Semiwiki on LinkedIn Semiwiki on Facebook Semiwiki on Twitter Register / Log in 
Array
(
    [content] => 
    [params] => Array
        (
            [0] => /forum/index.php?threads/tsmc-1q22-discussion.15885/
        )

    [addOns] => Array
        (
            [DL6/MLTP] => 13
            [Hampel/TimeZoneDebug] => 1000070
            [SV/ChangePostDate] => 2010200
            [SemiWiki/Newsletter] => 1000010
            [SemiWiki/WPMenu] => 1000010
            [SemiWiki/XPressExtend] => 1000010
            [ThemeHouse/XLink] => 1000970
            [ThemeHouse/XPress] => 1010570
            [XF] => 2021370
            [XFI] => 1050270
        )

    [wordpress] => /var/www/html
)

TSMC 1Q22 Discussion

Daniel Nenni

Daniel Nenni

Admin
Staff member
Wow, amazing start of 2022 for TSMC. A record setting quarter leading to a record setting year, absolutely. Just wait until N3 kicks in!

TSMC Reports First Quarter EPS of NT$7.82 HSINCHU, Taiwan, R.O.C., Apr. 14, 2022 -- TSMC (TWSE: 2330, NYSE: TSM) today announced consolidated revenue of NT$491.08 billion, net income of NT$202.73 billion, and diluted earnings per share of NT$7.82 (US$1.40 per ADR unit) for the first quarter ended March 31, 2022. Year-over-year, first quarter revenue increased 35.5% while net income and diluted EPS both increased 45.1%. Compared to fourth quarter 2021, first quarter results represented a 12.1% increase in revenue and a 22.0% increase in net income.

All figures were prepared in accordance with TIFRS on a consolidated basis. In US dollars, first quarter revenue was $17.57 billion, which increased 36.0% year-over-year and increased 11.6% from the previous quarter. Gross margin for the quarter was 55.6%, operating margin was 45.6%, and net profit margin was 41.3%. In the first quarter, shipments of 5-nanometer accounted for 20% of total wafer revenue; 7- nanometer accounted for 30%. Advanced technologies, defined as 7-nanometer and more advanced technologies, accounted for 50% of total wafer revenue.

“Our first quarter business was supported by strong HPC and Automotive-related demand,” said Wendell Huang, VP and Chief Financial Officer of TSMC. “Moving into second quarter 2022, we expect our business to continue to be supported by HPC and Automotive-related demand, partially offset by smartphone seasonality.”

Based on the Company’s current business outlook, management expects the overall performance for second quarter 2022 to be as follows:
◼ Revenue to be between US$ 17.6 billion and US$ 18.2 billion
Based on our current business outlook, management expects: And, based on the exchange rate assumption of 1 US dollar to 28.8 NT dollars, management expects:
◼ Gross profit margin to be between 56% and 58%
◼ Operating profit margin to be between 45% and 47%

TSMC 1Q22 Revenue by Technology SemiWiki.jpg


TSMC 1Q22 Revenue by Platform SemiWiki.jpg
 
Twitterverse claiming they stated N2 would not be a 2-year offset schedule and would align with production in 2025, any of that recorded in a Transcript?

Also did they announce the Tech Symposium on the call? I just saw this has been posted to their site, and not sure how recent this is: https://www.tsmc.com/static/english/campaign/Symposium2022/index.htm; sadly for NA folks the June 16th session conflicts with VLSI Symposium :(
 
Daniel: Great start to the year for TSM. And the price action is simply astonishing. What are investors fearful of? A softening in demand for chips due to a worldwide recession? It is as if investors think the world is about to collapse. Well, it does provide an interesting opportunity.
 
mgoldsmith1979 said:
Twitterverse claiming they stated N2 would not be a 2-year offset schedule and would align with production in 2025, any of that recorded in a Transcript?

Also did they announce the Tech Symposium on the call? I just saw this has been posted to their site, and not sure how recent this is: https://www.tsmc.com/static/english/campaign/Symposium2022/index.htm; sadly for NA folks the June 16th session conflicts with VLSI Symposium :(
Click to expand...
You can check out the audio replay at TSMC's website here.

TSMC Earnings Call

webpage-ott2b.cdn.hinet.net

If I remember correctly...regarding N2, C.C. Wei indicated that they would start risk production in 2025 and volume production in 2H2025. He appeared to suggest that volume production would happen toward the end of 2025. C.C. did stress that he believed that TSMC's N2 would be be This was actually the biggest and only disappointing news TSMC had the whole evening.
 
mgoldsmith1979 said:
Twitterverse claiming they stated N2 would not be a 2-year offset schedule and would align with production in 2025, any of that recorded in a Transcript?
Also did they announce the Tech Symposium on the call? I just saw this has been posted to their site, and not sure how recent this is: https://www.tsmc.com/static/english/campaign/Symposium2022/index.htm; sadly for NA folks the June 16th session conflicts with VLSI Symposium :(
Click to expand...

TSMC N2 will be discussed in more detail during the Symposium:

www.tsmc.com

Technology Symposium 2022 - Taiwan Semiconductor Manufacturing Company Limited

As the semiconductor industry emerges from the global health crisis and leads the way to economic recovery; TSMC, our customers and partners will gather together at the 2022 TSMC Technology Symposiums.
www.tsmc.com www.tsmc.com

Tables 777 said:
Daniel: Great start to the year for TSM. And the price action is simply astonishing. What are investors fearful of? A softening in demand for chips due to a worldwide recession? It is as if investors think the world is about to collapse. Well, it does provide an interesting opportunity.
Click to expand...

Personally I think the concern is excess inventories due to the double ordering and future oversupply due to the CAPEX race between Intel, Samsung, and TSMC. This will be a record year for TSMC and it is only downhill from there it seems. Intel will probably be the #1 TSMC customer at N3 for 2024.
 
Daniel Nenni said:
Wow, amazing start of 2022 for TSMC. A record setting quarter leading to a record setting year, absolutely. Just wait until N3 kicks in!

TSMC Reports First Quarter EPS of NT$7.82 HSINCHU, Taiwan, R.O.C., Apr. 14, 2022 -- TSMC (TWSE: 2330, NYSE: TSM) today announced consolidated revenue of NT$491.08 billion, net income of NT$202.73 billion, and diluted earnings per share of NT$7.82 (US$1.40 per ADR unit) for the first quarter ended March 31, 2022. Year-over-year, first quarter revenue increased 35.5% while net income and diluted EPS both increased 45.1%. Compared to fourth quarter 2021, first quarter results represented a 12.1% increase in revenue and a 22.0% increase in net income.

All figures were prepared in accordance with TIFRS on a consolidated basis. In US dollars, first quarter revenue was $17.57 billion, which increased 36.0% year-over-year and increased 11.6% from the previous quarter. Gross margin for the quarter was 55.6%, operating margin was 45.6%, and net profit margin was 41.3%. In the first quarter, shipments of 5-nanometer accounted for 20% of total wafer revenue; 7- nanometer accounted for 30%. Advanced technologies, defined as 7-nanometer and more advanced technologies, accounted for 50% of total wafer revenue.

“Our first quarter business was supported by strong HPC and Automotive-related demand,” said Wendell Huang, VP and Chief Financial Officer of TSMC. “Moving into second quarter 2022, we expect our business to continue to be supported by HPC and Automotive-related demand, partially offset by smartphone seasonality.”

Based on the Company’s current business outlook, management expects the overall performance for second quarter 2022 to be as follows:
◼ Revenue to be between US$ 17.6 billion and US$ 18.2 billion
Based on our current business outlook, management expects: And, based on the exchange rate assumption of 1 US dollar to 28.8 NT dollars, management expects:
◼ Gross profit margin to be between 56% and 58%
◼ Operating profit margin to be between 45% and 47%

View attachment 710

View attachment 711
Click to expand...
While Q1 2022 36% YoY revenue growth is impressive, the YoY revenue growth for Q2 2022 is significant as well. TSMC Q2 2021 revenue was US13.29 billion and Q2 2022 revenue will be between US$17.6-18.2 billion, according to the guidance given yesterday. It means Q2 2022 YoY growth will be between 32.43% and 36.95%.

Typically TSMC's Q3 and Q4 contribute the largest share to their whole year revenue. Using TSMC US$56.82 billion 2021 revenue as the base and assume a 30% YoY growth, TSMC can achieve US$73.866 billion 2022 revenue. If we reduce the growth rate to 25%, TSMC possibly can reach US$71.025 billion 2022 revenue.

Intel 2022 revenue guidance is set at US$76 billion currently.
 
Last edited:
From the transcript:

CC Wei:

2022 will be another strong growth year for TSMC. And we expect our full year growth to likely be at or exceed the high end of our guidance range of mid- to high 20s percent in U.S. dollar terms.

Next, given the recent constraint in the tool supply chain, let me talk about the tool delivery update. As a major player in the global semiconductor supply chain, TSMC worked closely with all our tool suppliers to plan our CapEx and capacity in advance. However, like many other industries, our suppliers are facing great challenges in their supply chain from the continued impact of COVID-19, which are creating labor, component, and chip constraint in their supply chains and extending tool delivery lead time for both advanced and mature nodes. TSMC is working closely with our suppliers and taking several actions to do our part to help address the supply chain challenges. We have increased regular high-level communications to trace the progress.

We have sent several teams on-site to support our suppliers and are working closely with them to identify critical chips that are gauging the tool delivery. We are working with our customers to prioritize our wafer capacity to support those critical chips to help mitigate the chip constraint issue. By taking such actions, we do not expect any impact to our 2022 capacity plan, and we continue to work closely with our suppliers on 2023 and beyond so that we can ramp-up our capacity to meet customers’ demand.

For specialty chemicals and gases, including Neon and Xenon we source from multiple suppliers in different regions, and we have prepared a certain level of inventory stock on hand. We are also working closely with our suppliers to further strengthen the resilience and the sustainability of our supply chain. Thus, we do not expect any impact on our operations from materials supply.

Finally, let me talk about the N3 and N3E status. Our N3 technology will use FinFET transistor structure to deliver the best technology maturity, performance and cost for our customers. Our N3 schedule is unchanged, and we’re on track for volume production in second half of 2022 with good year. We expect the ramp of N3 to be driven by both HPC and smartphone applications. We continue to see a high level of customer engagement at N3 and expect more new tape-outs for N3 for the [first] year as compared with N5 and N7. N3E will further extend our N3 family with enhanced performance, power and yield. We also observed a high level of customer engagement at N3E, and volume production is scheduled for 1 year after N3.

I mean that our N3E result is quite good. And the progress is actually -- is ahead of our schedule. And pull in, yes, we are considering that. So far, I still did not have a very solid data to share with you that how many months we can pull in. But yes, it’s in our plan. And also the capacity, since we have a very strong demand on the N3 and N3E, we are still planning to have enough capacity to support our customer.

Our N2 development is on track, including new transistor structure and progressing to our expectation. We expect our N2 delivery to be the best technology, maturity, performance and cost for our customers. And we are confident that N2 will continue our technology leadership to support our customer growth. And we still plan the production in 2025.

Our progress so far today for the N2 is on track. And all I want to say is, yes, at the end of 2024, you will enter the risk production. 2025, it will be in production, probably close to the second half or the -- or the end of 2025. That’s our schedule.

This question was not answered however:

Okay. So Mehdi’s second question is on N2, a very specific question. He wants to know with N2, there’s a change in transistor structure.

Comments? What is TSMC's new transistor structure? Will TSMC call GAA something different? Or could it be a newer version of FinFETs?

seekingalpha.com

Taiwan Semiconductor Manufacturing Company Limited (TSM) CEO C. C. Wei on Q1 2022 Results - Earnings Call Transcript

Taiwan Semiconductor Manufacturing Company Limited (NYSE:NYSE:TSM) Q1 2022 Results Conference Call April 14, 2022 2:00 AM ETCompany ParticipantsJeff Su -...
seekingalpha.com seekingalpha.com
 
Last edited:
Daniel Nenni said:
From the transcript:

CC Wei:

2022 will be another strong growth year for TSMC. And we expect our full year growth to likely be at or exceed the high end of our guidance range of mid- to high 20s percent in U.S. dollar terms.

We have sent several teams on-site to support our suppliers and are working closely with them to identify critical chips that are gauging the tool delivery. We are working with our customers to prioritize our wafer capacity to support those critical chips to help mitigate the chip constraint issue. By taking such actions, we do not expect any impact to our 2022 capacity plan, and we continue to work closely with our suppliers on 2023 and beyond so that we can ramp-up our capacity to meet customers’ demand.

For specialty chemicals and gases, including neon and xeon we source from multiple suppliers in different regions, and we have prepared a certain level of inventory stock on hand. We are also working closely with our suppliers to further strengthen the resilience and the sustainability of our supply chain. Thus, we do not expect any impact on our operations from materials supply.

Finally, let me talk about the N3 and N3E status. Our N3 technology will use FinFET transistor structure to deliver the best technology maturity, performance and cost for our customers. Our N3 schedule is unchanged, and we’re on track for volume production in second half of 2022 with good year. We expect the ramp of N3 to be driven by both HPC and smartphone applications. We continue to see a high level of customer engagement at N3 and expect more new tape-outs for N3 for the [first] year as compared with N5 and N7. N3E will further extend our N3 family with enhanced performance, power and yield. We also observed a high level of customer engagement at N3E, and volume production is scheduled for 1 year after N3.

I mean that our N3E result is quite good. And the progress is actually -- is ahead of our schedule. And pull in, yes, we are considering that. So far, I still did not have a very solid data to share with you that how many months we can pull in. But yes, it’s in our plan. And also the capacity, since we have a very strong demand on the N3 and N3E, we are still planning to have enough capacity to support our customer.

Our N2 development is on track, including new transistor structure and progressing to our expectation. We expect our N2 delivery to be the best technology, maturity, performance and cost for our customers. And we are confident that N2 will continue our technology leadership to support our customer growth. And we still plan the production in 2025.

Our progress so far today for the N2 is on track. And all I want to say is, yes, at the end of 2024, you will enter the risk production. 2025, it will be in production, probably close to the second half or the -- or the end of 2025. That’s our schedule.

This question was not answered however:

Okay. So Mehdi’s second question is on N2, a very specific question. He wants to know with N2, there’s a change in transistor structure.

Comments? What is TSMC's new transistor structure? Will TSMC call GAA something different? Or could it be a newer version of FinFETs?

seekingalpha.com

Taiwan Semiconductor Manufacturing Company Limited (TSM) CEO C. C. Wei on Q1 2022 Results - Earnings Call Transcript

Taiwan Semiconductor Manufacturing Company Limited (NYSE:NYSE:TSM) Q1 2022 Results Conference Call April 14, 2022 2:00 AM ETCompany ParticipantsJeff Su -...
seekingalpha.com seekingalpha.com
Click to expand...
The official transcript is now available on TSMC's website.

https://investor.tsmc.com/english/e...3c7a8d223f0f689663da/TSMC 1Q22 Transcript.pdf
 
Tables 777 said:
Daniel: Great start to the year for TSM. And the price action is simply astonishing. What are investors fearful of? A softening in demand for chips due to a worldwide recession? It is as if investors think the world is about to collapse. Well, it does provide an interesting opportunity.
Click to expand...
The chip industry is cyclical, and given the amount of capex over the last 2 years there may be a semiconductor glut in 1-2 years time as new fabs come online.
 
count said:
The chip industry is cyclical, and given the amount of capex over the last 2 years there may be a semiconductor glut in 1-2 years time as new fabs come online.
Click to expand...

I think the lack of semiconductor equipment will keep new fab capacity in check. My bet would be that Intel and Samsung scale back CAPEX plans while TSMC holds the course. Intel will eat up more leading edge TSMC capacity while Samsung leading edge logic is yield blocked and they have more competition in the memory markets. Exciting times for sure.
 
Daniel Nenni said:
I think the lack of semiconductor equipment will keep new fab capacity in check. My bet would be that Intel and Samsung scale back CAPEX plans while TSMC holds the course. Intel will eat up more leading edge TSMC capacity while Samsung leading edge logic is yield blocked and they have more competition in the memory markets. Exciting times for sure.
Click to expand...
Sounds like you are saying "This time it's different"
 
It could be different this time, and still rhyme.
The difference is the pent up demand which could be counter cyclical.
The rhyming would be something like capa glut driving prices in commodities like DRAM down. Are logic chips succeptible to commodification?
 
count said:
Sounds like you are saying "This time it's different"
Click to expand...

The difference is Intel. TSMC and Samsung have had a private CAPEX battle for years now but Pat Gelsinger has upped the ante with his public reshoring narrative. The possibility of Intel getting many billions of CAPEX from the US and foreign governments seems to be a threat to TSMC. It's a high stakes poker game but it has supply chain limitations and I would give TSMC the advantage managing the supply chain. We went through something similar when China decided to fund semiconductor reshoring with $100s of billions of dollars. Unfortunately they did not have a leader like Pat Gelsinger or CC Wei.
 
hist78 said:
TSMC Q2 2021 revenue was US13.29 billion and Q2 2022 revenue will be between US$16.6-17.2 billion, according to the guidance given yesterday. It means Q2 2022 YoY growth will be between 24.91% and 29.42%.
Click to expand...

TSMC 2Q22 revenue guidance is $17.6B to $18.2B (midpoint $17.9B).... You're range is a billion low.

Such guidance equates to QOQ revenue growth rate of 4.4% to 8.0% (midpoint 6.2%), and a YOY revenue growth rate of 37.8% to 42.5% (midpoint 40.2%).

1Q22 was 3.5% over the high end of revenue guidance.
 
I'm in the camp that think there is likely going to be a recession around the corner - maybe 6-12 months away. Right now we have both semiconductor capex and demand growth in the 30% range. Even if demand growth were to fall back to a still very healthy 10%, we'd likely see a glut. If demand shrinks due to a recession there will be a lot of underutilized fabs in 2 years.
 
Daniel Nenni said:
TSMC N2 will be discussed in more detail during the Symposium:

www.tsmc.com

Technology Symposium 2022 - Taiwan Semiconductor Manufacturing Company Limited

As the semiconductor industry emerges from the global health crisis and leads the way to economic recovery; TSMC, our customers and partners will gather together at the 2022 TSMC Technology Symposiums.
www.tsmc.com www.tsmc.com



Personally I think the concern is excess inventories due to the double ordering and future oversupply due to the CAPEX race between Intel, Samsung, and TSMC. This will be a record year for TSMC and it is only downhill from there it seems. Intel will probably be the #1 TSMC customer at N3 for 2024.
Click to expand...
You might be right about that. But isn't that putting the cart before the horse? Is there any evidence that is the case. Last I heard, everyone is talking continued shortages into next year.
 
You must log in or register to reply here.
Back
Top