Summary of TSMC Conference Call Company Overview - Company: TSMC (Taiwan Semiconductor Manufacturing Company) - Industry: Semiconductors - Market Cap: NT1,388.00, representing a 31% upside from NT1,060.00 as of February 14, 2025 [7] Key Points and Arguments US Fab Expansion - TSMC's decisions regarding US fab expansion will prioritize customer needs and shareholder value rather than supporting Intel [2][3] - TSMC management previously stated they would not consider a joint venture (JV) in the US, unlike in Japan and Europe, due to existing business advantages in leading-edge technology [4] - TSMC is not interested in acquiring Intel's US fabs, as they expect significant business from Intel as an IDM customer [5] R&D and CoWoS Capacity - There is skepticism about the necessity of moving R&D to the US, given the strong R&D capabilities of Intel and IBM [9] - TSMC's CoWoS (Chip on Wafer on Substrate) capacity in the US will depend on key customer needs, with potential cost-sharing arrangements [10] - TSMC has partnered with Amkor for CoWoS in the US, which may address local production demands [10] Market Dynamics and Financial Outlook - TSMC has invested US37 billion in R&D over the past decade, contributing to its competitive edge [11] - The company anticipates that US tariffs could impact long-term margins, but remains optimistic about growth driven by AI demand and its technological leadership [11][17] - Inventory corrections are expected to persist into the second half of 2024, with a potential increase in outsourcing from Intel's CPU business in 2025-2026 [17] Risks and Considerations - Potential headwinds include the impact of US tariffs and geopolitical issues, which may act as a stock overhang until further clarifications are provided [11] - TSMC's gross margin is projected to remain above 53% in the long term, with pricing strategies for large customers being a key factor [17] Additional Insights - TSMC's growth strategy is closely tied to its relationships with key partners and customers, emphasizing the importance of shareholder benefits in decision-making [11] - The semiconductor industry is experiencing a shift, with TSMC maintaining a strong market share in leading-edge foundry services despite potential demand weaknesses [17] This summary encapsulates the critical insights from TSMC's recent conference call, highlighting the company's strategic direction, market positioning, and financial outlook.
TSMC_ Addressing investor questions on TSMC’s US fab plan
2025-02-19 16:52