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TSM Taiwan Semiconductor Manufacturing

Participants
Jeff Su IR
Wendell Huang CFO
C.C. Wei CEO
Randy Abrams Crédit Suisse
Gokul Hariharan JPMorgan
Sebastian Hou CLSA
Charlie Chan Morgan Stanley
Bruce Lu Goldman Sachs
Robert Sanders Deutsche Bank
Brett Simpson Arete Research
Roland Shu Citigroup
Andrew Lu Sinolink Securities
Sunny Lin UBS
Laura Chen KGI
Rick Hsu Daiwa Securities
Aaron Jeng Nomura Securities
Mehdi Hosseini SIG
Call transcript
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Jeff Su

Good afternoon, everyone, and welcome to TSMC's First Quarter 2021 Earnings Conference Call. This is Jeff Su, TSMC's Director of Investor Relations and your host for today. To prevent the spread of COVID-19, TSMC is hosting our earnings conference call live via live audio webcast through the company's website at www.tsmc.com, where you can also download the earnings release materials.

If you are joining us through the conference call, your dial-in lines are in listen-only mode. The format for today's event will be as follows.

and President Vice TSMC's CFO, Mr. First, will XXXX followed Huang, XXXX. summarize the our quarter first the in by quarter operations second Wendell our for guidance Mr. Afterwards, Huang and Dr. TSMC's CEO, C.C. company's Wei, provide key messages. will the jointly line Then we Q&A. for will the open

As risks discussions our that safe contain over quarter harbor today's everybody summary And notice contained Mr. may Please press refer materially which on to uncertainties, the would could call usual, release. statements. to results and guidance. forward-looking in significant from to like differ I I subject appears remind that the Wendell to to like would current to the of are and operations the now statements cause that forward-looking CFO, Huang, actual those turn for TSMC's

Wendell Huang

joining provide Good quarter everyone. the guidance My highlights you, today. you with will for first second for XXXX. will the Thank I the Thank presentation that, us start financial for quarter After afternoon, XXXX. Jeff.

sequentially or First increased NT X.X% dollars. quarter X.X% in U.S. revenue in dollars

by operating was decreased XX.X%. EPS R&D X to TWD and quarter percentage activities XX.X%. first by unfavorable of Total smartphone was expenses slightly relatively X.X mainly sequentially level our Therefore, X.X X.XX, balanced to points of years. first and margin recent utilization sequentially demand, supported increased rate. margin points due higher ROE percentage Gross due for HPC-related family. business than in level milder to by seasonality lower a foreign XX.X%, billion, by mainly exchange operating capacity the Overall, TWD an NX was Our to quarter decreased

revenue. first Advanced while wafer X-nanometer we and process define technologies, revenue as accounted of X-nanometer by accounted move let's in contributed technology technology. wafer XX%. XX% Now XX% for to which below, X-nanometer now for revenue of quarter, the on

for for revenue increased our to X%. XX% platform. account HPC Smartphone XX%. XX% Now account for IoT account quarter DCE to moving first for increased to XX% XX% X%. XX% quarter-over-quarter account of to to to on X%. decreased account Automotive revenue. increased by for increased XX%

balance the XXX quarter to and first on We TWD of marketable sheet. the billion. ended cash Moving with securities

XX current increased mainly due increase billion TWD inventory payable. by and billion receivable ratios, during loans, TWD bonds increased financial billion, days, we liability increased in TWD an to in by billion, by liabilities TWD of On the increased billion to increase debt XX others, turnover short-term days as the of XX accounts accounts TWD accrued mainly XX to the due of raised days. interest-bearing XX quarter. billion On XX Days wafer side, offset of partially day to in XX days of decrease XX.X X liabilities corporate Long-term prebuild. the TWD NX XX primarily

Now and let few flow a CapEx. cash on make comments me

cash TWD we quarter, TWD XX operations, for XXX generated first by increased XXXX spent billion by XXX billion, payable the increased second During distributed TWD TWD in billion TWD in from to cash billion our billion. to have issuance. dollar of TWD finished I U.S. financial quarter. billion the the balance first In the billion our due Overall, my capital billion XXX increased XX.X X.X bond $X.X TWD Short-term about bonds loans CapEx dividend. totaled quarter at summary. while XX quarter expenditures cash and end terms,

at is that billion which billion, revenue TWD business revenue occurred XX includes yesterday increase USD USD minor quarter our the Based we at contribution, the exchange utilization XX.X outlook, the presentation. of mainly decline XX.X, very of the the to to assumption operating continue from and margin high the higher XX.X%. power midpoint. slower positive sequential gross at and Now current XX.X the absence XX.X% dilution between USD a to represents to The of fabs let's rate This on in XX.X%, improvement in level XX.X% outage financial Tainan. guidance between our due and Fab rate concludes impact margin and be my margin is a gross X run margin X-nanometer sequential X% Based the between second our turn to be second expected from as inventory to our quarter cost of on revaluation. quarter expect This guidance. second

will XX.X was with The key than turn slight line Now let near-term sequential years. revenue to with in billion first our driven quarter was recent in milder concluded HPC-related of a by me USD and demand, demand balanced our TWD seasonality our smartphone our by billion, I messages. which start We inventory. XXX.X guidance. increase mainly with or

smartphone Moving revenue our into as continue flattish grow, be demand second quarter seasonality. to by offset expect to XXXX, HPC-related will we

compared On front, exiting customers seasonal quarter to overall supply inventory prepare chain year fabless macro uncertainties, the of our the as fourth to was Amidst level. XXXX. the historical inventory inventory of expect customers' and levels throughout supply gradually the our lingering and healthy the higher we

for a of given industry's continued supply to persist to this period expect We time need security. ensure the

remain our capacity to special year the advanced ahead tight expect industry-leading year, the of Looking supported and second technology. by the to throughout strong we half our demand for

year growth about memory, For the market, now semiconductor XXXX, of forecast forecast foundry full excluding to be is grow overall XX% industry about we while XX%. the to

XXXX revenue confident XX% in growth can in and dollar outperform are foundry we terms. TSMC, grow For by U.S. around we the

growth our is capital me follow in CapEx let years. in budget the of about future spent for talk this year. Every that our will anticipation Next, year,

packaging is XX% CapEx spent advanced capture and for process specialty be underpinned technologies decided to X-nanometer, capital raise specialty enter and be opportunities. the have XXXX advanced in the In to our megatrends About growth full demand increasing the years, growth necessary for XX% we order level capital budget by making, period for and we technologies. and several advanced believe USD HPC future structural including mask next X-nanometer. About higher XG-related As about be meet the multi-year of for of will XX around and of XXXX the year of we our allocated to will technologies, X-nanometer be applications, XX% billion. spent will to higher a investment a

to turn C.C. Now me over the let microphone

C.C. Wei

you, Thank and safe everybody time. during healthy hope Wendell. this is staying We

talk shortage First, about let the capacity outlook. and me demand

are long-term from increase Our challenges both a as capacity structural well as chain. the demand in by which currently imbalance semiconductor the driven industry-wide facing shortage, is customers supply short-term in

multi-year fuel pervasive semiconductors We and the COVID-XX technologies increase accelerate a several are to has advanced in essential a demand structural next as applications our fundamentally in people's semiconductor are witnessing underlying in demand years. more transformation, and expected of for HPC-related making also XG strong digital the life. megatrend

to short-term chain, supply creating supply driven COVID-XX about imbalance in due ensure and to tensions. In brought chain addition, geopolitical security is the the by by need disruption supply uncertainties

TSMC's In for mission support to Now customers' TSMC's provider let growth, technology to order be several capacity for plan our help our TSMC and address investment talk years customers. action and trusted me global logical the is to to for is taking capacity come. disciplines. the IC shortage about industry the

hard profile, investing with productivity, We near our to term. to more help demand. support increase demand are increase working drive our the the are support to output, customers long-term To customers closely structural in we our and working to address their for the

equipment and land have construction new We started and of facilities. acquired the

support expect chains next semiconductors. customers X and at capacity, our certainty employees supply Increased the and on through about to thousand to expanding leading-edge TSMC expected help strengthen are capacity hiring years specialty that increase global R&D of for sites. multiple manufacturing to rely confidence the of capacity is improve invest to our USD We and supply technologies. billion and XXX in

value. the based are decision Therefore, to new increasing investment in and same mature to earning technology and flexible on material retaining time, capital sell will Our manufacturing, and the leading investment leadership, nodes X process at rising manufacturing we challenges return. face proper customers with At responsive work customers' continue closely complexity cost to costs. we trust disciplines: node, due our

value value and includes our technology, service the support capacity our value Our the of our value to of customers. the of

will our level. up reasonable We to to look a wafer pricing firm

taking a to that continue to our proper improvement. suppliers manufacturing actions, We We our be dollar support our growth XX% to mission fulfill us we return and diligently our on believe as XXXX enable from to with customers' customer in megatrend. will to favorable reiterate to cost well deliver can growth With work earn to our continue we XXXX By invest XX% such CAGR to U.S. are technology terms. industry excellence capture and the leadership, revenue the partners. long-term positioned to we trust, foundry trusted from

in recovery since Next, the automotive affected fourth XXXX. talk me XXXX. Entering automotive has update. only the automotive third year, quarter market. the further see continued to chain demand We was to of soft The reduce of been XXXX. COVID-XX automotive customers began XXXX, our their and throughout impact The let the sudden supply market throughout quarter supply about the

its long From months to at production own TSMC and However, management least top inventory takes of chain part capacity supply address supply have it the of with that our this dynamically tiers reallocate then, support its worldwide automotive announced car industry. year, is with chip is practices. capacity the to worked between. for In challenges automotive suppliers several in chip TSMC customer doing is production, complex support Since customers X other for customers. to priority. our January with automotive wafer our we our to

from improvement, in However, and to in snowstorm disruption manufacturing quarter. next the the our unexpected component with shortage greatly the further we Texas TSMC's semiconductor for to the reduced be customer productivity due automotive deteriorated expect fab shortage the Together Japan. by

in about talk past the The lack tight supply due in Taiwan of supply will Taiwan update. rainfall water water the to currently year. I Now is

requirement long-established We supply water-conservation cover have to impact has our well. reduction system operations. on a the current in risk usage the as from this. for government we management existing which our Through are manage able water been no enterprise risk measures, prepared TSMC with place, water

procedure stages. also detailed We shortage response water at to handle have different

not our operations. We enterprise water government effort the our new system, management material do continue sources. and any risk see sector private collaborative and water impact the With conservation with expect will to to we comprehensive our on

further about another further XXXX. with to we extend around NX production XX% of of family most XXXX. NX NX with our rules Thus, already second for year than the NX year continue be design in grow volume node our we the be HPC demand and foundry for products. original volume FinFET density our full will by will from and robust and with in NX to our is this second the performance Finally, NX X-nanometer industry's its foundation to and the to and contribute migration PPA. best is the our for best continue applications. NX production risk plan. yield providing next strong several solution to production status. half while compatible and NX performance, TSMC's structure HPC the revenue applications, wafer NX use of X-nanometer NX is a our driven leverage customers. of will maturity, better family. the cost years, to for NX transistor in NX I straightforward deliver driven will demand strong, demand talk enhancement expect advanced smartphone in and stride next wave and is from expect the power smartphone technology NX for targeted by NX

progress. track Our good with NX technology development is on

We Risk The half continue higher similar in XXXX. production both at of and with in targeted XXXX. NX stage. a as for level HPC of to see NX production at scheduled and smartphone second customer much NX compared is is applications volume engagement a

and is is PPA I'm long-lasting attention. for that Thus, are be technology both will X-nanometer it will you the concluding introduced, confident -- message. for advanced which key Thank your is both technology, This Our foundry nodes TSMC. be X-nanometer X-nanometer and sorry. transistor in introduced we our and our most one large technology

Jeff Su

your C.C. in English you, statements. wish management Instructions] your caller our Now Q&A Thank our Chinese, concludes proceed question. Operator, on session. I Instructions] translate This the can begin raise before it the let's you please answers Should [Operator question with line? you will first [Operator prepared to to the

Operator

Abrams, The Crédit Suisse. to first Randy ask one question,

Randy Abrams

sector question are get I and Intel. also, goals manufacturing back plans reengage to And making just leadership. I They in did think the the announce their clear, first wanted foundry it to to to Yes. Okay. ask about their

in So on pull could potential now of business how getting viewing you're improve managing you're back them plans? the a manufacturing you the customer if you're sustainability they and as risk discuss some the and how and outsourcing also assurances

Jeff Su

foundry position. your first leadership announcement me to a question first reengage and Intel let on their summarize Randy, back relates question. to recent Okay. get Randy's to and manufacturing

of And the kind sustainability how Randy's TSMC we any assurances do we customer? as business? is So how question manage potential view does Intel a getting of What the business of on risks? are the

C.C. Wei

Randy, to let an to will me work compete and And customer, is and foundry their fairly. areas our collaborate in customer other our necessary in start area. the and customer with important develop TSMC and support some we all is always products. Intel everyone's with support we technology openly

comment me bit on the let little Now a competition.

pure-play leading TSMC foundry, history, in to yet has competition never XX-plus-year compete. a our we been As short know on how

are to have important The on and last We is leadership, focus that because we -- we products internal customers' will excellence do trust, earning trust. with customer. our our fairly technology delivering continue not point, customers' compete manufacturing

So short-term technology we long-term if them how can the you And not customer. and comment, be other as our we to an for and the industry And Intel, important capacity support for also. megatrend for the demand. we we trusted provider capacity It's ask come. years support plan

Jeff Su

Does your first Okay. answer Randy? question, that

Randy Abrams

the on first that's good Yes. question. No,

you question bit and pressure more aggressive remarks domestic there They being but is the prepared in U.S. about China. I second mentioned all discuss, with geopolitical are to also your Europe and about The a wanted -- particularly topic capacity.

expand consider an with plans If U.S. I starting where shifts mega foundry think margin a current high could consideration. in Taiwan. from eventually if at to for shifts land, big fab? scale any the on curious the XX,XXX. an location the customers if on -- accelerate potential with at to do you're your any, give positioning update there's if you're could level, more seeing you've won And, just customer in If updated where traditionally to you to the you plans strategy, Nanjing, are geographic give from at I'm the view the

Jeff Su

let your me Okay. Randy, second try question. to summarize

I few think there's parts. quite a

think looking and countries. of I fabs is first, Randy's geopolitical talk the sort this landscape of in at at question looking on different

areas; do correct, to U.S is expansion; countries. then how Randy? would feel how to first, thirdly, that So I customers we and or need manufacturing; our the what see Nanjing secondly, like different think an and in particularly the about know lastly, progress other Randy, on manufacture he wants in do Is update

Randy Abrams

Yes. Yes. That's correct.

C.C. Wei

Randy, that's a lot questions. of

Randy Abrams

Sorry.

You only us two. gave

C.C. Wei

try me answer. Let to

one, first say to like a TSMC actually, global The I been have would company.

of let first. China, me lot U.S. U.S., But Taiwan, on a outside manufacturing have Mainland Singapore. comment sites We the

plan. back continued U.S. today. are are for manufacturing chips an we We the with for XX-inch Arizona manufacture We that our long we XXXX have an U.S. advanced operate increasing progress fab fab and are in the is we effort up X-inch set in though. in now the U.S. upstate joined WaferTech, the the been semiconductor presence semiconductor to and in has And got executing to the a time, in to Washington support customers And of happy located our in our

our in about you status asked Nanjing. also -- Did You that asked?

Randy Abrams

Yes. Yes.

C.C. Wei

demand we it's Depend depends And economics, and we also, progressing a first well. capacity the completed the while. we. The have customers' a fab we in is for XX,XXX-wafers expand to We the the other Nanjing a in capacity question And and why phase installation, Taiwan, actually, already of okay? plan. have plan on are production in also -- on

Jeff Su

two with is Also, Randy One, other others. also. asking regions

C.C. Wei

with any But out out rule we announced no in did expansion today, Europe. we never other currently region. already areas fab possibility plan. possibility. rule such not We have But as We any plan further other

for be to want to I will emphasize, main continue focus the TSMC. However, Taiwan

okay? and to questions? will that of majority in R&D your continue of Our be Did center production located Taiwan, line answer

Randy Abrams

it best still starting just choosing PPA, decisions, with cost a bit the focused Yes. Or that are you can the more on traditional is to for -- and about Taiwan, raised if best delivery customers That's approach clarify, getting location? they time? clear. maybe And you there customer the get see are just

Jeff Su

Right.

perspective, his customers customers Randy's last by So do question geographic of for is, a from diversification. this a the -- part customer's there want? what is push Or

C.C. Wei

Well, a our in established customer new state. we welcome Arizona fab

Let that. me say

Actually, TSMC that's important consideration them one most the provides, of the However, important the technology, than geopolitical okay? locations. is efficiency to that the it's one manufacturing, the other most is

Jeff Su

right. Thank you, All Randy? Okay, Randy.

Operator

Next the on Gokul JPMorgan. one line, Hariharan,

Gokul Hariharan

to plan for are So question, or be a billion $XX these little the -- spending going around our well? is a higher years we just confusion assuming number. Should plus wanted next billion. years? number levels CapEx about there whether could year in CapEx Just as R&D clarify CapEx run that X this already, that you just that's a about first next that the as primarily bit seeing My because a $XXX Is even capacity CapEx X to or was we number? we some the talk

Jeff Su

Okay.

is number? we the next what the Gokul, CapEx think, Is in that in that CapEx spending that I the next USD So years. then does billion first X to XXX of intend also, for spend mean question your X And years? the a

Wendell Huang

$XXX number. Gokul, this Wendell. is is CapEx billion Yes,

$XX guided years. year next linearity that not the already but going we've X will Now we're billion, this be into in the

we You about can feeling spending X be actually the in have years. next a will what

Gokul Hariharan

a Got question very What the The normalization in see XXXX, when in some that resolve likely capacity end of will this going terms next older capacity or this spending of billion in roughly second inventory there. on or to are also to is stake some towards of we of is $X or specialty tightness is also year to capacity to subscribe degree Does also are cycle that even shortage we spending TSMC year? are new on view lot TSMC a be the capacity? more the we and the see bit as likely feels capacity TSMC early technologies the we industry of My technologies. quite older That's TSMC's guidance in that about on expansion a based bit seeing of well. seems clear. the it.

Jeff Su

Gokul, thank you. Okay.

to try summarize me question. your Let second

particularly nodes, expansion can tightness think, mature -- the wants could to looking cycle XXXX? type and inventory overcapacity that know, we continue at about Is see or the and I some oversupply mature question Gokul? overcapacity second will or mature to nodes. looking year see the the is And towards of Gokul of on that we in in the start end Your this the some asking kind to persist? the notes, Or of correct, on

Gokul Hariharan

Yes.

many think many undersupplied nodes. I are talking competitors highlight, also about to in Just being your of process these XXXX of

TSMC's to view hear wanted that. Just on

C.C. Wei

out inventory structural to Well, the closely to expect Gokul, some an like the our carefully and cannot value rule to of differentiation we or we develop But customer. of meet demand me answer that. because with let customer technology overbooking, possibility actually, and will the and we something question create continue our customers' long-lasting requirement -- work solution actually correction to

As throughout shortage see that and this actually continue the may to we be continue questions? a also. into be result, will And demand XXXX Did extended the your answer high. year

Gokul Hariharan

Okay.

level of period So also hold a to to for feel of about will well? do inventory you continue that time? higher quite way you the as customers Is that down think some inventory

C.C. Wei

Yes.

we've expect for a recede prepare higher soon factor will as and today, level together persist. We will almost Even them and higher to prepare continue but customer, because already believe we COVID-XX a That to inventory. inventory, to of, as of put level sometimes, all the of possible, expect tension do continue while. And geopolitical it them, is X seen that. the of I a we hope

Jeff Su

Yes.

second answer that your Does Gokul? Okay, question?

Gokul Hariharan

you. Thank

Operator

CLSA. Sebastian Hou from we a have Now

Sebastian Hou

strategy. one pricing first So the on is

long-term principle technology I nanometers above. change X respecting talked I mature of with And on to the about pricing ago, to to the partnership want customers. which seem the the the meanXX So nodes, months sticking company doesn't remember, company

has the or And I'm So now adjustment. months latter, changed upward case ago? the still considers that's if the it's versus X now some if wondering if what company

Jeff Su

Okay, Sebastian.

always raise partnership nodes, older saying, price. and that is we pricing. first to our he's he such, long-term And would on customers. says regards Sebastian's question we particular, in And So with talk about we the XX-nanometer -- the

what what has asking today pricing sort he's changed the versus So previously. of strategy and is

C.C. Wei

that. answer me let Sebastian,

the refrained which has because structure cost we said XX my TSMC have start more change, the to as or ever. -- fully already of mature statement, stable opportunistic And on than from invest years, But in now For actions. leading-edge also been depreciated technology than we pricing complex tools. now to and change, and new have which to predictable structural we provided short-term and lot a I the invest of have increased technology, them on we node more the is capacity,

action, So from short-term value. opportunistic we sell had and also we refrain to our but

to are working reasonable our we we deliver growth. earn enable also closely, we we they with return So our supplier level. to our to the one capacity looking the and proper most support is our to a firm important wafer reduction, in continue customers' to invest And for. And cost up work with want are to that a today's us term, customer to and pricing want support

Okay.

Jeff Su

Okay.

Sebastian Hou

it. Got fair. That's And my.

Jeff Su

have a ahead. sorry, Do second go question? you Yes,

Sebastian Hou

Yes. I question. have a do second

in-sourcing plan I -- build seeing of think many chip also internal their seen want capacity because many countries in forced for increase -- or fabrication have to they we're domestically. or some We're crunch. they the some we their IDM, reasons, to are semiconductor capacity add own they globally, increase their

question in my to concerning IDM trend that outsourcing this the not X second if those favorable be decades is lead industry you even driver question. of how past That been effective? in some years. my may some has the growth years coming a few would and overcapacity and this for TSMC And TSMC evolving be could see one So is foundry in

Jeff Su

Sebastian, Okay. let question. me your summarize

and IDMs also looking are countries are capacity. manufacturing expanding Your more domestic pushing at observation for that

few So being how result Sebastian's this next at coming And trend see do Do this result, capacity that's slowing looking could is Or we in excess in question years? it we outsourcing. see built, capacity? IDM this down? the

C.C. Wei

long-term IDMs increase. our continue we in to that continue say to forecast, outsourcing the see me let Sebastian, Well,

provided -- we we we leadership we expand be competitive the IDM that very because And based tried saw product in their that And expand the customers' that we prepare capacity is will the to overcapacity our me also. important the in market. capacity their result own need. that. thing, And And for let of capacity think to most so say technology don't situation on technology the

are with the their developing product So future. they happy for work to TSMC in all now, for

continue so outsourcing a result, we from see to IDMs. the And as increased

Jeff Su

Okay. Sebastian, second answer does question? that your

Sebastian Hou

Yes, does. it Yes.

Operator

one Next from Chan Charlie to question, Morgan ask Stanley.

Charlie Chan

about from, by I of all, coming revenue will So the great. mean, upside for can of does adjustments is XXXX guidance? I change that first those the include pricing applications Can explain ask guidance? be in you And the revised the where some

Jeff Su

All right.

around think Sorry. question to has this what about, Charlie's question, by And Charlie? first I And to now the of is from application, relating driving revenue XX% what is guidance also of XXXX talk he wants say can our changed we change. versus last time. know, last the what to part was

Charlie Chan

capture Actually, hike -- does some that's include it. well? And price as that

Jeff Su

So this he to are for And is guidance? the would guidance include And what the this it. year. in which applications does his is driving change price like it driving increases question growth know in some

Wendell Huang

foundry, with share comment I that on can we're planning the first Charlie, don't everyone's the profile not based we and CapEx all, demand price. megatrends, by short-term industry Okay. on you factors. our cyclical are long-term underpinned of capacity

the to customers' stronger customers our X-nanometer and investments advanced customers X specialty to we on and work seeing compared X-nanometer We more our capacity, our support focus to continue ago. months closely technology growth. with with are to we'll structural And engagements as and on plan

will higher corporate close the terms average, the and than year, expect will and we corporate expect Now IoT smartphone average. growth to this the of -- and that platform, be automotive be we in HPC platform

Charlie Chan

Understood. Okay.

guidance, know upside But cross-border the growing application. or coming like the seems was are upside? last some better. HPC it automotive that what to So I compared just just specific driving

Wendell Huang

ago. Okay. upside months X Actually, all to compared have platforms the

Charlie Chan

term. your Okay. comments intensity back hearing is And years. I to in linked said what if I X conference Because price. some and impact Got case that intensity. But gross margin question XX% capital X updated cost like point, flow quarters that, increase. capital capital sure you some X the gross the not mean trend? my or call, you. the intensity, long-term the coming not to or long today's the that next that's does about then kind company for think keep sure I'm mean about margin long-term about I'm And in can ago, structural also, company's at chemicals trend? of would to equipment I

Wendell Huang

me share Capital with Sure. ahead. Charlie, let you. I'm Go -- sorry.

Jeff Su

intensity And long-term okay. correlate Yes, intensity, trend? stated question long-term capital gross years. is of looking our also then of like does how capital And that, he the intensity Charlie, back think, I next mid-XXs It's the Yes. capital on does few this at with your what mean range? on this for the of looking what the is margin kind --

Wendell Huang

in I've out terms Okay. Charlie, of intensity, already. capital actually given several points

First -- year the if we're you this XXX next USD of be $XX we'll saying and in look all, spending billion. will at be billion years, X

CAGR. We also to say that in revenue XX% the next X years, we expect grow to between XX%

where will intensity our you in years. will idea the probably do if good next about have be capital a you So X math,

we capital level Now longer back intensity. the in at the That's term. expect go capital intensity the still that mid-XX will this moment, to

we therefore, think our nodes, gross the from taking and a of that earn as ensure of I proper nodes investment margins, costs. rising are mature mentioned, we improvement. And terms price, complexity some In leading by we cost material the to to firming return drive actions supplier in manufacturing working due the costs to see already up with C.C. increasing some challenges the new has

expect that margin and We is achievable. gross target the our remains XX%

Jeff Su

Okay?

Charlie Chan

a increase? CapEx demand? Yes. billion assume to case, much if also of versus Okay. the I increase how -- a can is associated quick cost $XXX very And due of cost the part that that's That's so that very, the to

Jeff Su

part intensity, and think to last the then $XXX of I demand. the is billion cost is out how the This this versus due higher much of question -- is the that capital this

Charlie Chan

Yes. Exactly.

Wendell Huang

engagement Okay. our in we're of the few seeing Charlie, basically, years. demand more next

CapEx from and the technology, specialty technology So strong nanometers. X X say especially I the advanced for and our come most would of demand

Jeff Su

Okay. Thank you, Charlie.

Operator

Next Bruce one questions, to ask Lu Goldman from Sachs.

Bruce Lu

I'll CapEx. a with for time to the this $XXX just first stick I mean billion assume question multi-year TSMC CapEx. My announce the is

even growth XXXX, and I plus. think beyond over this very, strong suggests very $XXX billion a

can So strong kind TSMC through when I we Also, nodes, for you continue which bit of tightness foresee the can a mean years X profit seen just can enough road? application as and demand, company be and the CapEx? like us about cycles, do how little we've in down invests resolved? the have the mature confidence you advanced what color node to high X confidence is mostly give like to the assuming demand, this for several more give how such but

Jeff Su

Okay.

CapEx. So level his Bruce is years to to out Both With us that next over the billion? then this of we'll go first second question. see -- the an spend giving has high two maybe a and well, to $XXX such questions. spend -- that And spending, several is our -- related then what intention second confidence first we

C.C. Wei

Okay.

me answer first. that Let one

are fact, so is X-nanometer to customers stronger In with main And more we it. capacity strong the for seeing engagement that we X-nanometer. that's really have on the prepare engagement and the And reason.

So is second? what the

Jeff Su

majority mature looking will on on gap our CapEx, question CapEx the I think, advanced in nodes further then, And his then is widen? the then mature the, of at supply-demand being our nodes, second with nodes the

C.C. Wei

the not capacity node products the mature that market. gap the enough to in see did all support We

the customers' to closely need analyze mature the So mature customer specialty the their my important, technology, we we in so developing market. I our are with are most node product to statement. support competitive and also we in gap on working the as can very invest be preparing technology, are to with the But node, our said

and we node secured decide for so have few capacity. years to demand the can the invest And on we mature next

Jeff Su

Bruce, that questions? Okay. answer does your X

Bruce Lu

one? take I Can Okay.

Jeff Su

There's have of a to sorry. X, Thank you. waiting. We lot still limit people to

Operator

Deutsche Next questions, from Bank. Robert ask Sanders to one

Robert Sanders

question biggest which capacity capacity? normal at to on regarding an how seeing are you by is up than your customers your increased source? those you And asking willingness actually XXXX. you CapEx between was and do first the are demand is commit My And question capacity? booked mid-XXs to My Yes. you customers plans? capacity? node considering rising prepayments? earlier asking are Are derisk that on How And far out for the to gap you single second

Jeff Su

a time. at take we'll Robert, Okay. one questions your

question their for do that first prepayments looking earlier normal? things is commitments from looking this question. our see This Are to are we years. at for next we first customers secure is of his the spending, than like commitments? So level With customer CapEx the few

Wendell Huang

decided The of this increase and see first. fundamental the because the the from of CapEx megatrend, me $XXX let structure Robert, demand is billion we Okay. digital answer multi-year megatrend transformations. the acceleration

detail disclose we customers. Now our our commercial of terms the cannot with

However, will us decision secure returns to investment definitely commitments. make proper for and require customer the

Jeff Su

which nodes we see then in of And the advance what question second demand far booked are how Okay. gap we may and customers do in Robert's biggest terms our want. between is

C.C. Wei

which on almost comment because a in is node nodes cannot I Well, today all the high demand. are --

investment in with capacity the we many plan and to their for to to plan next capacities them. support And the me the next again out X customer as and for However, that. talking we closely the customer work the X that let they for years it TSMC the plan is future, our to stress years capacity because come years, years few for to product few and

Jeff Su

C.C. you. Thank Thank you, Okay. Thank you, Robert.

Operator

Research. from Brett have we Simpson Arete Now

Brett Simpson

question at couple had expansion around the the activity and record I GPU guess quarters. rate of a crypto in mining last TSMC. hash we've I Yes. on Bitcoin basics seen

will now ago, your this couple wanted extreme trillion just $X you had for is of can moment? So expect market this. I perspective on HPC Is the then the volatility is year, A what Bitcoin into portion of with this half decline? we TSMC? second to to get crypto perspective. years us at we business maybe cap. get Do of sales to wanted time your -- you sales be And And I should share get this we the think different? crypto. as around good

Jeff Su

Okay.

longer-term do about So question, do this how from Brett. your is repeat should half And crypto or -- do to cryptocurrency HPC, -- cryptocurrency, say, and of revenue. which this He's business. first in let within what asking asking me question, we expect we I we're seeing our at then mining, is this go a contribution the how this expect year? to view the he's looking we And -- second

C.C. Wei

particular what answer this using our a and cannot TSMC's a on -- But and why how me of comment the I or lot. cryptocurrencies leading I technology, to is Let the TSMC mining even don't market question. much percentage is technology technology sector that's revenue.

today it it was market. volatile or However, mature can X say ago. that X than mining And is years remains more I cryptocurrency a

customers will continue However, we with this to our field. closely in work

Jeff Su

do And Brett? Okay, you have question? a second

Brett Simpson

Yes, I did.

Jeff Su

I'm Yes. sorry.

Brett Simpson

I that NX -- was related. levels mentioned grew it I And significantly. you yes. present. wanted It think Yes. at quite TSMC wanted about to talk inventory I the at

customers they smartphone your and X-nanometer. inventories staying at many shortages leading Now at have you're of are building edge

that? how rise So to inventories looking June then you QX, quarter? And expect reconcile the just do in would again at we

Jeff Su

the first the you're inventory days, TSMC's then the expect Brett, the to Okay. days quarter. asking end so increase in is how this to of inventory second asking And And we in what so do is Brett leading about at trend quarter? right?

Wendell Huang

our as during level did Brett. prebuild seasonal Okay, for customers low we We before.

start ramp before. usually higher the as inventory come season, the we to Now when down in naturally

Jeff Su

question? Does Okay. answer your that

Brett Simpson

Yes.

Jeff Su

Brett. Perfect. Thanks, Great.

Operator

Now please welcome Roland Shu from Citigroup.

Roland Shu

clarify, it to in X $XX bigger, billion about XXXX. CapEx also double implies years. year's billion My even then you And X which CapEx CapEx. target. this And use maybe $XXX or you long-term billion billion intensity $XXX first $XX is also, exceed your included long-term this question billion more of your Last used likely is said $XX time, not? for will this in I level. XXXX capital this I XXXX's or is in Can Then than revenue than to is

enough you of So forward? my talent is, to going the for and train recruit you fast amount to there growth to are such any support challenges question a up

Jeff Su

Okay.

Roland. your me Let summarize questions,

kind part of is XXXX capital capital at support around asking CapEx. he's how 'XX And recruit we look this another And does CapEx XXXX and is then for this billion longer-term Does growth, if this talent intensity? operations? include this asking the $XX Roland then our $XXX the imply and what of intensity, pace to of first, about do So we with billion? that

Wendell Huang

a billion, you year's capital this earlier, intensity, have $XXX said Roland, the CapEx. about probably moment. those will we've capital and calculation about level X-year, we feeling years. term, do The can capital this yes, talked the X And the think, include $XXX see billion mid-XXs in intensity at to 'XX, go back that as intensity do 'XX some I and about I 'XX. Longer

Jeff Su

And we talent to do growth. question his recruit is second then support how our

C.C. Wei

good fortunately, Taiwan priorities this strong our question. support. And Roland, a good and is Very have question. very is top we recent get one communicated in government with The government's talent of the people recruiting years.

to new just and for -- system. to the hire, to actually TSMC So be Right in program new train internally, they to to also very now, all we a established to major to student can be this pushing the grow newcomer And they -- all hire have are faster. semiconductor engineer enable more not the the now in area, area. rough a

So Internally, the own do training. way part externally, we talent to enhance that the meet to And also inside we try TSMC. we enough got of requirement the our help the government. from that's people

Jeff Su

Okay. Thank you, Roland.

that I was. think

Roland Shu

Yes. This actually is question. one

Jeff Su

queue. two Roland, the happy have to Roland, in back okay. questions, we're That's you get

Operator

Andrew Sinolink for Lu Securities. one from is question Next

Andrew Lu

will capacity years? can -- XX-inch just XX-inch increase the is X first kind fine. know Yes. question mature on next we of My Maybe specialty for what advanced the average be and X-inch foundry percentage

Jeff Su

Okay.

in He increasing years, XX-inch. X-inch next on is Andrew's the on capacity know, to and much increase. much how already are the capacity X first So increasing question then we capacity the wants how on

Wendell Huang

basically, kind will you, and in in mask advanced share spent advanced don't technologies. in But that and let of disclose of XX% another Andrew, be making XX% about packaging the we technology, specialty CapEx with me XX% details.

Jeff Su

In X the years. next

Wendell Huang

In years. the next X

Jeff Su

Okay. Andrew, do a second question? you have

Andrew Lu

question the doesn't I second have Yes. but do answer. the really question, first

have I can So more? X

Jeff Su

comment has capacity on think, X-inch not by do just We or said. the I No. XX-inch, Wendell

Andrew Lu

Okay.

is question second not Then Okay. related to price.

been factor model? the additional kind of our rebate into customer year, percentage Assuming has we should growth our -- the What removed. to next

Jeff Su

Okay.

second been Andrew's So removed, he the that year drive should next is how this into year question in model. factor next much will assuming have additional his this growth how rebates and

C.C. Wei

What and confidential of strictly between is customer. pricing TSMC's TSMC kind is

can it's rebate, don't I So that one, comment on any activities. whether other think whether we that it's

Jeff Su

Okay. Thank you. Thank you.

Operator

Next question, one to Lin from ask UBS. Sunny

Sunny Lin

also is question first CapEx. on my So

a can when spend? could explain that you years, next and year's in -- be terms tightness, CapEx for already plan think they additional industry the based on are mentioned makers have I equipment you year equipment So supply this that do this for supply bottleneck for the think especially several Well, CapEx, potential you of few upside EUV.

be would appreciated. color any So

Jeff Su

Okay.

think bottlenecks tools in or EUV. question I is with securing do first we So equipment. particularly part also your the terms regards equipment is that CapEx of our with to question Sunny's of plan, see And and face any

C.C. Wei

the answer me let Well, question.

closely billion with we work In our CapEx, fact, advance. prepare -- and plan to when also we supplier $XXX in

expect it not don't EUV is don't any or actually we work -- So expect we we with and closely them. certainly, whether bottleneck,

Sunny Lin

Got it. Right.

when years, already So would suppliers? this billion X a to your it have -- that already fair announced be for assume $XXX you CapEx it's you next from commitment

C.C. Wei

The answer is yes.

Sunny Lin

My it. is X-nanometer. question Got second

before about in just second year mass half we XXXX. production are Now the of a

production? I XX% close we of point, or this think at its high to to digit contribution single the think first revenue So of should even about year. in X-nanometer, could revenue commercial year first get for in how X- they and

your to just on thought get that. want So

Jeff Su

Okay.

is revenue the for its the first question looking in with production, we contribution how think should at from second schedule X-nanometer Sunny's about So And year? X-nanometer.

Wendell Huang

that. far Sunny, talk about that's too to

do you We about or later long-lasting X on. big will That years NX. away, update just is former yes. like and it's expect we X nodes, But the

Jeff Su

Sunny. you, Thank Okay.

Operator

Right now, KGI. Chen we from have Laura

Laura Chen

to same My inventory Yes. -- still days is inventory first question level. about question similar previous and

-- demand advanced know the what would the TSMC's outlook and all the question. we think particularly what for Or be I we that? worry we But about to the node checking in But would far, so follow? checking point first that and tight. my are quite Because Wendell and in C.C. proceed will may already that high both a start That's probably mentioned be closely while. point? what level inventory

Jeff Su

Okay.

with the type points So the But do What Laura's is we tight. are question She understands demand checking inventory we about is worry the inventory of regards and to levels? first at. that would look inventory levels.

C.C. Wei

this, checking And chain. let supply the at very secured, answer how make are the some to check actually, our to I they to preparing our has say that And Well, we it's due capacity daily, customer not working closely. are future supply, often. and to also. is the for imbalance in we actually that with question. that point, sure are me what the me this been that But that. secure to do we say the we That's let demand the customer TSMC prepare at moment. Yes, all did we for going least test that want It's

Laura Chen

Okay. is the mature my node. also question And second about

special technology mature more may think the mentioned specialty are you CIS be progress I the update now and some the give technology in node, special nitride with for or you node. gallium Can I working mature which me about progress. few design, the mentioned some C.C. also expansion before you next years? recall about the

Jeff Su

Okay.

mature So and that customers at Laura's with is technologies mentioned to at specialty nodes. mature C.C. notes those the to that strategy looking question work second is develop our

Is So examples that Laura? she of correct, more little of is wondering if can give we technologies. types specialty what

Laura Chen

possible. Yes. And well, also it's FD-SOI as if

Jeff Su

areas. other in FD-SOI And

C.C. Wei

ultra-low continue We you the as at sensor if Well, of portable. application look of per the improve power lot, the that let is previously, also me the in automotive, in But mentioned because and everything meet the smartphone, CMOS don't sensor, are on image is we we the most that specialty first. a work there to CMOS the requirement the the okay? technology to I And mobile answer FD-SOI world. in mean the one the I last we the develop one technology develop also image for -- technology fact, se. important

our So Gallium of or customer, kind the high-voltage future, to for application all applications. ultra-low specialty, power is those with we very continue work and high-frequency nitride, the important.

in and We technology. of area become XG's because communication on application fairly also the The era. them. in important RF frequencies a WiFi fairly, important Radio lot RF is of the work

Laura Chen

in that So we further have technology or capacity question, Taiwan? any do to expand here following space those

Jeff Su

space limitation or constraint a be asking Laura So then the will specialty. for is

C.C. Wei

question. Good

are We necessary. to whenever expand our our working with capacity customer

Jeff Su

Okay.

Okay. Right. you, Laura. Thank

Operator

on Next Rick Securities. the from line Hsu Daiwa is

Rick Hsu

I question one Yes. just here. got

X-nanometer. say I going your your is terms. was Wendell wrong, because guidance. QX did -- quarter your U.S.dollar in And inventory for in regarding second also, to sequentially inventory mainly top customers if think revenue don't that your The grow I remember prebuilt increase

X-nanometer assumes quarter. that contribution will also second increase your that in So

exchange So exchange your favorable is backdrop positive also for -- So gross why the X these margin getting below against guidance worse, increase and your factors, also right, rate, quarter right? of and increase, X-nanometer the quarter. the not second first revenue rate,

Jeff Su

Okay.

gross Rick's you lower margin is and first at So if is is midpoint? question use the or looking at quarter it basically declining looking Why guidance. second the the sequential than the quarter

Wendell Huang

you. improvement The inventory absence as rate last to as the high see cost-improvement of the quarter. we explain the time increase, sequential is fabs leaving carries at more a revaluation to thing a me technical level our a continue in very but it NX will still run And a of of let Rick, dilutive cost to utilization, a is Okay. slower do decline from positive due activities. mainly effect. lastly, mix contribution to And secondly,

Jeff Su

Okay. Thank you, Rick.

Operator

is Securities. to Aaron ask one Jeng Nomura from questions Next

Aaron Jeng

not This question call. wish before, of I the so to before end asked ask was

this on $XXX in with which You stronger X months engagement let's are at are question. widening now only the ago, share months as a technology what way: X for your best the years potential gain bigger now? CapEx market you ask compared my leadership X drives you the NX years, market state ago, projecting okay? Then NX over pure than next foundry customers' and and billion is next your X This saw

Jeff Su

Aaron. Okay,

looking and a that is few X-nanometer X-nanometer said months customer what at the at engagement Aaron's stronger fact are we So we ago. than question saw

going that we're or as bigger expect a to gain Is result. share mean larger market Aaron? -- this correct, to does So that

Aaron Jeng

bigger months Yes. X share And than ago. expected market a

Jeff Su

Versus X months ago.

C.C. Wei

Okay.

TSMC's and Let progress to with TSMC leadership, compared X months happily with technology commitment me to answer their have as ago, the is X-nanometer get we Certainly, to question. this one the would say yes. whether indication X-nanometer. with customer I of work engaging that in some And on

with we to product. important and Each continuing can demand. of a the has for always their customer is that their we -- they customer to preference work are the develop need meet thing are actually technology continuing We kind but most different

Jeff Su

Aaron. you, Thank Okay.

Operator

Mehdi question, ask to one Next Hosseinii, SIG.

Mehdi Hosseinii

then depreciation. have the period and were follow-up. rate capital during a depreciation to has growth comparing a last In Back XXXX question question some call, do comparisons to the growth with to at the you see during that of that My of period context, you XXXX? XXXX period a intensity through that conference and Yes. XX%. And prospect increased do of of first changing XXXX, you growth of the XXXX. has and in XXXX with the my provided I rate do earnings How

Jeff Su

Okay.

at, look higher of does looking So the is growth looking looking Mehdi's growth, we first about and also, enter I And depreciation depreciation what question asking a increase. he as our think, at basically, or period is at like. depreciation

XX% to to depreciation does like we that to then beyond? growth period, this year 'XX XXXX Given expect what look CAGR between in and XX% grow the

Wendell Huang

share XX% with can you moment. that around the this with the are higher last to period I at Okay. depreciation you year. the X-year rest of this be will ready than year And depreciation share we not

Jeff Su

have second question, Mehdi? Okay. a Do you

Mehdi Hosseinii

a I Sure. Yes, Okay. question. have second

XX%. customer. you the XX% You But raised to remains your demand same the your at the by CapEx revenue target as spending, CapEx? your revenue raising growth Why aren't raising given you're target the increased

Jeff Su

Okay.

that asking we is raised Mehdi think the spending. I CapEx So

Why so are And what -- the well? why XX%? not raising that to view XX% as our of we target, is growth

Wendell Huang

range. the the big to target range, pretty than to you if -- think a currently last XX% actually, it's this what maybe forecast, closer the higher XX% Mehdi, is higher within From to revenue CAGR, X-year still that time. end about we

Jeff Su

Mehdi. you, Thank Thank Okay. you.

Operator

have from Suisse. Randy Abrams Crédit we Now

Randy Abrams

Okay. Yes.

the give the how are on the end, momentum for and SoIC update the one spending and and CoWoS The pace. an keeping that's InFO new also back seeing on then progressing? you first Could you're

Jeff Su

Okay.

first So is Randy? to right, Is well update as want question progressing He solutions. -- know SoIC our and CoWoS an wants Randy's packaging solutions. that advanced on other as is how on the

Randy Abrams

Yes. That's correct.

Jeff Su

Okay.

C.C. Wei

Okay.

adopted I offer comment very And applications. high-performance start SoIC it's to small the we This it XXXX. HPC think, most advanced is that And volume will the first. our on Let in me back-end actually a also technology, by to customer. production

to will And to portfolio. the increase will CoWoS customer I our start continue InFO years. we CoWoS, and and -- InFO for business expect from continue in As that next the to expand several

Randy Abrams

Okay. Great. And one quick that. just I have on one

applications. high-performance very mentioned You

expect of wanted for SoIC, And should be pretty saw ramps, runner big should ask TSMC? a it in years, InFO to you a for question. ramp couple be in -- like like that a volume good we do big or then second the past a it also, as I a

Just a getting in second be margin X will gross half. clarification couple of more on mature.

utilization, So I'm depreciation curious, a if range in to you're we above factoring more if guidance, your second bit view able X getting the long-term very stay running the mature, may margin XX% half. or your tight gross be is

Jeff Su

Okay.

on So SoIC, be outlook also can for large second a Randy a it wants margin, time? quick a few margin in How it wants be years' one. know contributor? then to And He will gross -- gross half. the large

C.C. Wei

the revenue specific grow. is be by in to expect HPC I growth hope the bit will average. applications back-end We corporate the be customer. what number But that we higher But going nail adopted than little those the cannot service SoIC the rate all will future. And to rate our continue -- down a do

Wendell Huang

it's to details margin, gross on a half too second about Randy, give that. early Okay. bit

percentage the this under to we environment. things. several margins, carries negative still very revenue. contribution or high-utilization is cost points. dilutive -- mentioned NX already tight. effect trying on has our pretty you've X become improve will pretty continue However, to Utilization in the bigger It X -- about a still And to

share this the So at that's can moment. we all things with you

Randy Abrams

Okay. in. fit And I can if

Jeff Su

Sorry, thank Randy. yes, you. I'm sorry, that's X questions because we're --

Operator

will one Hariharan JPMorgan. Gokul next from The Okay. be

Gokul Hariharan

second, think first also had XX as of and et leading-edge years, of demand but HPC the we smartphone drove should in think lot driver had which My fourth in in question cetera, terms wave processors, we wave? is about third, how second growth demand cadence a we for as well was any ICs our big node. I our smartphones third growth process for the from last of applications, the when other

demand? past? think key up drivers Or we that now wave question. to how NX, about of with it we That's doing et second-, one seems first compared the first for and conversion think growth, cetera? be should be the the keep for do TSMC second capacity NX, about HPC more my Would third-wave in will So to

Jeff Su

Okay.

wondering the or along demand, becoming first do question looking looking waves HPC adopters driving and our waves of with Gokul's demand will second convert leading-edge how though, HPC is smartphone, at HPC also, capacity. for how So see He's at of and nodes. first-wave then, additional additional will the HPC -- is we of we

C.C. Wei

CPU, comment. product life GPU, AI-accelerated et Let networking, me application Actually, some subsegment HPC path the cetera, their as et one different video and gaming, FPGA, includes will also. cetera. make own many migration And such cycle each have

So in see waves actually. HPC, we expect in but to that questions? first our the the your of Did in additional only leading answer node not future, demand to support wave,

Gokul Hariharan

That's clear. Okay.

Jeff Su

have you question? Do a second

Gokul Hariharan

wanted just to Second yes. question, --

any Just thoughts to up from follow wanted the fab Arizona TSMC on on capacity.

your cadence in move about just month Taiwan we capacity? U.S. I to this wafers capacity regarding more Arizona of announced that like how Do customers you've is we we potential already been -- I more understand upside customers XX,XXX in there? X-nanometer thinking Are coming discussion let's will wanted an XXXX right capacity? asking you -- seems quicker of edge already. has started right this X-nano feel that or a because Do for now, or leading shorter more cadence to What for think any now. say, in n-X a in, this per XXXX. up TSMC with feel to

Jeff Su

cadence. And we fab your the Gokul's what asking know that production. with for Okay. there additional is question Arizona. is capacity He our NX, the wants more start U.S. on about also, I for plans and manufacturing and customer bringing our more in to is second question our technologies guess future or

C.C. Wei

Okay.

our flexibility. wafer per in this fact, Phase we XXXX Arizona will to a land of executing are month X in the Arizona provide are But as to starting production, acquired plan start schedule have piece technology. construction We said, a with in we you according X-nanometer XX,XXX and large year.

So but demand what based the further the possible, to Phase to also first, cost efficiency we going customers' is X and next expansion steps are the we decide to then ramp on up do. economics will and operation

be available just all they world customer to our will TSMC's fab no in U.S., Arizona matter other commerce world the located. no from our matter fab, customers all to around -- Our the they're build and support capacity like in and where are where the and

Jeff Su

you. Thank Okay.

Operator

Sebastian Yes. to Hou, ask one last The question, CLSA.

Sebastian Hou

question. one have only I Yes.

that earlier, customer the C.C.'s the on has demand with C.C. analyze So working just the closely mentioned that gap follow-up trailing-edge TSMC nodes. a comments between to and been capacity on

exclude when So CapEx situation analysis, question still wondering based have. we significantly only investing you Furthermore, and the if you you think the you do capacity your is or the shortage I removed? If are in eased supply? on the And gap, the on the peers number shared? time, expansion have tightness whole be That's can us. lead be best color can exceed can demand be if and based could some does share overbooking how portion the rough with that the your any big

Jeff Su

Okay.

Sebastian. question, your summarize to try me Let

fact in the closely, very You're older mature of TSMC supply/demand our but the nodes, those that asking, customers with nodes. on at also the looking works

So will mature see with eventually Is and when supply added, tightness the -- nodes? the the that of correct, an capacity at we easing will additional Sebastian?

Sebastian Hou

Yes. your if part, if demand the right exceeding still is the And best also, you can, overbooking we estimate, with exclude whether supply now.

C.C. Wei

be with All we I said, closely. customer you, right. frank work with To as

calculation, is and work we of customer in internally, said, exclude out the very although as closely. this it possibility. overbooking detailed But the we our do I not so And with not did analysis

mature for node the capacity prepare we so them. And

green However, available the until capacity, install be won't building start also and to XXXX. it a a fab fab from

capacity we little tightening next at capacity I will that support our that still more release year next so the we and I expect hope and XXXX, customers. year. a to time, chains And bit. And supply this continue start can will probably year, to offer tightening see also the

Jeff Su

Okay. Sebastian, does that answer your question?

Sebastian Hou

Yes.

supply still that it to fair will for that we to situation, right? us very be in the conclude it in XX is that tight assume safe the months, is is So next

C.C. Wei

it's working For right. you are tight. our But customers, are me still very say let that. them, we Yes, with

Jeff Su

our Okay. Q&A concludes Thank This session. Sebastian. you,

available Before website transcript now, the be available both become we replay XX now please and of from conclude today's will to within that accessible at hours the conference, are will from advised be the www.tsmc.com. conference TSMC's hours X of going be through which

We for you hope you a good hope and continues next again us we stay and thank joining So today. healthy quarter. everyone Goodbye, to safe, and will have us day. join