Author ｜ Lian Yuhui
TSMC's investor meeting on the 14th told us one thing: this world has not collapsed, it is still operating normally.
The short side is looking forward to today's investors' meeting, TSMC will deliver a second-quarter financial report that is lower than market expectations and a disappointing third-quarter financial outlook. Sorry, TSMC completely disappointed the bears.
Quickly summarize the highlights in today's investors' meeting:
- 022 Gross profit margin is as high as the second quarter of 2022 59.1%, net profit after tax of US$7.9 billion;
- did not have a peak season in the third quarter, and revenue outlook still grew by 11%;
- TSMC's production capacity continued to be tight in the whole year of 2022;
- demand for smartphones, PCs and consumer products weakened, but there are still several applications that performed very well: The silicon content of CPUs, GPUs, AI accelerators, automotive semiconductors, and 5G smartphones has increased significantly compared with 4G smartphones;
- semiconductor silicon content will still have a growth rate of 16 to 19% in the next few years, supporting the industry's long-term structural demand and the continued growth of wafer demand.
If you want to give TSMC a score today's investor meeting, you should be able to give 99 points , with a score of 100 points. The missing 1 point should be attributed to the inability of machine equipment manufacturers to deliver some machines during the epidemic (mainly in mature processes), which makes TSMC have to move some capital expenditure this year to 2023. Originally, capital expenditure this year was US$40 billion to US$44 billion, which is estimated to be close to the low standard.
The industry jokingly says that everyone wants to hear bad news from TSMC. The company can't squeeze out any bad news to share, so it simply "let the virtuous" deduct a point, announces a little reduction in capital expenditure, and try to give everyone enough face. However, it is still emphasized that the reduction in capital expenditure this year is not slowing down due to the economic reversal, but mainly because the schedule of equipment manufacturers is too tight, and some machines are delayed until 203.
At the same time, TSMC also stated that the capacity plan for 2022 will not be affected in any way, and will strive to advance the delivery schedule of specific machines for some planned 2023 production capacity.
inventory adjustment force, and whether the peak season of the third season is not prosperous? It should be the most concerned issue for all walks of life.
TSMC President Wei Zhejia pointed out that due to the weakening demand for smartphones, PCs and consumer electronic products, the entire supply chain has taken action to adjust inventory. It is expected that the inventory water level will decline in the second half of 2022 and may adjust all the way to the first half of 2023. The current semiconductor cycle is close to "typical cycle".
He also emphasized that after two years of home demand, such inventory adjustments are very reasonable. The company expects that the phenomenon of excessive semiconductor supply chain inventory will take several quarters to rebalance and gradually return to a healthy level, and is expected to adjust to the first half of 2023.
The above mentioned demand for smartphones, PCs and consumer electronic products is indeed obviously weak, but also has still strong terminal products, including data centers, automotive electronics, etc., still very stable demand, TSMC will support these needs by redistributing production capacity.
In the long-term trend, TSMC is optimistic about the continued increase in silicon content in the following application fields: CPU, GPU, AI accelerator, automotive semiconductors, 5G smartphones, etc. Therefore, even if the unit number growth of many electronic products will be flat or low single digits, the semiconductor silicon content will still grow by 16 to 19% in the next few years, and the long-term structural demand for semiconductors is very optimistic.
Wei Zhejia once again emphasized that the current demand of customers still exceeds TSMC's capacity supply, and it is expected that capacity will remain tight throughout 2022.
Expand special process
TSMC plans to significantly expand its special processes, and it is expected to increase the production capacity of mature and special nodes by 50% within three years , which is a major change for TSMC. In the past, TSMC's strategy has always been to charge advanced processes. Now it is optimistic that the demand for edge computing has exploded and customers have strong demand for production capacity, so they decided to significantly expand the production capacity of special processes.
In the investor meeting, analysts questioned how confident TSMC has to master the demand for special processes (How confident?), Wei Zhejia answered without hesitation: Very confident
Trademark also stated at the technology forum that in order to meet customers' demand for special processes, the capital expenditure of special process production capacity in 2022 will be 3.5 times the average value of the past three years. The proportion of the entire characteristic process production capacity accounts for about 45% of the overall mature process production capacity in 2018 and will reach 63% in 2022.
nm process will be unveiled soon
TSMC will mass-produce N3 (3nm process) technology in the second half of this year, and will start to contribute significantly to revenue in the first half of 2023. N3E is an extension of TSMC's 3nm process family, with better performance, power consumption and yield, and will provide a complete support platform for smartphones and HPC-related applications. The mass production time of N3E is planned to be about one year after N3 mass production. The company is very confident that the 3nm family will become another large-scale and long-term process technology for TSMC.
In terms of N2 (2nm process) technology, the current R&D progress is carried out in accordance with the expected plan and will be trial production in 2024 and mass production in 2025. TSMC's N2 technology will adopt a nanosheet transistor architecture, which can provide the best performance, the best cost, and the technological maturity. N2 can increase the speed by 10% to 15% at the same power consumption; or at the same speed, the power consumption by 25% to 30%; the logic density increases by 20% compared with N3E.
Overall, after more than two years of epidemic, everyone has gradually ended their home "going out" and started various travel and business trips. The semiconductor industry, which has been popular for more than two years, will naturally enter the inventory adjustment of the "post-epidemic era".
TSMC is confident that capacity utilization will remain at a healthy level in 2023, because of three secrets: 1. Technology leadership and differentiation; 2. A strong product portfolio of high-performance computing; 3. Strategic partnership with customers. And the upcoming N3 technology can expand customer product portfolio and potential markets, and although overall economic uncertainty still shrouds in 2023, TSMC's technological leadership can continue and support operational growth.
Expand special process
TSMC plans to significantly expand its special processes, and it is expected to increase the production capacity of mature and special nodes by 50% within three years , which is a major change for TSMC. In the past, TSMC's strategy has always been to charge advanced processes. Now it is optimistic that the demand for edge computing has exploded and customers have strong demand for production capacity, so they decided to significantly expand the production capacity of special processes.
In the investor meeting, analysts questioned how confident TSMC has to master the demand for special processes (How confident?), Wei Zhejia answered without hesitation: Very confident
Trademark also stated at the technology forum that in order to meet customers' demand for special processes, the capital expenditure of special process production capacity in 2022 will be 3.5 times the average value of the past three years. The proportion of the entire characteristic process production capacity accounts for about 45% of the overall mature process production capacity in 2018 and will reach 63% in 2022.
nm process will be unveiled soon
TSMC will mass-produce N3 (3nm process) technology in the second half of this year, and will start to contribute significantly to revenue in the first half of 2023. N3E is an extension of TSMC's 3nm process family, with better performance, power consumption and yield, and will provide a complete support platform for smartphones and HPC-related applications. The mass production time of N3E is planned to be about one year after N3 mass production. The company is very confident that the 3nm family will become another large-scale and long-term process technology for TSMC.
In terms of N2 (2nm process) technology, the current R&D progress is carried out in accordance with the expected plan and will be trial production in 2024 and mass production in 2025. TSMC's N2 technology will adopt a nanosheet transistor architecture, which can provide the best performance, the best cost, and the technological maturity. N2 can increase the speed by 10% to 15% at the same power consumption; or at the same speed, the power consumption by 25% to 30%; the logic density increases by 20% compared with N3E.
Overall, after more than two years of epidemic, everyone has gradually ended their home "going out" and started various travel and business trips. The semiconductor industry, which has been popular for more than two years, will naturally enter the inventory adjustment of the "post-epidemic era".
TSMC is confident that capacity utilization will remain at a healthy level in 2023, because of three secrets: 1. Technology leadership and differentiation; 2. A strong product portfolio of high-performance computing; 3. Strategic partnership with customers. And the upcoming N3 technology can expand customer product portfolio and potential markets, and although overall economic uncertainty still shrouds in 2023, TSMC's technological leadership can continue and support operational growth.
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