Listen to the call, read the transcript and lets talk. Exciting times in the semiconductor industry, absolutely!
CC Wie opening statement:
"Based on the midpoint of our fourth-quarter revenue guidance, our full-year 2021 revenue is expected to grow about 24% year-over-year in the U.S. dollar term. On the inventory front, we continue to expect our customers and the supply chain to gradually prepare a higher level of inventory in the second half of this year as compared to the historical seasonal level. Given the industry continually needs to ensure supply security, we expect the supply chain to maintain a higher level of inventory for a longer period of time."
Companies are hoarding, absolutely. But for how long? When will the inventory correction happen? Mid 2022?
"In the near term, we continue to observe short-term imbalances due to interruptions in the supply chain brought over by COVID-19. We also continue to observe the structure increase in long-term demand, underpinned by the industry megatrends of 5G and HPC-related applications, and the higher silicon content in many end devices, including automotive, PCs, servers, networking, and smartphones."
Yes, the semiconductor industry is alive and well. Double digit growth numbers ahead, absolutely. I would also add that AI is hitting most every chip and that will increase die size and performance demands from new process technologies.
"While the short-term imbalances may or may not persist, we believe our technology leadership, will enable TSMC to capture the strong demand for our advanced and specialty technologies. And we expect our capacity to remain tight in 2021 and throughout 2022."
Agreed. TSMC is dominating 5nm HVM and 3nm design starts. This will be another 28nm market burst all over again. TSMC has clearly dominated the Foundry FinFET era, next is GAA and that could be anybody's game. Exciting times!
"Next, let me talk about TSMC as a long-term growth driver and return. We are entering a period of higher structural growth. The multiyear megatrend of 5G and HPC-related applications are expected to fuel massive requirement for computation power and propel the greater need for energy-efficient computing, which demand the use of leading-edge technologies.
This megatrend will not only spur unit growth, but also drive increasing semiconductor content in HPC, smartphone, automotive, and IoT applications. COVID-19 has also fundamentally accelerated the digital transformation making semiconductors more pervasive and essential in people's lives. With our technology leadership, manufacturing, excellence, and customer’s trust. TSMC is better positioned to capture the course from its favorable industry megatrend. We sell differentiated technologies."
Translation: TSMC is the one stop wafer shop with a massive design enablement ecosystem...
"Towards raise the structural increase in the long-term market demand profile. TSMC is working closely with our customers to plan our capacity and investing in leading-edge and specialty technologies to support their demand. Our capital investment decisions are based on four disciplines; technology leadership, flexible and responsive manufacturing, retaining customers' trust and earning the proper return."
This is a critical point and the key to TSMC's success, close collaboration, the massive ecosystem, enabled by TSMC's refusal to compete with customers or be frenemies. IDM foundries continue to struggle with this.
"At the same time, we faced manufacturing cost challenges due to an increase in process complexity at DD Note, new investment in mature notes, expansion of our global manufacturing footprint, and rising material in basic commodity cost. As we continue to work closely with our customers to support their goals, our pricing strategy will remain strategic, not opportunistic, to refer to our [Indiscernible] creation. We will also continue to work diligently with our supplier to deliver, and cost improvement.
Even us, we showed a greater burden of investment for the industry, by taking such actions we believe we can achieve a proper return that enables us to invest to support our customers, of course, and deliver long term profitable goals with 50% and higher gross margin for our shareholders. Now let me talk about our Japan fab print. We are expanding our manufacturing footprint to extend and enhance our competitive advantage in providing industry-leading technologies.
The world's largest [Indiscernible] capacity, efficient and cost-effective manufacturing, and to better serve our customer. Our global manufacturing expansion strategy is based on customers' needs, business opportunities, operating efficiency, and cost-economic considerations. After conducting due diligence, we announced our intention to build a specialty technology fab in Japan, subject to our Board of Directors' approval. We have received a strong commitment to supporting these projects from both our customers and the Japanese government. This fab will utilize 22, 28-nanometer technology for semiconductor wafer fabrication.
Fab construction is scheduled to begin in 2022 and production is targeted to begin in May 2024. Further details will be provided subject to the board's approval. We believe the expansion of our global manufacturing footprint will enable us to better serve our customer's needs in the rich, global talent, while early in the proper return from our investments and deliver long-term profitable quarters for our shareholders."
TSMC building fabs in the US, Japan, India, and elsewhere will bring us closer to world peace than ever before. It was said some time ago that as long as there is common business interests countries will stay at peace. McDonalds, Burger King, Pizza Hut, KFC, Starbucks, etc.... Let's hope semiconductors is better for the world than fast food franchises.
"Finally, I will talk about the N-3 and N-3E status. Our N-3 technology will use FinFET transistor’s structure to deliver the best technology maturity, performance, and cost for our customers. Our N3 technology development is on track. We had developed complete platform support for both HPC and smartphone applications. N-3 risk production is scheduled in 2021, and production was starting in the 2nd half of 2022. We continue to see a high level of customer engagement at N-3, and expect a newer tap-out for N-3 for the first year as compared with N-5. We also introduced N3E as an extension of our N3 family."
"N3E while feature improved manufacturing process window, with better performance, power, and yield. Volume production of N3E is scheduled for one year after N3. Our 3-nanometer technology will be the most advanced foundry technology in both PPA and transistor technology when it is introduced. With our technology leadership and strong customer demand, we are confident that the N3 family will be another long and vast -- will be a large and long-lasting node of TSMC. This concludes our key message. Thank you for your attention."
As I said before, the Apple version of N3 is on track for iProducts in 2022 with the commercial version N3E the following year. N3E will have less EUV steps for higher throughput and greater efficiencies from what I have been told.
Now let's talk about the Q&A:
TSMC 2021 Q3 Quarterly Results - Taiwan Semiconductor Manufacturing Company Limited
2021 Q3 Quarterly Results quarterly financial statements, presentation material, management report, earnings release earnings conference transcript. For more details regarding, please refer to TSMC IR website.
investor.tsmc.com
CC Wie opening statement:
"Based on the midpoint of our fourth-quarter revenue guidance, our full-year 2021 revenue is expected to grow about 24% year-over-year in the U.S. dollar term. On the inventory front, we continue to expect our customers and the supply chain to gradually prepare a higher level of inventory in the second half of this year as compared to the historical seasonal level. Given the industry continually needs to ensure supply security, we expect the supply chain to maintain a higher level of inventory for a longer period of time."
Companies are hoarding, absolutely. But for how long? When will the inventory correction happen? Mid 2022?
"In the near term, we continue to observe short-term imbalances due to interruptions in the supply chain brought over by COVID-19. We also continue to observe the structure increase in long-term demand, underpinned by the industry megatrends of 5G and HPC-related applications, and the higher silicon content in many end devices, including automotive, PCs, servers, networking, and smartphones."
Yes, the semiconductor industry is alive and well. Double digit growth numbers ahead, absolutely. I would also add that AI is hitting most every chip and that will increase die size and performance demands from new process technologies.
"While the short-term imbalances may or may not persist, we believe our technology leadership, will enable TSMC to capture the strong demand for our advanced and specialty technologies. And we expect our capacity to remain tight in 2021 and throughout 2022."
Agreed. TSMC is dominating 5nm HVM and 3nm design starts. This will be another 28nm market burst all over again. TSMC has clearly dominated the Foundry FinFET era, next is GAA and that could be anybody's game. Exciting times!
"Next, let me talk about TSMC as a long-term growth driver and return. We are entering a period of higher structural growth. The multiyear megatrend of 5G and HPC-related applications are expected to fuel massive requirement for computation power and propel the greater need for energy-efficient computing, which demand the use of leading-edge technologies.
This megatrend will not only spur unit growth, but also drive increasing semiconductor content in HPC, smartphone, automotive, and IoT applications. COVID-19 has also fundamentally accelerated the digital transformation making semiconductors more pervasive and essential in people's lives. With our technology leadership, manufacturing, excellence, and customer’s trust. TSMC is better positioned to capture the course from its favorable industry megatrend. We sell differentiated technologies."
Translation: TSMC is the one stop wafer shop with a massive design enablement ecosystem...
"Towards raise the structural increase in the long-term market demand profile. TSMC is working closely with our customers to plan our capacity and investing in leading-edge and specialty technologies to support their demand. Our capital investment decisions are based on four disciplines; technology leadership, flexible and responsive manufacturing, retaining customers' trust and earning the proper return."
This is a critical point and the key to TSMC's success, close collaboration, the massive ecosystem, enabled by TSMC's refusal to compete with customers or be frenemies. IDM foundries continue to struggle with this.
"At the same time, we faced manufacturing cost challenges due to an increase in process complexity at DD Note, new investment in mature notes, expansion of our global manufacturing footprint, and rising material in basic commodity cost. As we continue to work closely with our customers to support their goals, our pricing strategy will remain strategic, not opportunistic, to refer to our [Indiscernible] creation. We will also continue to work diligently with our supplier to deliver, and cost improvement.
Even us, we showed a greater burden of investment for the industry, by taking such actions we believe we can achieve a proper return that enables us to invest to support our customers, of course, and deliver long term profitable goals with 50% and higher gross margin for our shareholders. Now let me talk about our Japan fab print. We are expanding our manufacturing footprint to extend and enhance our competitive advantage in providing industry-leading technologies.
The world's largest [Indiscernible] capacity, efficient and cost-effective manufacturing, and to better serve our customer. Our global manufacturing expansion strategy is based on customers' needs, business opportunities, operating efficiency, and cost-economic considerations. After conducting due diligence, we announced our intention to build a specialty technology fab in Japan, subject to our Board of Directors' approval. We have received a strong commitment to supporting these projects from both our customers and the Japanese government. This fab will utilize 22, 28-nanometer technology for semiconductor wafer fabrication.
Fab construction is scheduled to begin in 2022 and production is targeted to begin in May 2024. Further details will be provided subject to the board's approval. We believe the expansion of our global manufacturing footprint will enable us to better serve our customer's needs in the rich, global talent, while early in the proper return from our investments and deliver long-term profitable quarters for our shareholders."
TSMC building fabs in the US, Japan, India, and elsewhere will bring us closer to world peace than ever before. It was said some time ago that as long as there is common business interests countries will stay at peace. McDonalds, Burger King, Pizza Hut, KFC, Starbucks, etc.... Let's hope semiconductors is better for the world than fast food franchises.
"Finally, I will talk about the N-3 and N-3E status. Our N-3 technology will use FinFET transistor’s structure to deliver the best technology maturity, performance, and cost for our customers. Our N3 technology development is on track. We had developed complete platform support for both HPC and smartphone applications. N-3 risk production is scheduled in 2021, and production was starting in the 2nd half of 2022. We continue to see a high level of customer engagement at N-3, and expect a newer tap-out for N-3 for the first year as compared with N-5. We also introduced N3E as an extension of our N3 family."
"N3E while feature improved manufacturing process window, with better performance, power, and yield. Volume production of N3E is scheduled for one year after N3. Our 3-nanometer technology will be the most advanced foundry technology in both PPA and transistor technology when it is introduced. With our technology leadership and strong customer demand, we are confident that the N3 family will be another long and vast -- will be a large and long-lasting node of TSMC. This concludes our key message. Thank you for your attention."
As I said before, the Apple version of N3 is on track for iProducts in 2022 with the commercial version N3E the following year. N3E will have less EUV steps for higher throughput and greater efficiencies from what I have been told.
Now let's talk about the Q&A: