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TSMC Earnings Q3 2021

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Q3 2021 Financials

  • Revenue: US$ 14.88 Billion

  • Gross Margin: 51.3%

  • Operating Margin: 41.2%

  • Net Profit Margin: 37.7%

  • Shipment: 3.646 M 12-inch equivalent wafers

  • Capital Expenditure: NT$ 189 Billion

  • Days of Inventory: 85

Revenue by Technology

  • Advanced Nodes (<=N7) make up 52% of revenue
  • Nodes from 16nm - 65nm make up 31% of revenue
  • N5 revenue QoQ increased by <7.5%
  • N7 revenue QoQ increased by ~20%

Revenue by Technology

Revenue by Platform

  • Smartphones and HPC make up a massive 81% of revenue
  • IoT revenue QoQ increased by 23%
  • DCE revenue QoQ decreased by 2%

Revenue by Platform

Q4 Guidance

  • Revenue: US$ 15.4 Billion - US$ 15.7 Billion
  • Gross Margin: 51% - 53%
  • Operating Margin: 39% - 41%

Japan Expansion

  • Process Nodes: 22ULP and 28nm
  • Construction Start: 2022
  • Production Start: Late 2024
  • No oversupply as it uses specialty technologies
  • Not included in US$ 100 Billion Capital Expenditure by 2023

Future Nodes

  • Competitive Schedule

N3

  • Risk Production: 2021 (Schedule)
  • Production (HVM): H2 2022
  • Most advanced foundry technology in PPA and transistor technology [3GAE with GAAFET is in 2022, so the latter is doubtful]
  • Large and long-lasting node
  • Expected Tapeouts: More than N5 for the first year
  • Cost: Higher than N5 (Technological complexity and new equipment)
  • Ramp-up similar to N5
  • Revenue will be seen in Q1 2023 [Q4 2022 HVM with long cycle times]

N3E

  • Extension of N3
  • Improved Performance, Power and Yield
  • Production (HVM): H2 2023
  • Enhanced manufacturing window [Shorter cycle time]
  • [Most likely the “Less EUV” node that has been reported]

N2

  • Density and performance will be the most competitive in 2025 [>2 year cadence]
  • GAA Structure is considered
  • [Dodging question about Intel’s process technology plans]

Capacity

  • Capacity will remain very tight in 2021 and throughout 2022
  • Does not rule out the possibility of an inventory correction
  • Believes a correction could be less volatile due to increased focus on 5G and HPC
  • Fab utilisation continues to be high
  • More customers are making pre-payments to secure capacity

Capital Expenditure

  • Still able to achieve >=50% margins despite higher capital expenditure per thousand wafers
  • Mature node expansions will continue

New Fabs

  • Does not consider Joint Ventures with governments
  • Prefers to own 100% of overseas fabs

Automotive Supply Chains

  • More complicated than initially thought
  • Only participates in 15% of automotive ICs
  • Cannot solve industry’s supply challenges
  • Wafer substrate supply should improve in the third quarter [2022?]

Other

  • Strategic, not opportunistic pricing

References