Text / Lin Hongda
According to the “Financial News” report, there is news in the industry that starting from November, TSMC will lease 6 charter planes to send American employees trained in Taiwan to the Arizona plant in the United States; at the same time, TSMC Deputy General Manager Wang Yinglang will be in charge. Chairman of TSMC’s Arizona plant operations, and led a team including the plant manager to take charge of the Arizona plant’s manufacturing.
“Change” Arizona factory connects to aerospace
Industry insiders have observed that there will be transfers among the directors of advanced process plants such as TSMC 15 and 18. “Right now, the Arizona plant is rushing to work, and the machines will be stationed soon. The goal is to trial production by the end of next year and mass production the year after.”
“Financial News” reported that TSMC said that trainees from the US factory have arrived in Taiwan for training since April last year. The training time is about 12 to 18 months. It is expected that they will return to the United States one after another from the end of October; The CEO and general manager is Rick Cassidy. Wang Yinglang has no plan to be transferred to the Arizona factory. The factory manager of the Arizona factory has already been selected. However, since the Arizona factory is in the 5nm process, Wang Yinglang is the director of advanced manufacturing. It will be responsible for the related operations of the Arizona plant, and it is normal to rotate between plant directors at TSMC.
The launch of TSMC’s Arizona plant is a major change that TSMC will face now. This will allow TSMC’s advanced manufacturing process and the development of new American technologies to develop deeper cooperation. “Aerospace chips are one of them.” According to industry sources, there are more and more chips used in aerospace such as low-orbit satellites on TSMC production lines, and the chips are getting bigger and bigger. In the past, a 12-inch wafer would be manufactured into thousands or tens of thousands of ICs, but now On the production line, there is even a super-large integrated circuit with only one IC on the entire wafer. The size of this IC is almost as big as the motherboard!
“This IC is designed for aerospace and data centers.” According to the “Financial News” report, industry sources revealed that the cost of the Arizona factory is bound to be higher than that of Taiwan in the future, but for aerospace and other supply chains that require high reliability, these components The requirement must be made in the United States, and customers can check the factory at any time. “For these customers, it is acceptable to have a higher cost.” Following the same logic, TSMC originally delayed setting up factories in Europe, but it has recently turned positive because TSMC has accelerated the development of automotive chips, and setting up factories in Europe will help TSMC develop automotive chips.
However, the outside world also believes that the cost pressure of the Arizona plant is not small, and it will be challenging to catch up with the Taiwan plant in the short term. In the past year, TSMC’s revenue and profit have repeatedly hit new highs, but the stock price has been affected by the US interest rate hike and the stock exchange market. This year, the stock price fell from 688 yuan to 390 yuan in October, and 43% of the stock price evaporated. However, TSMC’s third-quarter law will reveal that the third quarter is the high point of TSMC’s revenue and profit this year. Next, the following variables will affect TSMC’s profit.
When will the “Challenge 1” inventory pressure peak?
According to the “Financial News” report, at the third-quarter legal meeting, TSMC President Wei Zhejia said that the inventory reached a peak in the third quarter, “then it will gradually decline”, he added, “but the most stressful time point will appear next year. the first half of the year.”
However, Chen Yiping, deputy general manager of Isaiah Research, observed that TSMC’s capacity utilization rate below 12 and 16 nanometers will drop by at least 6-7 percentage points from the third quarter to the first quarter of next year. Influenced by the recent U.S. ban, we believe that the overall decline in advanced processes may be far more than 10 percentage points. The decline in some mature 12-inch processes is relatively conservative, and we need to continue to observe changes in end applications and product line adjustments.”
She added, “At present, we see that the capacity utilization rate of wafer foundries in March is still declining, and the first half of the year is mostly the traditional off-season, so it is expected that the second quarter of next year will have a chance to fall.” A chief financial officer of a semiconductor company It is optimistic that the current inventory is being depleted, and after the first half of next year, the growth will resume in the second half of the year.
“Financial News” analysis, but even if demand is sluggish, from January 1 next year, TSMC will still increase the price of wafer manufacturing, and it remains to be seen whether IC design customers will further cut orders. In other words, although inventories have begun to decline, since the end of the year is the traditional peak season, the pressure will really emerge in the first half of next year.
At the legal meeting, TSMC revealed that the challenge next year is that a series of cost increases will be reflected in the financial report. As TSMC continues to expand its factories significantly around the world, according to the content of TSMC’s third quarter legal meeting, TSMC Chief Financial Officer Huang Renzhao said, “This year’s depreciation has only a single-digit impact on the financial report, but the depreciation cost of new financial reports next year will increase significantly.”
“Challenge 2” It is difficult to reduce the cost of overseas factory construction
“Financial News” reported that setting up factories overseas is also a challenge to profitability. Huang Renzhao said, “Overseas costs will be relatively high due to labor costs, but will be solved in cooperation with the U.S. government and customers.” The Kumamoto factory in Japan is gradually advancing, which will also increase the cost in the short term. TSMC is also worried that inflation will also push up operating costs. Therefore, although TSMC’s gross profit margin is as high as 60.4% this quarter, TSMC still emphasizes that its long-term gross profit margin target is “above 53%.” TSMC’s ultra-high gross profit margin in the third quarter may not be sustainable for a long time.
At the same time, supply chain shocks also continue to affect TSMC’s ability to obtain equipment. Wei Zhejia revealed that an EUV exposure machine with a high cost may not be able to be delivered because of a few $10 chips. He also said at the French conference, “The range of equipment that is currently lacking is very wide, including exposure machines.”
At the same time, “Financial News” analyzed that TSMC’s 3-nanometer process will be put into production next year, which is a key development period for an important technology node of TSMC. “This will affect the gross profit margin next year by 2 to 3 percentage points, but we can still maintain Structural profitability.” Huang Renzhao said.
“Challenge 3” Semiconductor outlook for next year is weak
This year, the demand for the semiconductor industry has turned from prosperity to decline, and the stock market capital is extremely sensitive. Even though the profits of various semiconductor factories have hit high, the stock prices have continued to fall.
At this meeting, Wei Zhejia also admitted that the global semiconductor industry will experience negative growth next year, but TSMC will still maintain growth. The magazine interviewed that TSMC is now fully cooperating with automotive manufacturers. In the past, the technology used in automotive chips was at least 2 generations behind that of mobile phones. Now TSMC is changing this matter and using advanced processes to help automotive manufacturers upgrade. TSMC comes from The ratio of automotive chips may grow rapidly in the future.
However, according to the “Financial News” report, U.S. interest rate hikes are still putting heavy pressure on technology stocks, and the U.S. Federal Reserve will continue to raise interest rates significantly this year, which may eventually bring interest rates closer to 5%. TSMC’s dividend is 11,000 yuan per share this year. Calculated at a stock price of 389 yuan, the yield rate is about 2.8%. In order to implement a rapid expansion strategy, TSMC stated at the third quarter legal meeting that it would not use the money to buy treasury stocks, because Using it to expand production capacity is more beneficial to shareholders’ long-term profits. But in the short term, the pressure on TSMC’s share price will continue until the end of the U.S. interest rate hike next year.
However, TSMC’s price-earnings ratio has dropped to 13 times, and some long-term investors have slowly entered the market to test the bottom of TSMC’s stock price.
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