Taiwan Integrated Circuit Manufacturing Company (hereinafter referred to as TSIMC ) recently held a third quarter legal meeting and announced its third quarter financial report for 2021, with consolidated revenue of approximately RMB 414.67 billion (NT$ ), a net profit after tax of approximately RMB 156.26 billion (NT$) and an earnings per share of RMB 6.03 (NT$).
revenue grew by 16.3% compared with the same period in 2020, and both after-tax net profit and earnings per share increased by 13.8%; compared with the previous quarter, revenue increased by 11.4% in the third quarter, and after-tax net profit increased by 16.3%.
In terms of process, TSMC's current advanced process accounts for 52% of the total revenue of the third quarter, namely about 18% of 5 nanometers and about 34% of 7 nanometers; others include 16 nanometers and 13% of 28 nanometers.
screenshot from TSMC's third quarter Fashuo briefing
In terms of technology applications, smartphones account for 44%, high-efficiency computing accounts for 37%, Internet of Things accounts for 9%, automotive electronics accounts for 4%, and consumer electronics accounts for 3%. The first four technologies have all grown compared with the previous quarter. TSMC's financial director Huang Zhaoren said that TSMC's market-leading 5nm process will become the growth momentum for the fourth quarter.
screenshot from TSMC's third quarter legal briefing
screenshot from TSMC's third quarter legal briefing
TSMC's third quarter legal briefing
in the third quarter legal briefing
first: Q3 Gross profit breaks through 50% Q4 It is expected to maintain growth momentum
TSMC's gross profit margin fell to 50%, lower than market expectations; the gross profit margin in the third quarter exceeded 50%, reaching 51.3%, in line with the third quarter's performance outlook estimate between 49.5% and 51.5%, and maintain the 50% level.
Looking forward to the fourth quarter, Huang Zhaoren pointed out that the funds donated vaccines were recognized in the fourth quarter, which affected the single-quarter operating rate of profit by about 1 percentage point. The consolidated revenue is expected to be between US$15.4 billion and US$15.7 billion; the operating rate of profit is expected to be between 39% and 41%; the gross profit rate is expected to be between 51% and 53%. Assume that TSMC's annual revenue will hit a new high as expected.
Second: Confirm the rumors of setting up a factory in Japan! It is expected that construction will start in 2022 by
. Regarding the rumors that TSMC will set up a factory in Japan, TSMC President Wei Zhejia also confirmed that after Nanjing and Arizona, the United States, TSMC officially announced its plan to build a factory in Japan. It is expected that construction will start in 2022, with a 22- and 28-nanometer processes as the main one, and aims to mass production in 2024.
Wei Zhejia further explained that TSMC's global factory construction plan takes into account customer needs, market opportunities, operating efficiency, and cost assessments, and there will be no plans for European factory expansion in the short term.
Third: mass production of 3nm processes in the second half of 2022, without fear of Samsung overtakes 2nm
Two weeks before TSMC held a legal meeting, Samsung Electronics took the lead in announcing that it is expected to mass produce 3nm processes in the first half of 2022, becoming the world's first manufacturer to produce 3nm processes. At the same time, it is moving towards 2nm processes. It is not difficult to see the meaning of competing with TSMC in 2025.
In the face of Samsung's open words, Wei Zhejia responded confidently that TSMC's 3-nanometer process is expected to be mass-produced in the second half of 2022. At this stage, TSMC has developed complete smart phones and high-performance computing related applications, and has discussed more new product design decisions with customers.
Wei Zhejia also admitted that the 3-nanometer process is complicated and new equipment must be purchased to deal with it. The cost will definitely be higher than the 5-nanometer process, which will contribute to the revenue in the first quarter of 2023.
As for the 2nm process, Wei Zhejia did not respond positively, saying that TSMC's advanced technology and customer relationships are strong, and its leadership position will not be easily shaken, and it has deep industrial competitiveness.
Fourth: wafer price increases by 5~20%, which is conducive to Q4 gross profit growth?
Although the third quarter of 2020 French lecture, Wei Zhejia promised that in the face of supply chain shortages, TSMC will not take advantage of the situation to adjust wafer prices. However, TSMC also announced a comprehensive price increase in August this year, with the increase in ranging from ranging from 5 to 20%, which is the first price increase in 20 years.
Looking at the peers, there are actually many precedents that benefit from price increases. Excerpted from the second brother United ’s financial report, the gross profit margin increased from less than 20% at the beginning of 2020 to the second quarter of this year, with gross profit margin exceeding 30%; the gross profit margin of the world’s advanced and Liji Electric has also increased to nearly 40% due to price increases. In contrast, the big brother TSMC has a gross profit margin from 54% in the fourth quarter of 2020 to 52.4% in the first quarter of 2021 and 50% in the second quarter.
Regarding the details of price increase, such as which customers are affected, how much increase in different processes, how much gross profit will be poured in the fourth quarter, Wei Zhejia did not disclose too much, but only said, "Gross profit will definitely be higher than 50%."
