Q&A
Gokul Hariharan, Analyst, J.P. Morgan: Thank you and Happy New Year. So, C.C., it definitely feels like you’ve heard what your customers have said to you over the last three, four months. Could you give us a little bit more color on what you’re hearing from your customers, customers on demand? Because this is a very big step up in the capacity commitment. There is definitely a lot of concern in the financial market, especially about whether we are in a bit of a bubble. And obviously you are the one who is putting up all the capital in this industry, so you’ve definitely considered this very carefully as well. So give us a little bit more detail in terms of what you’re hearing from the customers and your views on this cycle.
Given if we think about typical semiconductor cycle, we’ve already probably lasted a little bit longer than usual cycles, but this definitely doesn’t feel like a typical semiconductor cycle.
Jeff Hsu, Director of Investor Relations, TSMC: Okay, Gokul, let me summarize your question for the benefit of those online and those in person. So again, Gokul’s question is really he would like to hear CC’s views about the overall AI related demand and the semiconductor cycle. So again he Gokul notes that as Wendell and Yu said, we are substantially stepping up our CapEx to support the customers. But he does say, you know, there is concerns about an AI bubble and risk. So part of Gokul’s question is how, what is the feedback? Any color we can share about what type of discussions and feedback we’re getting from both customers and the customers customers that CC mentioned and how long do we think this cycle can last?
C.C. Wei, Chairman and CEO, TSMC: Okay, Gokul, you essentially try to ask whether the AI demand is real or not. I’m also very nervous about it. You bet. Because we have to invest about $52 billion-$56 billion for the CapEx, right? If we didn’t do it carefully and that would be a big disaster to TSMC for sure. So of course I spend a lot of time in the last three or four months talking to my customer and then customers. Customer. I want to make sure that my customers demand are real. So I talk to those cloud service providers, all of them. Their answer is. I’m quite satisfied with their answer. Actually they show me the evidence that the AI really help their business. So they grow their business successfully and he or she in their financial return. So I also double check their financial status. They are very rich.
That sounds much better than TSMC. No doubt. I also asked specifically that what’s the application? Right? I mean that’s for one of the hyperscaler. They told me that that helped their social media software and so the customer continue to increase. I believe that and with our own experience in the AI application, we also help to our own fab to improve the productivity. As I mentioned one time say that 1% or 2% productivity improvement that is free to TSMC. That’s why also our gross margin is a little bit satisfied, you know, even in this very high cost period of time. All in all, I believe in my point of view the AI is real. Not only real, is starting to grow into our daily life. We believe that is kind of. We call it AI Megatrend.
We certainly would believe that. So another question is, can the semiconductor industry to be good for three, four, five years in a row? I’ll tell you the truth, I don’t know. But I look at the AI looks like it is going to be like endless. I mean that’s for many years to come. No matter what. TSMC stick on the fundamental technology, leadership, manufacturing excellence. And we work with customers to get their trust. And I think that fundamental thing why position TSMC to be very good future growth? Let me say that 25% CAGR as we projected. And we used to be conservative, you know that.
Gokul Hariharan, Analyst, J.P. Morgan: Thanks. Thanks, C.C. My second question is on the U.S. expansion. You’re pulling in some of the capacity in response to customers. You’re already starting plans for the phase four. There’s a lot of media reports about TSMC. You might have to build more fabs in the U.S. How should we think about U.S. expansion in principle over the next few years? I think previously you had talked about reaching 20% or even 30% of 2 nanometer capacity in the U.S. eventually the total capacity could be in the U.S. Could you give us a little bit more detail about how that is progressing and when could we get there in terms of the 30% or even 20% capacity?
Jeff Hsu, Director of Investor Relations, TSMC: Okay, so Gokul’s second question is about our overseas expansion, particularly in the U.S. He notes that C.C. said we are pulling in the schedule for the Fab 2 earlier. You know, we’re starting the application for the fourth Fab. And so his question is partly around recent reports that we intend to build more fabs in Arizona. So his question is how should we or how is TSMC thinking about the future expansion in Arizona? And we have said in the past that, you know, around 30% of our nanometer and more advanced capacity would be based in Arizona once we complete scaling out to this independent Gigafab cluster. So what is the time frame or timetable for that? How quickly can we get there?
C.C. Wei, Chairman and CEO, TSMC: That’s a long question. We build a fab in Arizona and we work hard. So today everything, even the yield or defect density is almost equal to Taiwan. And due to the strong demand, as I just answered from the AI stronger, that’s a megatrend. All my AI customers are in the U.S. So they ask a lot of support from the U.S. So because of that we have to speed up our fab expansion in Arizona in Taiwan also. Actually we increase most of the capacity in Taiwan. No doubt about it, because this is most advanced one. We can progress very well in the U.S. We try to speed it up and progress is very good. We got the help from the government. Still we have to meet all the requirements for the permits or for those kind of things.
Both in Taiwan and in Arizona we speeded up our capacity expansion to meet the AI demand. I can always say one word, the capacity is very tight. We work very hard to narrow the gap so far probably this year, next year we have to work extremely hard to narrow the gap. We just bought a second land in Arizona. Let’s give you a hint. That’s what we plan to do because we need it. We are going to expand many fabs over there and this Gigafab cluster can help us to improve the productivity, to drive down the cost and to serve our customer in the U.S. better. Okay.
Jeff Hsu, Director of Investor Relations, TSMC: Okay, thank you Gokul. Let’s move over here next to Laura Chen from Citibank please.
Laura Chen, Analyst, Citibank: Thank you. Thank you CC and Wendell for very comprehensive outlook briefing and also congratulate for the great result. Of course we see that the AI semiconductor growth has seen very strong growth and I believe all of your customer and customers customers very desperate to ask more capacity support from TSMC. But I’m just wondering how does TSMC evaluate the potential power electricity supply for data center? So other than that the chips we can discuss with our customers. I think for the overall infrastructure buildup for data center a lot of factor also very important. Just want to understand more how does TSMC evaluate those key factors for the AI infrastructure buildup? And my first question, okay, so Laura’s.
Jeff Hsu, Director of Investor Relations, TSMC: First question is around the AI demand. She notes again, as we said, AI megatrend and the growth is very strong and customers and ourselves are strong believers. But when we do our planning, how do we balance this against the other considerations? Do we look at things. For example, I think Laura’s question is power electricity grid availability to basically assess is this part of our included as part of our planning process. Do we factor such things in?
C.C. Wei, Chairman and CEO, TSMC: Lora, let me tell you first I worry about the electricity in Taiwan first. I need to have a lot of enough electricity so I can start to expand the capacity without any limitation. But talking about build a lot of AI data center all over the world, I use one of my customers. I answer because I asked the same question. They told me that they planned this one five, six years ago already. So as I said, those cloud service provider are smart, very smart. If I knew that I would anyway. So they say that they work on the power supply five, six years ago. So today their message to me is silicon from TSMC is a bottleneck and asked me not to pay attention to all others because they have to solve the silicon bottleneck first.
But indeed we look at the power supply, you know, all over the world, especially in the U.S. Not only that, we also look at who support those kind of power supply like a turbine, like nuclear power plant, the plant, all those kind of things. We also look at the supply of the rack. We also look at the supply of the cooling system. Everything so far so good. So we have to work hard to narrow the gap between the demand and supply from TSMC. Did that answer your question?
Laura Chen, Analyst, Citibank: That’s great to know that it would not be the constraints for the further AI developments. Yeah, thank you. And my second question is on the leading edge advanced packaging, when can you remind us that what would be the revenue contribution last year for the advanced packaging overall? First of all, we see that I recall that in the past the CapEx for leading edge advanced packaging, roughly about 10%. Yeah. But now it could be up to like a 20%. So I’m just wondering that for the expansion, can you give us more detail about what kind of the plans you are looking for? Will you focus more on like 3DIC, SoIC or you also start to work on more advanced like a panel base in the longer term?
I also think before we talk about that, we’ll work more closely with OSAT’s partner on the leading edge advanced packaging. So just wondering what kind of the process will be the key expansion plan in the space. Thank you.
Jeff Hsu, Director of Investor Relations, TSMC: Okay, so Laura’s second question is more related to advanced packaging. What was the revenue contribution of what we call the back end, which is advanced packaging testing as a whole in 2025? And then she notes the CapEx, actually this year I believe window, we guided 10%-20% of CapEx, which is the same as last year. But anyways, she wants to know what is the focus of this CapEx? Is, is it on 3DIC, is it on SoIC Packaging Solutions on panel level? Sort of. What is the key areas we’re focusing on relative to the CapEx?
Wendell Huang, CFO, TSMC: Okay, Laura, the revenue contribution last year from advanced packaging is close to 10%. It’s about 8% for this year. We expect it to be slightly over 10%. We expect it to grow in the next five years higher or faster than the corporate and the CapEx. Yes, you’re right. In the past is about 10% lower than 10%. Now we’re saying advanced packaging together with mask making and others accounted for between 10% to 20%. So you can see that the investment amount is higher and we’re investing in areas in advanced packaging where our customers need. So the areas that you mentioned, basically we continue to invest.
Jeff Hsu, Director of Investor Relations, TSMC: Thank you, Wendell. Okay, let’s move on to Charlie Chan from Morgan Stanley here.
C.C. Wei, Chairman and CEO, TSMC: Thanks Jeff.
Charlie Chan, Analyst, Morgan Stanley: Happy New Year, C.C. and Wendell. So first of all, amazing results and guidance. Congratulations to the management team. So my first question is about outside of AI, what do you see for those end markets? Right? You talk about the memory cost, etc. So can you give us some kind of your underlying assumption for PC shipments, smartphone shipments, etc. And also in your HPC there are some other pieces like networking and general service. Can you comment about the growth potential for those segments? Thank you.
Jeff Hsu, Director of Investor Relations, TSMC: Okay, Charlie’s first question is very specific. Well, generally he wants to know about how do we see the non AI demand, especially in the context where the, you know, certain component costs, such as memory costs are rising. So he wants to know what do we see the impact on the PC and smartphone markets in terms of shipments. He’s also asking very specifically what about networking, what about general server? Each these different segments.
C.C. Wei, Chairman and CEO, TSMC: Charlie, those also we say is called non AI, but actually that related to AI. You know that, right? Because of networking processor, you still need to have AI data to scale up or scale out. Those are the networking switches, all those kind of things. It still grow very strong. As for PC or the smartphone, to tell the truth, we expect higher memory supplies. So we expect the unit cores would be very minimal. But for TSMC, we did not feel our customers change their behavior and we look at it and then we find out that we supply most of the high end smartphones. The high end smartphone is less sensitive to the memory supplies so the demand is still strong. Using one sentence I’d like to say we still try very hard to narrow the gap. We have to supply a lot of wafers to them also.
Charlie Chan, Analyst, Morgan Stanley: Thanks, C.C. I think that’s very consistent with your five-year CAGR outlook for all the four segments. And my second question is about Intel’s foundry competition. I think U.S. President seems to be very happy with Intel’s recent progress and even mentioned two of your key customers. Right. NVIDIA Apple may have some partnership with Intel Foundry. Should we be concerned about this so-called competition and what TSMC can really do to mitigate or avoid potential market share loss as those are key U.S. customers not limited to the two customers I just mentioned. Thank you.
Jeff Hsu, Director of Investor Relations, TSMC: Okay, so Charlie’s second question is on the Foundry competition and, you know, competition from a U.S. IDM. He knows the U.S. President is very happy with the progress. A couple two of our key customers he also was mentioned. So his question is fundamentally, is there a concern or risk going forward of market share loss for TSMC to our Foundry competition?
C.C. Wei, Chairman and CEO, TSMC: Kind of a simple question, I should say. No, let me explain a little bit because in these days, you know, it’s not money to help you to compete, right? I also like whoever you just mentioned to invest on Intel. I like them to invest on TSMC also. But the most fundamental thing is. Let me share with you. Today’s technology is so complicated. So once you want to design a.
Arthur Lai, Analyst, Macquarie: Very.
C.C. Wei, Chairman and CEO, TSMC: complete or advanced technology, it takes two to three years to fully utilize that technology. That’s the situation, and so up to two to three years of preparation you can design your product. Once you get your product being approved, it takes another one to two years to ramp it up, so we have a competitor, no doubt about it, that’s formidable competitor, but first it takes time. We don’t underestimate their progress, but are we afraid of it? For 30-some years we always in a competition with our competitor, so no we have a confidence to keep our business grow as we estimated.
Jeff Hsu, Director of Investor Relations, TSMC: Thank you, C.C. All right, let’s take the next two questions online in the interest of time. Operator, can we take the first call from the line, please?
Arthur Lai, Analyst, Macquarie: Hi, first, congratulations. Very strong performance. Thank you, C.C. Wei and Jeff Hsu, for taking my question. My first question is about the global capacity plan. Recently, Taiwan local news report that TSMC could exit the 8-inch business and mature node 12-inch to convert into the advanced packaging, and the investors keen to know if this is true, and the decision is based on what kinds of key factor that is C.C. just mentioned about the power density or if you know power. Thank you.
Jeff Hsu, Director of Investor Relations, TSMC: Okay, so Arthur Lai’s first question is about basically mature nodes, our strategy on mature nodes. He knows a lot of local news has been reporting that TSMC is exiting 8-inch and 12-inch basic businesses and converting the capacity to advanced packaging. So he wants to know if this is true and, if so, what are the reasons behind the power constraints, ROI, etc.
C.C. Wei, Chairman and CEO, TSMC: Good question indeed. We reduce our 8-inch wafers, the capacity and 6-inch but let me assure you that we support all our customers, we discuss with our customers and to do this kind of resources more flexible and more. What is the word we say? Optimize. Optimize the resources to support our customers. But let me assure you also to my customers that we continue to support them. We will not let them down if they have a good business. We continue to support that even in the 8-inch wafers of business.
Jeff Hsu, Director of Investor Relations, TSMC: Okay Arthur, do you have a second question?
Arthur Lai, Analyst, Macquarie: Yes, thank you. My second question is regarding the consumer and demand outlook. So C.C. also mentioned that the NAND price actually inflation and you also pushing up the cost of the consumer electronics. So investors actually are concerned about the further demand softness in this year and next year or particularly next year. So can management comment about what your client or your client’s client how to resolve this memory tightness or we call a memory urgency issue. Thank you.
Jeff Hsu, Director of Investor Relations, TSMC: Okay, so Arthur’s second question is on the impact from the memory price increase and the demand softness. I believe his question really, because CC already shared the impact this year. He wants to know what is the impact for 2027.
C.C. Wei, Chairman and CEO, TSMC: For TSMC? No impact. As I just mentioned, most of my customers now focus on high-end smartphone or PCs, so those kind of demand has less sensitive to the components of price, so they continue to give us a very healthy forecast this year and next year.
Jeff Hsu, Director of Investor Relations, TSMC: Okay, thank you, C.C. All right, operator, let’s move on to the next participant from the line, please.
Brett Simpson, Arete, go ahead please. Yeah, thanks very much. My question is really on AI. I mean TSMC has been supply constrained for your AI customers I think since 2024 and it sounds like 2026 is another year where we’re going to see challenges. Do you think the CapEx you’ve laid out for this year $52-$56 billion could that mean that we start to see supply and demand more in balance in 2027? Any thought there just in terms of how you’re thinking about that capacity plan and does it alleviate this supply bottlenecks that we see today? And as part of this from a supply perspective, we hear TSMC is finding it quite challenging to develop enough engineering talent quick enough both in the U.S. and in Taiwan.
Can you talk more about this trend and what’s the scale of the labor shortage of foundry engineers at the moment?
Arthur Lai, Analyst, Macquarie: Thank you.
Jeff Hsu, Director of Investor Relations, TSMC: Okay, so Brett’s first question is related around AI and our capacity. So he notes the supply looks to continue to be tight in 2026. But with these significant step up in our CapEx to support the customers $52-$56 billion, do we expect the supply demand or the gap so to speak to be more balanced in 2027? And then is engineering resources fab engineers a constraint or a bottleneck for us in making these expansions whether in Taiwan or the U.S.?
C.C. Wei, Chairman and CEO, TSMC: Okay, let me answer this question first. You know, if you build a new fab, it takes two and three years, two to three years to build a new fab. So even we start to spend $52-$56 billion. The contribution to this year almost none. And to 2027 a little bit. So we actually were looking for 2028, 2029 supply. And we hope it’s a time that the gap will be narrow. For 2026 and 2027 we are focused on the short term, more output. Actually our productivity continue to increase. Our people has an incentive because of one of the TSMC’s incentive is to satisfy customer. It’s not because of our financial result are good, but we want to let customer feel that TSMC is trusted. That whenever they have a good opportunity to grow, we will support it.
So, in 2026-2027, for the short term, we focus on the productivity improvement which we’ve done quite a good result because Wendell just mentioned that we can have a good financial result is because of that. But that’s not our incentive. That’s our incentive. But that’s not our purpose. Our purpose is to support our customer. So, 2026-2027, for the short term, we are looking to improve our productivity. 2028-2029, yes, we start to increase our CapEx significantly and we continue this wave of the AI demand megatrend as we expected.
Jeff Hsu, Director of Investor Relations, TSMC: Okay, Brett, thank you, C.C. Brett, do you have a second question?
Speaker 0: Yeah, I do, and thanks. That was very clear. I guess my second question is about pricing. If I look at 2025, this was the second consecutive year where TSMC’s wafer ASPs were up around 20%. As leading edge becomes a bigger portion of the mix and also you feed through price increases. When we factor in the ramp of more expensive overseas fabs, is 20% wafer ASP increases the new normal for TSMC. Typically you have an annual price negotiation about this time of the year. I’m trying to understand how you project ASPs in 26. Is your March quarter guidance factoring in price increases at leading edge. Thank you.
Jeff Hsu, Director of Investor Relations, TSMC: Okay, so Brad’s question is on pricing. He notes that you know which he’s looking at. The blended wafer price is increasing close to 20% according to his estimates. Of course that’s blended both on price and mix but you know, it’s a leading edge. And also we have mentioned earning our value. So he wants to know is this the new normal going forward?
C.C. Wei, Chairman and CEO, TSMC: This is a tough question. I need the CFO to answer.
Wendell Huang, CFO, TSMC: Okay, every new node we have a price, the price will increase, the blended ASP will increase. I think they continue this way in the past and will continue the way in going forward but Brett, I think you’re asking about the contribution from pricing to the profitability. Now as we mentioned before, the profitability. There are six factors affecting the profitability and price is just one of them and of course we continue trying to earn our value but in fact in the last few years the pricing benefits to the profitability was just enough to cover the inflation cost from tools, equipment, materials, labor, etc. There are other factors contributing to the higher profitability. The first one will be a high utilization rate as the demand is so high and as our disciplined approach to capacity planning. The utilization rate supports our high profitability.
The other one will be our manufacturing excellence. As C.C. Wei said, we continue to drive increasing productivity to generate more wafer output. Also, we continue to drive optimization capacity among nodes, which includes converting part of the N5 to N3. It also involves cross supports from different nodes from the mature nodes to the more advanced nodes. That is a very important advantage of TSMC, so with all these efforts we’re able to maintain a good healthy sustainable return profitability so that we can continue to invest to support our customers’ growth.
Jeff Hsu, Director of Investor Relations, TSMC: Okay, thank you Wendell. In the interest of time, we’ll take two more questions from the floor and one more from the line. So we’ll go here. Sunny Lin, UBS and then.
Sunny Lin, Analyst, UBS: Thank you. Good afternoon. Very strong results. Congratulations. So number one, if we look at the company very different versus in the past from many angles. But if we look at the ramp from N3 now, you can generate actually higher revenue from N3 in year four, even year five of mass production versus in the past, you know, like peak revenue in the second or even third year of mass production. And so could you help us understand with this new trend, what’s the financial implications? And then what does that imply for you to operate or even compete differently versus in the past?
Jeff Hsu, Director of Investor Relations, TSMC: So Sunny’s first question I think maybe is related well to our technology differentiation. But she knows that when we ramp a new, you know, in the past, when we have a new node after a few years, sort of, you know, the revenue or you know, comes down a bit. But she notes that nowadays we can still enjoy very high revenue from a node even after, in its fourth or fifth year. So her question is, what are the financial implications from this? And also from a, I believe, competitive dynamics.
C.C. Wei, Chairman and CEO, TSMC: If I can answer, say we are lucky. Actually if you look at the semiconductors product right now, the trend is you need to have a lower power consumption always and then high speed performance. And for TSMC our technology differentiation become more and more clear. We have both benefit. We have a high speed and we have a low power consumption. And so our leading edge customer, the first wave, the second wave, the third wave continue to come. And so that sustain the demand for a long, long time. That’s a difference. Of course this one you need to have technology leadership and which the technology leadership much easier to say. But every year you have to improve. As we said, we have N2 N2P and then you won’t be surprised. And the third one will be N2 something and continuously.
And so that one give us the benefit and to support our customers’ continuous innovation. And so they continue to stay with TSMC and so their product can be very competitive in the market. So that answer the question, say that you know, once we got the peak revenue and did not decrease, it continues because second wave, third wave customer continue to join.
Sunny Lin, Analyst, UBS: Thank you very much, CC. And then maybe a question on 2-nanometer, which is, CC, a meaningful revenue coming through in 2026. And so in the past you guide like how much a new node will contribute to sales for the year. And so any expectations on the revenue contribution from 2-nanometer in 2026. And then I recall in terms of process migration, few years ago there were lots of concerns on increasing cost per transistor. And that obviously is not declining from 5-nanometer but then now looking at 2-nanometer I think process migration seems to be re-accelerating even for smartphone and PC and then with larger demand coming from high-performance computing. And so maybe based on your feedback from clients, maybe for smartphone and PC clients, why are they re-accelerating process migration into 2-nanometer?
Jeff Hsu, Director of Investor Relations, TSMC: Okay, so Sunny’s second question very quickly in two parts, 2 nanometer as we said is a fast ramp in 2020, very strong customer interest and demand, so what do we have any revenue percentage to guide for in 2026?
Wendell Huang, CFO, TSMC: Yeah, Sunny, the 2-nanometer will be a bigger node than 3-nanometer from the start. Okay. But it’s less meaningful nowadays to talk about the percentage of revenue contribution when the new node starts because the company as a whole the revenue has become much bigger than before. So yeah, revenue dollar it’s a bigger node but percentage wise less meaningful.
Jeff Hsu, Director of Investor Relations, TSMC: And then the second part of Sunny’s question from a technology perspective, as you know she noted increasing cost per transistor as we said CapEx per K going higher. So her question very simply, what’s the value? What’s driving smartphone HPC customers actually to see we’re seeing a widening out of the adoption of N2. So what is the value that it’s providing that the customers are willing to adopt N2?
C.C. Wei, Chairman and CEO, TSMC: I already answered the question right because now the whole product is looking for low power consumption and high speed performance and our technology can provide that value. I also say that every year we improve. So every year they adopt the same, even the same name of the same node their product continue to improve. So that provides a value. If you say that the cost per transistor is increased, I saw the cost per transistor, the performance compared that called the CP value is increased, is much better. So that customer stick with the TSMC. Our headache right now, if I can call it headache is a demand and supply gap. We need to work hard to narrow the gap.
Sunny Lin, Analyst, UBS: Very clear, thank you.
Jeff Hsu, Director of Investor Relations, TSMC: Thank you. Operator, can we take the last call from the line and we’ll take one last one from the floor?
Arthur Lai, Analyst, Macquarie: Chris Sankar, TD Cowen. Go ahead, please.
Jeff Hsu, Director of Investor Relations, TSMC: Hello? Okay Chris, are you there? I guess not. Then let’s just take the last call. Sorry, the last question from Bruce Lu from Goldman Sachs. Thank you, thank you for joining.
Bruce Lu, Analyst, Goldman Sachs: Thank you for letting me ask the last question. Hopefully it’s not that difficult. So I think one of the key. I understand that TSM is trying very hard to increase the capacity, you know. AI wafer fab is growing like 15% a year. 15% plus a year. But token consumption for last few quarters is 15x a quarter. So the gap is still there, right? That’s why Elon Musk was talking about the chip shortage. So, C.C., can you share with us that in your assumption when you provide 50% plus AI revenue growth, what kind of token consumption you can support and how many gigawatts power in terms of the chips you can support in your assumption when you provide this kind of five-year revenue guidance for AI.
Jeff Hsu, Director of Investor Relations, TSMC: Okay, so Bruce’s first question is on our AI CAGR. Actually to be correct we have guided for the AI CAGR to grow mid- to high 50s CAGR in the five-year period from 2024 to 2029. So that is the official guidance we have provided just today. Bruce’s question is in this guidance what is our assumption basically assuming about the token growth behind this type of CAGR, what is our assumption in terms of translating to how much gigawatts of data center can we support? And other specific assumptions behind our guidance?
C.C. Wei, Chairman and CEO, TSMC: Bruce, you got me. I mean that’s, I, I also try to understand what is the tokens growth but my customers their product improvement continue to increase. So from, it’s a well known from Hopper to Blackwell to Rubin that almost double triple their performance. So the one they can support the tokens growth or the one they can continue to support the compute power is enormous and so I lost track to be frank with you. For gigawatt I want to see that how much of TSMC can make the money from the gigawatt rather than say that you know how much we can support today. From my point of view still the bottleneck is TSMC’s wafer supply, not power consumption. Not yet.
We also look at carefully to answer your question, say that TSMC’s wafer can support how much of the gigawatt. Still not enough. They still have an abundant power supply in the U.S.
Bruce Lu, Analyst, Goldman Sachs: Okay, my next question is for the CapEx, right? I want to double-check with what I just heard that CC was talking about like 2027. The CapEx will be more for the productivity improvement when 2028-29 may be meaningfully higher. So I do recall that in 2021 TSMC provided three years for $100 billion CapEx to support our structural growth. Now the demand is even stronger. Based on that, can we do three years? $200 billion for CapEx for next three years. You know the math sounds doable.
Jeff Hsu, Director of Investor Relations, TSMC: First, a slight clarification because CC was talking about this year we have substantially, you know, stepping up our CapEx investment. But CC also mentioned it takes two to three years to build capacity. In terms of Bruce’s question, is do we say 2027 significant step up in CapEx? I think we’re saying it takes time for that capacity to come out. That is the first part.
Wendell Huang, CFO, TSMC: Yeah, I think Bruce, what CC said was the productivity was our main focus in 2026 and 2027 because when we start to invest the fab, the volume production will not come out until 2028 and 2029. So the dollar amount invested today is for 2 years or even in the future. And CapEx dollar amount, as I said in the last 3 years, $101 billion in the next 3 years, significantly higher. I’m not going to share with you the number, but significantly higher.
Jeff Hsu, Director of Investor Relations, TSMC: Yeah, so I think Wendell has addressed at least both parts of Bruce’s question. Okay, so again, thank you. So again, thank you everyone. This does conclude our Q and A session. Before we conclude today’s conference, please be advised that the replay of the conference will be accessible within 30 minutes from now. The transcript will become available 24 hours from now and both are available or will be available throughout TSMC’s website at
www.tsmc.com. So again, thank you everyone for taking the time to join us today. We certainly would like to wish everyone a happy New Year. We hope everyone continues to stay well and you will join us again next quarter. Thank you. Goodbye and have a good day.
