meet customer’s demand.”
$TSM #semiconductors
Arizona, USA: Necessary due to "very strong demand" for N5.
Nanjing, China – Obtained 1-year U.S. authorization for 28/16nm, so on schedule
Kumamoto, Japan – “is on schedule to meet customer’s demand.”
$TSM #semiconductors
10/11 TSMC Q3 extras
TSMC's ROE was 42.9%
TSMC ended Q3 with NT$1.5 trillion (US$47 billion) in cash and marketable securities.
Q3 revenue rose 14.8% over Q2 on strong demand for N5 family
Q3 gross margin 60.4% beat guidance due to exchange rate, cost improvements.
$TSM
TSMC's ROE was 42.9%
TSMC ended Q3 with NT$1.5 trillion (US$47 billion) in cash and marketable securities.
Q3 revenue rose 14.8% over Q2 on strong demand for N5 family
Q3 gross margin 60.4% beat guidance due to exchange rate, cost improvements.
$TSM
11/11 TSMC Long Term
-Long term gross margin of 53% and higher is achievable
-Long term revenue growth of 15% to 20% CAGR over next several years
-Long term capital intensity seen mid-to-high 30% (35%-39%?)
$TSM #semiconductors
-End
-Long term gross margin of 53% and higher is achievable
-Long term revenue growth of 15% to 20% CAGR over next several years
-Long term capital intensity seen mid-to-high 30% (35%-39%?)
$TSM #semiconductors
-End
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