台積電 ADR (TSM) 2013 Q4 法說會逐字稿

(Spoken in foreign language) Welcome to TSMC's Fourth Quarter 2013 Earnings Conference and Conference Call. This is Elizabeth Sun, TSMC's Director of Corporate Communications and your host for today.

(外語)歡迎參加台積電2013年第四季財報會議及電話會議。我是台積電企業傳播總監伊莉莎白·孫，也是今天的主持人。

Before we begin, please let me extend our warmest wishes to all of you for a very happy year of the horse. Today's event is webcast live via TSMC's website at www.tsmc.com. If you're joining us through the conference call, your dialing lines are in listen-only mode. As this conference is being viewed by investors around the world, we will conduct this event in English only.

在我們開始之前，請容許我向大家致以最熱烈的祝福，祝福大家馬年快樂。今天的活動透過台積電網站 www.tsmc.com 進行網路直播。如果您透過電話會議加入我們，您的撥接線路將處於只聽模式。由於此次會議將受到全球投資者的關注，因此我們將僅以英語進行本次活動。

The format for today's event will be as follows. First, TSMC's Senior Vice President and CFO, Ms. Lora Ho, will summarize our operations in the fourth quarter and full-year of 2013, followed by our guidance for the current quarter. Afterwards, TSMC's Chairman, Dr. Morris Chang and TSMC's two Co-CEOs, Dr. Mark Liu and Dr. C.C. Wei, will jointly provide a couple of key messages. Then we will open both the floor and the line for the Q&A.

今天活動的形式如下。首先，台積電資深副總裁兼財務長何麗拉女士將總結我們2013年第四季及全年的營運情況，並給予本季的預期。隨後，台積電董事長張忠謀博士與台積電兩位聯席執行長劉德華博士、陳建強博士分別致詞。魏先生將共同傳遞幾點重要訊息。然後我們將開放現場和熱線供大家提問。

For those participants on the call, if you do not yet have a copy of the press release, you may download it from TSMC's website at www.tsmc.com. Please also download the summary slides in relation to today's earnings conference presentation.

對於電話會議的參與者，如果您尚未收到新聞稿，您可以從台積電網站 www.tsmc.com 下載。請同時下載與今天的收益會議報告相關的摘要投影片。

As usual, I would remind everybody that today's discussions may contain forward-looking statements that are subject to significant risks and uncertainties, which could cause actual results to differ materially from those contained in the forward-looking statements. Please refer to the Safe Harbor notice that appears on our press release.

像往常一樣，我想提醒大家，今天的討論可能包含前瞻性陳述，這些陳述受重大風險和不確定性的影響，可能導致實際結果與前瞻性陳述中的結果有重大差異。請參閱我們新聞稿中的安全港通知。

And now, I would like to turn the podium to TSMC's CFO, Ms. Lora Ho.

現在，我想請台積電財務長何麗拉女士發言。

Thank you, Elizabeth. Good afternoon and happy New Year to everyone. Thank you for joining us today. I will start my presentation with financial highlights for the fourth quarter and the recap of 2013 financial performance, followed by the guidance for the first quarter of 2014.

謝謝你，伊麗莎白。下午好，祝大家新年快樂。感謝您今天加入我們。我的演講將從第四季的財務亮點和 2013 年財務表現回顧開始，然後是 2014 年第一季的指引。

In the fourth quarter, TSMC's business was negatively impacted by semiconductor supply chain's inventory management. On a sequential basis, fourth quarter revenue declined 10.3% to TWD146 billion. Gross margin was 44.5%, down four percentage point from the third quarter, mainly due to lower capacity utilization. Total operating expenses decreased 11% as we took several expense-cutting measurements during the quarter. This leads to an operating margin of 32.8%, down 3.9 percentage point from the third quarter.

第四季度，台積電業務受到半導體供應鏈庫存管理的負面影響。與上一季相比，第四季營收下降 10.3% 至 1,460 億新台幣。毛利率為44.5%，較第三季下降4個百分點，主要由於產能利用率下降。由於我們在本季採取了幾項削減費用的措施，總營運費用下降了 11%。這導致營業利益率為32.8%，較第三季下降3.9個百分點。

Non-operating items was again of TWD2.6 billion. We have reversed the TWD1.2 billion impairment loss due to strong business recovery from one of our invested company. In addition, we received the last payment of litigation settlement from SMIC. Overall, EPS was TWD1.73 in the fourth quarter. ROE was 21.7%.

非營業項目再次達到26億新台幣。由於我們投資的其中一家公司的業務復甦強勁，我們已扭轉了12億新台幣的減損損失。此外，我們也收到了中芯國際最後一筆訴訟和解款項。整體來看，第四季每股收益為1.73新台幣。股本回報率為21.7%。

Let's take a look at revenue by applications. During the fourth quarter, inventory correction continued across all major segments of the semiconductor supply chain. Our communication, computer and consumer-related revenue declined 13%, 7% and 20% respectively, while industrial and standard product remained flat during the quarter.

我們來看看各應用程式的收入。第四季度，半導體供應鏈所有主要環節的庫存調整持續進行。我們的通訊、電腦和消費相關產品的收入分別下降了 13%、7% 和 20%，而工業和標準產品的收入在本季保持持平。

On a full year basis, communication increased 29% and represented 54% of our revenue of 2013. This reflected the strong demand for application processors, baseband, display drivers and other peripheral ICs used in mobile computing devices. Computer decreased 10% with PC graphics declining the most. Consumer increased 43% year-over-year, reflecting the strong demand in the next generation game consoles. Industrial and standard increased 14% as mobile devices use various ICs enabled by our specialty technologies, such as touch controller and power management IC, et cetera.

從全年來看，通訊業務成長了 29%，占我們 2013 年營收的 54%。這反映了對行動運算設備中使用的應用處理器、基頻、顯示器驅動器和其他外圍積體電路的強勁需求。電腦下降了 10%，其中 PC 圖形下降幅度最大。消費性電子較去年同期成長43%，反映出對下一代遊戲機的強勁需求。由於行動裝置使用由我們的特色技術支援的各種 IC，例如觸控控制器和電源管理 IC 等，工業和標準成長了 14%。

By technology, 28- nanometer contributed 34% of our total wafer revenue in the fourth quarter, up from 32% in the third quarter. On a full year basis, 28-nanometer tripled and they contributed about 30% of our total wafer revenue, a big increase from the 12% in 2012.

按技術劃分，28奈米技術在第四季貢獻了我們晶圓總營收的34%，高於第三季的32%。從全年來看，28奈米成長了兩倍，貢獻了我們晶圓總收入的約30%，較2012年的12%有大幅成長。

Now let's move on to the balance sheet. Cash and marketable securities was TWD245 billion at the end of the fourth quarter. Current liability increased by TWD42 billion, due to higher accounts payable to equipment suppliers. Accounts receivable turnover days increased to 48 days. Days of inventory remained at 45 days.

現在讓我們來看看資產負債表。第四季末現金與有價證券為2,450億新台幣。流動負債增加了420億新台幣，是因為應付設備供應商的帳款增加。應收帳款週轉天數增加至48天。庫存天數維持在45天。

Let me make few comments on the cash flows. During the fourth quarter, we generated TWD103 billion from operations, invested TWD74 billion in capital expenditure and repaid TWD2 billion short-term loans. At the end of the fourth quarter, our cash balance increased TWD26 billion to TWD243 billion. In the fourth quarter, free cash flow was an inflow of TWD29 billion.

讓我對現金流發表一些評論。第四季度，我們營業利潤1030億新台幣，資本支出740億新台幣，償還短期貸款20億新台幣。截至第四季末，我們的現金餘額增加了260億新台幣，達到2,430億新台幣。第四季度，自由現金流流入290億新台幣。

Now I would like to give you a recap of our performance in year 2013. 2013 was another record year for TSMC. Thanks to the technology leadership and excellent manufacturing execution in 28-nanometer, we were able to capture the strong growth in mobile computing market. From the financial point of view, revenue increased 18% year-over-year to reach TWD597 billion or in the US dollar term about $20 billion.

現在我想向大家回顧一下我們2013年的表現。2013年對於台積電來說又是創紀錄的一年。憑藉28奈米的技術領先地位和出色的製造執行，我們得以抓住行動運算市場的強勁成長。從財務角度來看，營收年增18%，達到5,970億新台幣，以美元計算約200億美元。

On the profitability side, gross margin declined 1.1 percentage point to 47.1%, due to lower capacity utilization in 2013, while our structural profitability continued to improve. On cash flow, we spent TWD288 billion or $9.7 billion in CapEx, up 17% from 2012. However, we were able to grow operating cash flow at a faster rate of 22% to reach TWD347 billion. Therefore, free cash flow increased by 54% year-over-year to reach TWD60 billion.

獲利方面，由於2013年產能利用率較低，毛利率下降1.1個百分點至47.1%，同時我們的結構性獲利能力持續改善。在現金流方面，我們的資本支出為2,880億新台幣或97億美元，比2012年增加17%。然而，我們的營運現金流卻以更快的速度成長22%，達到3,470億新台幣。因此，自由現金流年增54%，達到600億新台幣。

On earnings, income before tax increased by 19% versus 2012. Meanwhile we took a hit by the higher effective tax rate. The effective tax rate went up from 9% in 2012 to 13% in 2013. As a result, EPS increased at a slower pace of 13% to reach TWD7.26, set a new record. Overall, our ROE was 24% for the whole year, met our long-term financial objective of bigger than 20% ROE.

就收益而言，稅前收入較2012年增加了19％。同時，我們受到了更高有效稅率的打擊。有效稅率從 2012 年的 9% 上升至 2013 年的 13%。因此，每股盈餘以13%的放緩速度成長，達到7.26元新台幣，創下新高。整體來看，我們全年的ROE是24%，達到了我們長期超過20%的財務目標。

I have finished my report on financial part. Now, let me provide you the first quarter outlook. Based on the current business expectation and a forecast exchange rate of TWD30, we expect our revenue to be between TWD136 billion and TWD138 billion. This would translate into 6% Q over Q decline. On the margin side, we expect the first quarter gross margin to be between 44.5% and 46.5% and operating margin to be between 32% and 34%.

我已經完成財務部分的報告。現在，讓我向您提供第一季的展望。基於目前業務預期及預測匯率30新台幣，我們預計營收將在1,360億至1,380億新台幣之間。這意味著季度環比下降 6%。在利潤方面，我們預計第一季毛利率在 44.5% 至 46.5% 之間，營業利潤率在 32% 至 34% 之間。

As you can see, first quarter gross margin is expected to be better than the fourth quarter, despite a lower revenue. Let me explain why. You all know our business has certain seasonality. First quarter is normally a slow quarter. If we can start wafers earlier in the slower quarter, then we will be able to complete more wafers in the following quarters when the business pace picks up. This way we're able to complete and ship more wafers to support a surge demand in a peak quarter without having to build to a peak capacity for that quarter. Meanwhile, we can also benefit from better utilization rate in the slower quarter and improve our profitability. We began to implement this practice few months ago and expect it to benefit our gross margin by 2 percentage points to 3 percentage points in the first quarter.

如您所見，儘管收入較低，但預計第一季的毛利率將優於第四季。讓我解釋一下原因。大家都知道我們的業務有一定的季節性。第一季通常是一個淡季。如果我們能在業務較慢的季度早些時候開始生產晶圓，那麼當業務節奏加快時，我們將能夠在接下來的幾個季度完成更多的晶圓。這樣，我們就能夠完成並運送更多的晶圓來支持高峰季度的激增需求，而不必在該季度建立峰值產能。同時，我們也可以從較慢季度更好的利用率中受益並提高​​獲利能力。我們幾個月前就開始實施這項做法，預計第一季毛利率將提高2個百分點至3個百分點。

Another thing I want to highlight is the tax rate for 2014. We expect our full-year effective tax rate to be about 13.3%, which is about the same as 2013's 13%. However, from a quarterly perspective, second quarter would carry about 40% the total tax burden for the whole year, due to the need to accrue the 10% on undistributed retained earnings.

我想強調的另一件事是 2014 年的稅率。我們預計全年有效稅率約為13.3%，與2013年的13%大致相同。但從季度角度來看，第二季由於需要提列10%的未分配留存收益，因此將承擔全年總稅負的40%左右。

This concludes my remarks. Let me turn the podium to our Chairman, Dr. Morris Chang.

我的發言到此結束。請容許我將講台交給我們的主席張忠謀博士。

Good afternoon, ladies and gentlemen. Today, our comments are scheduled as on the slide on your left. First, I'm very glad to have the opportunity to introduce our new top management team. I'd first start with Lora, although I think everyone knows Lora well. Lora has a bachelor's degree from Chengchi University, a master's degree from National Taiwan University, both degrees in finance. She worked for Cyanamid, Wyse, Thomas & Betts and TI-Acer before she joined TSMC in 1999. And she has been TSMC's CFO since 2003.

女士們、先生們，午安。今天，我們的評論安排在您左邊的幻燈片上。首先，我很高興有機會介紹我們的新高階管理團隊。我首先想從 Lora 開始，儘管我認為每個人都很了解 Lora。Lora 擁有政治大學學士學位和台灣大學碩士學位，均為金融學位。1999 年加入台積電之前，她曾在 Cyanamid、Wyse、Thomas & Betts 和 TI-Acer 工作過。自2003年起，她一直擔任台積電財務長。

Next, Dr. C. C. Wei. C. C. has a bachelor's degree from Chiao Tung University and a Ph. D. from Yale University, both in electrical engineering. C. C. worked for TI, SGS, Chartered before joining TSMC in 1998. C. C. has been Senior VP of Operations, Senior VP of Business Development, Co-COO, and in the Co-COO job CC was successively responsible for R&D and Operations. Now C.C. is President and Co-CEO. C.C. is 60 years old and I should add that Lora is 57 years old.

接下來是 C.C. Wei 博士。C. C. 擁有交通大學學士學位和博士學位。我畢業於耶魯大學，獲得電機工程博士學位。C. C. 於 1998 年加入台積電之前曾在 TI、SGS、Chartered 工作。C. C. 曾擔任營運高級副總裁、業務發展高級副總裁、聯席首席營運官，在擔任聯席首席營運官期間，CC 先後負責研發和營運。現在是 C.C.是總裁兼聯合執行長。C.C.已經 60 歲了，我還應該補充一下，蘿拉已經 57 歲了。

Mark Liu; Mark has a B.S. from National Taiwan University and a Ph. D. from Berkeley, both in electrical engineering and computer science. Mark worked for Intel, Bell Telephone Labs before joining TSMC in 1993. And at TSMC he has been VP, Senior VP of Operations and he was also a Co-COO, and all the time he was Co-COO he was responsible for our sales, marketing and planning. And now Mark and C.C. are Presidents and Co-CEOs of the Company. Mark is 59 years old.

劉傑;馬克擁有理學學士學位。畢業於台灣大學，獲博士學位。他於伯克利獲得電機工程和計算機科學博士學位。1993 年加入台積電之前，馬克曾在英特爾、貝爾電話實驗室工作。在台積電，他曾擔任副總裁、營運高級副總裁以及聯席首席營運官，擔任聯席首席營運官期間，他負責我們的銷售、行銷和規劃。現在輪到 Mark 和 C.C.是該公司的總裁兼聯合執行長。馬克今年 59 歲。

I am not going to introduce myself. I think you all know me. So let me talk about 4Q and I would just give a few comments, a few words on the year 2013 and I would say more words on this year.

我不想介紹我自己。我想你們都認識我。所以讓我來談談第四季度，我只想發表一些評論，就 2013 年說幾句話，然後我會就今年多說幾句話。

4Q, I think, Lora already discussed it. It's pretty much as we guided it three months ago. Our revenue was affected by the supply chain's inventory management across almost all major sectors, particularly in communication-related applications. The supply chain DOI declined from one day above seasonal in the third quarter to one day below seasonal in the fourth quarter. However, our structural profitability remained intact. The lower utilization caused by lower revenue resulted in a lower gross margin and operating profit percent than 3Q. On 2013, overall, we are pleased by the results. It was another consecutive year of record performance and as Lora pointed out, revenue grew by 18% and profit before tax grew by 19%.

4Q，我認為，Lora 已經討論過這個問題了。這與我們三個月前的指導基本一致。我們的收入幾乎受到所有主要領域的供應鏈庫存管理的影響，特別是在通訊相關的應用領域。供應鏈 DOI 從第三季的高於季節性水準一天下降到第四季的低於季節性水準一天。然而，我們的結構性獲利能力仍然完好。收入下降導致利用率降低，造成毛利率和營業利潤百分比低於第三季。對2013年來說，整體而言，我們對結果感到滿意。這是另一個連續創下紀錄的一年，正如 Lora 指出的那樣，收入增長了 18%，稅前利潤增長了 19%。

Now looking at 2014, we expect still another consecutive year of double-digit growth in revenue and I will talk a little more about profit later. 1Q is a seasonally weak quarter for IC companies, including us, and supply chain continued to manage inventory conservatively, even when the DOI has already reached below seasonal level. We expect the supply chain DOI to be two days below seasonal in 1Q -- at the end of 1Q. Our structural profitability in 1Q still remains intact. In fact, it will probably improve slightly, as you can tell from the guided profit margins.

現在回顧2014年，我們預計營收仍將連續一年達到兩位數成長，稍後我將多談利潤問題。對於包括我們在內的 IC 公司來說，第一季是一個季節性疲軟的季度，即使 DOI 已經低於季節性水平，供應鏈仍繼續保守地管理庫存。我們預計，第一季（即第一季末）的供應鏈 DOI 將比季節性低兩天。我們第一季的結構性獲利能力仍然完好。事實上，它可能會略有改善，從指導利潤率就可以看出。

For full year 2014, we forecast the following industry numbers. For worldwide semiconductor industry, we forecast 5% growth. For fabless industry, we forecast 8% growth, and for foundry industry, we forecast 10% growth. For TSMC, as I already did, we are forecasting revenue growth surpassing the growth of the foundry industry. 2014 capital budget is estimated to be between $9.5 billion and $10 billion, similar to that of last year. About 95% of the capital expenditure is for advanced technologies and we mean 20 nanometers, 16 nanometers, more 28 nanometers, R&D and our mask operation.

對於2014年全年，我們預測產業數據如下。對於全球半導體產業，我們預測成長率為 5%。對於無晶圓廠產業，我們預測成長率為 8%，對於代工產業，我們預測成長率為 10%。對於台積電，正如我已經說過的，我們預測其收入成長將超過代工產業的成長。2014年資本預算預計在95億美元至100億美元之間，與去年持平。大約 95% 的資本支出用於先進技術，即 20 奈米、16 奈米、28 奈米、研發和掩模操作。

Depreciation expense is expected to increase by about 35% year-to-year. The ratio of depreciation expense to revenue is expected to rise by a few percentage points in 2014. However, we will have a higher blended ASP by several percentage points, resulting from new technologies, principally the high-K metal gate 28 nanometer and the 20 SoC.

預計折舊費用將年增約35%。預計2014年折舊費用與收入比率將上升幾個百分點。然而，由於新技術（主要是高 K 金屬閘極 28 奈米和 20 SoC），我們的混合 ASP 將提高幾個百分點。

We also plan to have better operating efficiencies. The higher operating efficiency would include lower variable costs per wafer, higher manufacturing productivity, et cetera. Now between those two principally the higher blended average price, which results from the richer product mix, principally from that and also partly from the better operating efficiencies, we intend to offset the increase of depreciation as a percent of revenue.

我們也計劃提高營運效率。更高的營運效率包括降低每個晶圓的變動成本、提高製造生產力等等。現在，這兩者之間主要是更高的混合平均價格，這主要源於更豐富的產品組合，也部分源於更好的營運效率，我們打算抵消折舊佔收入的百分比的增長。

We believe we can maintain and perhaps even improve our structural profitability in 2014 versus last year. From second quarter on we'll see strong growth via our growth engines. In terms of market segments, mobile products, smartphones and tablets, will be the growth engine. In terms of technology, high-K metal gate 28 nanometer and 20 SoC are our growth engines.

我們相信，與去年相比，2014 年我們的結構性獲利能力能夠維持甚至提升。從第二季開始，我們將透過成長引擎看到強勁成長。從細分市場來看，行動產品、智慧型手機和平板電腦將成為成長引擎。技術方面，高K金屬閘極28奈米和20SoC是我們的成長引擎。

I will say a few words about mobile products now and C.C. will, a little later, talk about the technologies, the new technologies. Smartphones are expected to grow by 25% to 1.246 billion units and tablets are expected to grow by 21% to 307 million units. Now to be a little finer grained, the high-end smartphones are expected to grow 8% year-over-year to 325 million units, the middle end 22% year-over-year to 449 million units, the lower end 45% year-over-year to 472 million. And due to the continued performance improvements, which means multi-mode and 64 bit, et cetera and also due to feature enhancements, such as finger print, MEMS, NFC and new standards in WiFi and Bluetooth, we expect silicon content for the mobile devices to continue to rise, silicon content in the mobile devices to continue to rise.

我現在就談談行動產品和 C.C.稍後我們會討論技術，新技術。智慧型手機預計將成長 25%，達到 12.46 億台，平板電腦預計將成長 21%，達到 3.07 億台。現在更詳細地講，高階智慧型手機預計將年增 8% 至 3.25 億部，中階智慧型手機預計將年增 22% 至 4.49 億部，低階智慧型手機預計將年增 45% 至 4.72 億部。由於性能的持續改進，即多模式和 64 位元等等，也由於功能的增強，例如指紋、MEMS、NFC 和 WiFi 和藍牙的新標準，我們預計行動裝置的矽含量將繼續上升，行動裝置中的矽含量將繼續上升。

And TSMC's share in the non-memory silicon content of these devices is expected to increase from 45% last year to 47% this year. As a result, TSMC revenue from mobile products are expected to grow more than 35%. And just looking a little further ahead, further than this year, we expect to continue benefitting from the growth of mobile products in 2015 and expect to see emerging devices, such as wearables and others to join the line for the mobile products.

而台積電在這些設備中非記憶體矽片含量的份額預計將從去年的45%提升到今年的47%。因此，台積電行動產品收入預計將成長35%以上。而只要稍微展望一下今年以後的情況，我們預計 2015 年我們將繼續受益於行動產品的成長，並且有望看到穿戴式裝置等新興裝置加入行動產品線。

Now let me ask C.C. to speak to the technology aspects of our growth engine. C.C.?

現在讓我問一下 C.C。談論我們成長引擎的技術方面。C.C.？

Yes, thank you Chairman. Good afternoon everybody. I am C.C. Wei and I will give you the update of our 28-nanometer high-K metal gate version. Let me recap the history. We started 28-nanometers volume production in year 2011 mainly on the 28LP, the oxynitride version. And since then the business continued to grow. So last year, we had tripled 28-nanometers of business versus year 2012. That in this year, year 2014, the business for 28-nanometer will continue to grow at least by another 20%, and all the increase are coming from the 28-nanometers high-K metal gate version, which is we name it 28HPM.

是的，謝謝主席。大家下午好。我是C.C.我和魏先生將向大家介紹我們28奈米高K金屬閘極版本的更新情況。讓我重述一下歷史。我們於 2011 年開始 28 奈米批量生產，主要是 28LP（氧氮化物版本）。自此以後，業務持續成長。因此，去年我們的 28 奈米業務量比 2012 年成長了兩倍。今年，也就是2014年，28奈米業務將繼續成長至少20％，而所有成長都來自28奈米高K金屬閘極版本，我們稱之為28HPM。

Let me add more color to it. We expect we're going to have about more than 100 tape-outs from about 60 customers in this year in 28HPM. Now you may ask it why? Why there are so many products that were designed on this technology? One of the main reason I can give it to you is the performance, the superior performance. For example, 28 HPM compare with the 28LP that will gain another 30% of the speed at the same kind of power consumption, or you can say that at the same power consumption -- at the same speed, you will consume 15% less power. And everybody knows that the power consumption in the mobile device is very important. That's why we think we have a very high, good business on the 28 HPM.

讓我給它添加更多顏色。我們預計今年我們將從大約 60 個客戶那裡獲得超過 100 個 28HPM 的串流片。現在你可能會問為什麼？為什麼有這麼多產品採用這項技術設計？我能給你的一個主要原因是它的性能，卓越的性能。比如說28HPM跟28LP相比，在同樣的功耗下，速度可以提高30%，或者說，在同樣的功耗，同樣的速度下，可以少耗15%的電力。大家都知道，行動裝置的功耗非常重要。這就是為什麼我們認為我們在 28 HPM 上擁有非常高、良好的業務。

Now, furthermore, after the 28HPM, we also offer 28HPC, which is a low-cost version of the 28HPM. The 28HPC is developed to meet the customers' demand to compete in the mid-to-low-end smartphone market. We expect that this 28HPC will have a very strong demand in the next two years. That's what we have.

現在，此外，繼28HPM之後，我們還提供28HPC，它是28HPM的低成本版本。28HPC是為了滿足客戶在中低階智慧型手機市場競爭的需求而開發的。我們預計未來兩年內 28HPC 的需求將會非常強勁。這就是我們所擁有的。

Okay, let me give you some information on the competition to explain why we are so confident on this 28 nanometers high-K metal gate business. If you still remember that long time ago, we mentioned about gate-first and gate-last. Still remember that terminology? All right. So, simply to say that gate-last version will give you better performance and a better process control. As a result, all our customers will enjoy using the gate-last versions that technology to have a higher or better performance than other products which are designed with a different approach.

好的，我先跟大家介紹一下競爭對手的狀況，來解釋我們為什麼對這個28奈米高K金屬閘極業務如此有信心。如果您還記得，很久以前，我們提到先門（gate-first）和後門（gate-last）。還記得那個術語嗎？好的。因此，簡單地說，gate-last 版本將為您提供更好的效能和更好的流程控制。因此，我們所有的客戶都將享受採用該技術的門控後版本，以獲得比採用不同方法設計的其他產品更高或更好的性能。

In addition to that I'll say that because of the better process control and TSMC's manufacturing excellence, we have a much better yield than our competitor, so that our customer will enjoy the lower die cost. That's what we have. And that's why we explained that our confidence that the 28 nanometers business continue a very good business for us.

除此之外，我想說的是，由於更好的製程控制和台積電的製造卓越性，我們的產量比競爭對手高得多，因此我們的客戶將享受更低的晶片成本。這就是我們所擁有的。這就是為什麼我們有信心 28 奈米業務將繼續為我們帶來非常好的業務。

Now, let me switch the gear to 20-SoC. That's another exciting news that we have, I want to share with you. 20-SoC is a technology that we developed to enable TSMC's customer to lead in the mobile device market. And this technology we are believe in this year, next year, well I have a very good business to capture. So, what is the status now of the 20-SoC? We have two fab, Fab 12 and Fab 14 that complete the qual of 20-SoC. And as a matter of fact, we started production. We are in volume production as we speak right now. So, it's in the high-volume production as we are speaking right now.

現在，讓我將齒輪切換到 20-SoC。這是我們的另一個令人興奮的消息，我想與大家分享。20-SoC 是我們為幫助台積電的客戶在行動裝置市場中佔據領先地位而開發的技術。我們相信這項技術，今年、明年，我將有非常好的商機可把握。那麼，20-SoC 現在的狀態如何呢？我們有兩座晶圓廠，Fab 12 和 Fab 14，可完成 20-SoC 的品質控制。事實上，我們已經開始生產了。我們現在正在進行批量生產。所以，正如我們現在所說，它處於大批量生產中。

Let me add more information to that. First, there are more than $10 billion had been committed to build capacity. Second, we have more than 2,500 engineers and 1,500 operators right now in manufacturing, doing the 20SoC volume production. The ramping rate will be the fastest one in TSMC's history. Using the ramping rate, you can get the hint of the business, how big the business is.

讓我補充更多資訊。首先，已經承諾投入100多億美元用於產能建設。第二，我們目前有超過 2,500 名工程師和 1,500 名操作員從事製造工作，進行 20SoC 批量生產。這將是台積電史上最快的產能提升速度。透過成長率，你可以了解業務的狀況，知道業務規模有多大。

Another fact to share with you, we have probably -- at the end of this year, we have more than dozens of tape-out from about a dozen customers that they are producing the 20SoC product, okay? You may ask, good business, how about the competition? If you have a very strong competition, you might -- cannot have too much of confidence on the future. Let me talk about the competition.

另一個要與大家分享的事實是，我們可能——在今年年底，我們已從大約十幾個客戶那裡獲得了數十個流片，他們正在生產 20SoC 產品，好嗎？你可能會問，生意好，競爭怎麼樣？如果競爭對手非常強大，你可能不會對未來抱持太大的信心。先說一下比賽吧。

I'm very confident that our 20SoC is the highest gate density in volume production at 20 nanometers node. And please remember that; highest gate density and a high volume production. I don't see any company today can claim on this kind of production and with this kind of gate density at this time, nobody. And most of our competitors, to be frank with you, they're not even into this game yet. So we are confident to have a good business that will contribute to TSMC's revenue -- wafer revenue by probably around 10% this year. And with that I conclude my presentation and thank you for your attendance.

我非常有信心，我們的 20SoC 是 20 奈米節點大量生產中門密度最高的。請記住；最高的閘極密度和高產量。目前我認為沒有任何一家公司可以宣稱擁有這種產量和這種門密度，沒有人。坦白說，我們的大多數競爭對手甚至還沒有參與這場遊戲。因此，我們有信心，這項良好的業務將為台積電的收入貢獻——今年晶圓收入大概會增加 10% 左右。我的演講到此結束，感謝大家的出席。

Thank you C.C. Now looking into next year now, 2015, and perhaps even 2016, I think next year this time I will be telling you that our growth engine in technology next year, a year from now is going to be 16-FinFET. Now, recently Intel published some data, which showed our 16 FinFET technology to be behind. We think that the data is highly misleading. So I now would ask Mark Liu to speak to TSMC's competitiveness versus Intel and Samsung.

謝謝你，C.C。現在展望明年，2015 年，甚至可能是 2016 年，我想明年這個時候我會告訴你們，明年，一年後我們的技術成長引擎將是 16-FinFET。現在，英特爾最近發布了一些數據，顯示我們的 16 FinFET 技術落後了。我們認為這些數據具有很強的誤導性。因此，我現在想請劉德華談談台積電與英特爾和三星的競爭力。

Good afternoon, ladies and gentlemen. I will start this topic by update you our recent development status of our 16-FinFET technology. 16-FinFET technology has been a very fast paced development work in TSMC and we have achieved the risk production milestone of 16-FinFET in November 2013, November last year. And this month, we should pass the 1,000 hours so-called the technology qualification. So the technology is ready for customer product tape-out.

女士們、先生們，午安。我將從我們 16-FinFET 技術的最新開發狀況開始這個主題。16-FinFET 技術在台積電的開發過程非常快，我們在 2013 年 11 月、去年 11 月就實現了 16-FinFET 的風險生產里程碑。這個月，我們要通過1000小時的所謂的技術資格認證。因此該技術已準備好用於客戶產品的流片。

Our 16-FinFET yield improvement has been ahead of our plan. This is because we have been leveraging the yield learning of 20SoC. Currently 16-FinFET SRAM yield is already close to 20SoC. And with this status we are developing an enhanced transistor version of 16-FinFET plus, with 15% performance improvement. It will be the highest performance technology among all available 16 and 14 nanometer technology in 2014. The above progress status is well ahead of Samsung.

我們的 16-FinFET 產量提升已經超出了我們的計劃。這是因為我們一直在利用 20SoC 的產量來學習。目前16-FinFET SRAM的良率已經接近20SoC。並且利用這一現狀我們正在開發 16-FinFET plus 的增強晶體管版本，性能提升 15%。它將成為2014年所有可用的16奈米和14奈米技術中性能最高的技術。以上進展狀況遙遙領先三星。

Let me comment on the Intel's recent graph shown in their investor meetings, showing on the screen. We usually do not comment on other company's' technology, but this is -- because this has been talking about TSMC technology and as Chairman said, has been misleading. To me it's erroneous, based on outdated data. So I like to make the following rebuttal.

讓我對英特爾在其投資者會議上顯示在螢幕上的最新圖表進行評論。我們通常不會對其他公司的技術發表評論，但這是——因為這一直在談論台積電的技術，正如董事長所說，具有誤導性。對我來說，這是錯誤的，因為它是基於過時的數據。因此我想提出以下反駁。

On this view graph, the vertical axis is the chip area on a log scale. Basically this is compared at chip area reduction. On the horizontal axis, it shows four different technologies; 32/28, 22/20, 14/16-FinFET and 10-nanometer. 32 is Intel technology and 28 is TSMC technology. So is the following three nodes; the smaller number 20, but on 14-FinFET is Intel, 16-FinFET is the TSMC. On the view graph shown at Intel investor meeting, it is with the grey plots showing here. The grey plots shows the 32 and 20 nanometer, TSMC is ahead of the area scaling, but however, with 16, the data, grey data shows a little bit uptick. And following the same slope, go down to the 10 nanometer. What's the correct data we show on the red line, that's our current TSMC data. The 16, we have been volume production on 20 nanometer, as C.C. just mentioned, this is the highest density technology in production today.

在該視圖上，縱軸是以對數刻度表示的晶片面積。基本上這是與晶片面積減少相比的。橫軸上展示了四種不同的技術； 32/28、22/20、14/16-FinFET 和 10 奈米。32是英特爾技術，28是台積電技術。以下三個節點也是如此；數字20較小，但14-FinFET上是英特爾，16-FinFET上是台積電。在英特爾投資者會議上展示的視圖上，它與這裡顯示的灰色圖一致。灰色圖顯示，在32和20奈米製程中，台積電在面積縮小方面處於領先地位，但是，在16奈米製程的數據中，灰色數據顯示略有上升。並按照同樣的斜率下降到 10 奈米。我們在紅線上顯示的正確數據是什麼，那就是我們目前的台積電數據。16、我們已經在20奈米上進行量產，就像C.C.剛才也提到了，這是目前生產中密度最高的技術。

We took the approach of significantly using the FinFET transistor to improve the transistor performance on top of the similar back-end technology of our 20 nanometer. Therefore, we leveraged the volume experience into volume production this year, to be able to immediately go down to 16 volume production next year, within one year. And this transistor performance and innovative layout methodology can improve the chip size by about 15%. This is because the driving of the transistor is much stronger, so that you don't need such a big area to deliver the same driving circuitries.

我們採取了在類似20奈米後端技術的基礎上大幅使用FinFET電晶體的方法來提高電晶體的性能。所以，我們把今年的量產經驗運用到量產中，能夠在明年，一年之內，立即下降到16個量產。而這種電晶體性能和創新的佈局方法可以將晶片尺寸提高約15％。這是因為電晶體的驅動能力更強，因此不需要那麼大的區域來提供相同的驅動電路。

And for the 10 nanometer, we haven't announced it, but we did communicate with many of our customers that that will be the aggressive scaling of technology we're doing. And so, in the summary, our 10 FinFET technology will be qualified by the end of 2015. 10 FinFET transistor will be our third generation FinFET transistor. This technology will come with industry's leading performance and density. So, I want to leave this slide by 16 FinFET scaling is much better than Intel said, but still a little bit behind Intel.

對於 10 奈米，我們還沒有宣布，但我們確實與許多客戶溝通過，這將是我們正在進行的積極技術擴展。因此，總而言之，我們的 10 FinFET 技術將在 2015 年底獲得認證。10 FinFET 電晶體將是我們第三代 FinFET 電晶體。該技術將具有業界領先的性能和密度。因此，我想這張投影片中的 16 FinFET 縮放比例比英特爾所說的要好得多，但仍然落後於英特爾一點。

However, the real competition is between our customer's product and Intel's product or Samsung's product. TSMC's Grand Alliance; that is the alliance of us, our customers, EDA, IP, communities and our supplier is the largest and the only open technology platform for the widest range of product innovations in the industry today. As for the tape-out of our 16 FinFET, more than 20 customer product tape-outs on 16 FinFET technology is scheduled this year already. They include wide range of applications; baseband, application processors, application processor SoCs, graphics, networking, hard disk drive, field programmable array, CPUs and servers. Our 16 FinFET technology captured the vast portion of products in the semiconductor industry.

然而，真正的競爭是我們客戶的產品與英特爾的產品或三星的產品之間的。台積電大聯盟；這是我們、我們的客戶、EDA、IP、社群和我們的供應商的聯盟，是當今業界最大的、也是唯一的、用於最廣泛產品創新的開放技術平台。至於我們的 16 FinFET 的流片，今年已經計劃有超過 20 個基於 16 FinFET 技術的客戶產品流片。它們包括廣泛的應用；基頻、應用處理器、應用處理器 SoC、圖形、網路、硬碟、現場可程式陣列、CPU 和伺服器。我們的16 FinFET技術佔據了半導體產業絕大部分的產品。

We've been actively working with our customer's designer on this since last year. TSMC's speed and productization of the customer's product and our ability to execute for a short time-to-market for a customer are far superior than Intel and Samsung.

自去年以來，我們一直積極與客戶的設計師合作。台積電對客戶產品的產品化速度和我們為客戶快速上市的執行能力遠遠優於英特爾和三星。

Lastly, I would comment on the mobile products. With this 16 FinFET technology and the innovations of processor architecture and various IP from our customers, we are confident that this planned, 16 FinFET mobile product, which is going to tape out to us, will be better than Samsung's 14 nanometer and better than Intel's 14 SoC. Thank you very much.

最後，我想評論一下行動產品。憑藉這項 16 FinFET 技術以及來自客戶的處理器架構和各種 IP 的創新，我們相信，這款計劃中的、即將流片給我們的 16 FinFET 行動產品將比三星的 14 奈米和英特爾的 14 SoC 更好。非常感謝。

Thank you, Mark. Summary; in summary, I want to say the following. First, in 2014, we expect double-digit revenue growth and we expect to maintain or slightly improve our structural profitability. As a result, we expect our profit growth to be close to our revenue growth.

謝謝你，馬克。概括;綜上所述，我想說以下幾點。首先，2014年我們預計收入將達到兩位數成長，我們預計結構性獲利能力將維持或略有提高。因此，我們預計利潤成長將接近收入成長。

In 2014, the market segment that most strongly fuels our growth is the smartphone and tablet-mobile segment. The technologies that fuel our growth are the 20 SoC and the 28 high-k metal gate, in both of which we have strong market share. In 2015, our strong technology growth will be 16 FinFET. We believe our Grand Alliance will out-compete both Intel and Samsung, out-compete. Thank you very much

2014年，對我們成長動力最強的細分市場是智慧型手機和平板電腦行動市場。推動我們成長的技術是 20 SoC 和 28 高 k 金屬閘極，我們在這兩項技術上都佔有強大的市場份額。2015年，我們強勁的技術成長將是16 FinFET。我們相信，我們的大聯盟將會戰勝英特爾和三星。非常感謝

(Operator Instructions) Roland Shu, Citi Securities.

(操作員指示) 花旗證券的 Roland Shu。

Happy New Year, Chairman, Dr. Liu, Dr. Wei and Lora, and very happy to see Chairman to host the analyst meeting today. My first question is on the 16-nanometer FinFET and thanks for Dr. Liu explaining in detail for your technology strength on the 16-nanometer FinFET. However, [your] competitor last year talking about your 14-nanometer versus 16-nanometer and now we have 16-plus, so my question is on your -- well, is the 16-plus is improving from the design you were saying or this is just for the performance enhancement or are we going to consider to change our 16-plus to -- even to the -- same as the 14-nanometer? That is my question for Chairman. Thank you.

新年快樂，董事長、劉博士、魏博士和 Lora，很高興今天看到董事長主持分析師會議。我第一個問題是關於16奈米FinFET的，感謝劉博士詳細講解你們在16奈米FinFET上的技術實力。然而，去年您的競爭對手在談論 14 奈米與 16 奈米的比較，而現在我們又有了 16 奈米以上工藝，所以我的問題是：16 奈米以上工藝是否比您之前所說的設計有所改進，還是僅僅為了提高性能，或者我們是否要考慮將 16 奈米以上工藝改為與 14 奈米製程相同？這是我要問主席的問題。謝謝。

Mark, would you answer that? You don't mind if Mark answers would you?

馬克，你能回答這個問題嗎？您不介意馬克回答吧？

16 FinFET-plus is a transistor enhancement. For the design -- back-end design rule are similar to 16 FinFET, therefore designer can design on 16 FinFET and re-characterize, upgrade their product performance. This transistor, as I mentioned, also can reduce the cell size, standard cell size, and with the enhanced performance transistor. That's the way to reduce the chip size. So we do not intend to change the naming. I mean this is engineering, this is the word -- this is the name that we chose earlier based on the physical consistent number and we do not intend to change name.

16 FinFET-plus 是一種電晶體增強技術。對於設計－後端設計規則與16 FinFET類似，因此設計人員可以在16 FinFET上進行設計並重新表徵，升級其產品性能。正如我所提到的，這種電晶體還可以縮小單元尺寸、標準單元尺寸，並增強電晶體的性能。這就是縮小晶片尺寸的方法。因此我們不打算改變命名。我的意思是這是工程，這是這個詞——這是我們之前根據物理一致數選擇的名稱，我們不打算更改名稱。

Okay, thank you. So 16-plus or 16 actually is same design. What is the 20 and -- with the better or at least a similar performance as the 20 nanometer? So this is for you, [Wei].

好的，謝謝。因此 16-plus 或 16 實際上是相同的設計。那麼 20 奈米是什麼——其性能是否比 20 奈米更好或至少是相似的呢？所以這是給你的，[魏]。

The question again.

再次提問。

I mean -- actually very happy to hear you are so confident about your 16 and 16-plus [FinFET]. My second question actually is for Lora, actually for the cash dividend. So since with have every good bottom line last year and this year and also with the improving free cash flow, so the question is on your -- under what kind of criteria TSMC is considering to increase cash dividend? Thank you.

我的意思是——實際上我非常高興聽到您對 16 和 16-plus [FinFET] 如此有信心。我的第二個問題其實是針對 Lora 的，關於現金股利。那麼，由於去年和今年的獲利情況都很好，而且自由現金流也在不斷改善，那麼問題來了——台積電在什麼樣的條件下考慮增加現金股息？謝謝。

If you look at free cash flow, when the free cash flow sufficiently cover our current TWD3 per share dividend level, that is the time we will seriously consider to increase cash dividend.

如果你看看自由現金流，當自由現金流足以覆蓋我們目前每股 3 新台幣的股息水準時，我們就會認真考慮增加現金股息。

So, in my model actually my estimate this year 2014, free cash flow probably will reach about [$3.5, $3.6] per share. So, whether this is the only one of consideration for the free cash flow to -- above [TWD3] then you would increase the cash dividend?

因此，在我的模型中，我實際上估計 2014 年的自由現金流可能將達到每股約 3.5 美元、3.6 美元。那麼，這是否是考慮自由現金流的唯一因素——超過 [TWD3] 那麼您會增加現金股利嗎？

That's the major element. I will not comment on your model. Other than the free cash flow consideration, another thing is that we look at capital intensity. Our capital intensity in the past four, five years has been very close to 50%. That number will come down this year, 2014. It will even come down further in 2015. So, that add another element for us to seriously consider cash dividend increase.

這是主要因素。我不會對你的模型發表評論。除了考慮自由現金流之外，我們還要考慮資本密集度。我們的資本密集度在過去四、五年一直接近50%。今年（2014年）這個數字將會下降。2015年還將進一步下降。因此，這為我們認真考慮增加現金股利增加了另一個因素。

Okay, thank you.

好的，謝謝。

I guess he is asking when we will raise the cash dividend. I don't think it matters to say that certainly 2014 is perhaps the first time, 2014, dividend payable in 2015. I think this is not out of the question, okay?

我猜他問的是什麼時候我們會增加現金股利。我認為，2014 年可能是第一次在 2015 年支付股息，這一點並不重要。我認為這不是不可能的，好嗎？

Dan Heyler, Bank of America Merrill Lynch.

美銀美林的 Dan Heyler。

Thanks. I came with a lot of questions, but you answered a lot of them earlier on. I've got two, but I first want to congratulate Dr. Chang and your team as well for achieving your three to five-year target, turning around technology, turning around growth in the Company. It's been remarkable to see. Also, congratulations on handing off the transition here to the management team.

謝謝。我帶著很多問題來，但您早就回答了我其中的許多問題。我有兩個，但我首先要祝賀張博士和你的團隊實現了你們的三到五年目標，扭轉了技術，扭轉了公司的成長。這真是令人驚奇的一件事。此外，恭喜您將移交工作移交給管理團隊。

I've got two questions. First, I guess, as we look at, maybe perhaps for C.C. Wei on the technology side, as we look at EUV, do you agree that mostly likely implementation of EUV appears to be for foundry number one over kind of the one to two layers at 10 nanometer and that you can kind of achieve X number wafers per hour to hit a rollout of that technology. What exactly wafers power do you need and what time will you achieve those?

我有兩個問題。首先，我想，正如我們所看到的，也許對於 C.C. 來說。從技術方面來說，當我們看 EUV 時，您是否同意 EUV 最有可能的實現似乎是針對 10 奈米的一到兩層晶圓代工廠，並且您可以實現每小時 X 個晶圓的產量以推出該技術。您到底需要什麼樣的晶圓功率？什麼時候能夠實現這些功率？

Mark, will you answer that please? I think he is asking whether we are considering using EUV in tandem with maybe one or two layers, that's the question, right?

馬克，你能回答這個問題嗎？我認為他在問我們是否考慮將 EUV 與一層或兩層結合使用，這就是問題所在，對嗎？

The current process of records, our current execution plan is -- on 10 nanometer do not have EUV, it's all in immersion layers. However, we have been working with ASML very closely and we set a target for their EUVs' throughputs. And together we have the ambition to improve the 10-nanometer cost, if the EUV development in ASML can reach our target, the target we gave them. And this two party has been working very closely. So, EUV is a cost-reduction opportunity for us on 10 nanometer.

目前的記錄過程、我們目前的執行計畫是－10奈米上沒有EUV，全部採用浸沒層。然而，我們一直與 ASML 密切合作，並為他們的 EUV 產量設定了目標。如果 ASML 的 EUV 開發能夠達到我們設定的目標，那麼我們就有共同的目標來改善 10 奈米的成本。雙方一直保持著密切的合作。因此，EUV 為我們在 10 奈米製程上降低成本提供了一個機會。

Okay, and a quick follow-up on that, if we were to draw that curve that you put up earlier, would that look fairly linear, based on our current models, on your cost curve previously that you had showed?

好的，快速跟進一下，如果我們繪製您之前提出的曲線，根據我們目前的模型，在您之前展示的成本曲線上，它看起來是否相當線性？

That curve is without EUV.

此曲線不含 EUV。

Exactly, without -- with the EUV and we imagined a dotted line, do we go through it with a bit of penalty there and then we are back on trend or do you think --?

確實，沒有——有了 EUV，我們想像一條虛線，我們是否要經過一點懲罰，然後我們才能回到趨勢上，或者你認為——？

It's the same. With EUV, our design will be the same. We're not going to be waiting for that -- wait for that. Design will be same.

是一樣的。有了 EUV，我們的設計將會保持不變。我們不會等待那個——等待那個。設計將會相同。

We're looking at EUV just as a cost reduction.

我們僅僅將 EUV 視為一種成本降低手段。

Yes, cost reduction opportunities.

是的，降低成本的機會。

Excellent. Thank you very much. And then I was going to ask you, you previously on managing these swings in utilization that we've seen over the last couple of years, you're addressing that through production during these cycles. Are there other things that you can do going forward to smooth out these big swings in utilization? And I guess part of the answer I'd like to know what you think industry dynamics will be on these swings. I mean how should we think, is it pretty much business as usual from an order standpoint the last three years or could we see the orders smooth? Thank you.

出色的。非常感謝。然後我要問您，您之前在管理我們在過去幾年中看到的利用率波動方面，您是透過在這些週期內生產來解決這個問題的。您還可以採取其他措施來平滑利用率的這些大幅波動嗎？我想部分答案是我想知道您認為在這些波動中行業動態會是怎樣的。我的意思是，我們應該如何看待，從過去三年的訂單角度來看，業務是否一切如常，或者我們是否可以看到訂單平穩？謝謝。

I think that Lora just explained what we have started to do, which is really what the IDMs do all the time, that is they build some inventory when the utilization is slower, they build some inventory and that's what we are doing too. Of course, in our case we have to bet right. But I do believe that we have organized ourselves. We actually -- I wanted to start doing it as early as August of last year, because even at that time we saw that the fourth quarter and the first quarter will be rather slow and -- well, but we had to organize. Organization, I mean, people have to do better, if not their job, but their bonus is on the line. This inventory we are building will not be written off. And also we have decided how much reserve we should take, et cetera, et cetera.

我認為 Lora 剛剛解釋了我們已經開始做的事情，這實際上也是 IDM 一直在做的事情，即當利用率較低時他們會建立一些庫存，他們建立一些庫存，這也是我們正在做的事情。當然，就我們的情況而言，我們必須押對賭注。但我相信我們已經組織起來了。實際上，我早在去年 8 月就想開始這樣做，因為即使在那個時候，我們也看到第四季度和第一季的成長將會相當緩慢，但我們必須組織起來。組織，我的意思是，人們必須做得更好，即使不是他們的工作，但他們的獎金也岌岌可危。我們正在建立的庫存不會被註銷。而且我們還決定了應該保留多少儲備，等等。

So now we didn't get completely organized. We didn't get -- we really didn't get going until sometime in the -- around the middle of fourth quarter. So the effect of inventory building on the fourth quarter was minimal. Now, in the first quarter, as Lora has already pointed out, it does have an effect. I think you said 2 or 3 percentage points of gross margin.

所以現在我們還沒有完全組織起來。我們沒有──直到第四節中段左右我們才真正開始行動。因此庫存增加對第四季的影響微乎其微。現在，在第一季度，正如 Lora 已經指出的那樣，它確實產生了影響。我認為你說的是2或3個百分點的毛利率。

And is at 2 percentage points to 3 percentage points something that you're modeling kind of through the course of the year or is that in a single quarter?

2 個百分點到 3 個百分點的成長率是您全年模擬的嗎，還是在一個季度內模擬的？

I don't think it's possible.

我認為這是不可能的。

Or through the course of the cycle or is that just one quarter?

還是在整個週期內，或僅僅一個季度？

Yes. I don't think you can model it for the whole year, because we have to look at lower season and up season. They are meant to be done in the lower season. So only in the low quarters we will start to build some inventory.

是的。我認為你無法對全年進行建模，因為我們必須考慮淡季和旺季。這些活動應該在淡季進行。因此，只有在低迷時期我們才會開始建立一些庫存。

I misspoke there. I kind of meant through the cycle. Is that kind of your expectations for -- as you go through the cycle? At the trough -- each of the troughs, could we kind of see this as something you can repeat on the next correction, a couple of percentage points?

我那兒說錯了。我指的是透過整個循環。當您經歷這個週期時，這就是您的期望嗎？在低谷中－每一個低谷，我們是否可以將其視為可以在下一次修正中重複出現的現象，幾個百分點？

The answer is no, but it's -- when we see that we need to use it, we'll do it.

答案是否定的，但是當我們發現需要使用它時，我們就會使用它。

Thank you very much.

非常感謝。

We don't model it way in advance, okay?

我們不會提前建模，好嗎？

And is there anything else you can do to affect this -- the volatility and improvement in margins? Are there other things in the tool box there?

您還可以做什麼來影響這一點——利潤率的波動和改善？工具箱裡還有其他東西嗎？

Yes. We -- for instance, we very carefully control the capacity we build.

是的。例如，我們非常謹慎地控制我們所建立的能力。

All right, we will now take our next question from the call. Operator, please proceed with the first caller on the line.

好的，我們現在將回答電話中的下一個問題。接線員，請繼續接聽線路上的第一位來電者。

Randy Abrams, Credit Suisse.

瑞士信貸的蘭迪·艾布拉姆斯 (Randy Abrams)。

Thank you. My first question on the management structure now with the Co-COOs promoted to Co-CEOs. If you could talk about how the responsibilities would change with their promotion to Co-CEO? And for yourself, Dr. Chairman, how will your activities change versus before this move? So if you could talk about the roles for each of the different Co-CEOs and yourself now.

謝謝。我的第一個問題是關於現在的管理結構，聯席首席營運長已晉升為聯合執行長。您能否談談他們晉升為聯席執行長後職責會發生怎樣的變化？主席博士，您自己認為與此舉措之前相比，您的活動將發生哪些變化？那麼，您現在可以談談每位聯合執行長和您自己所承擔的角色嗎？

Yes. We started with President and the Co-CEO in November, and it has been now two months. And if you ask me now, has my life changed in the last two months? My answer is no. It has not changed. But I think that my effort, my time has been spent more on the coaching aspects. I think that -- I do believe that I do more coaching. If I spend 100 hours and -- I now perhaps spend 20 hours of the 100 hours on coaching, whereas in the past, I'd probably spend only 5 or 10 hours of the 100 hours on coaching.

是的。我們從去年 11 月開始擔任總裁兼聯席首席執行官，到現在已經兩個月了。如果你現在問我，過去兩個月我的生活在改變嗎？我的答案是「不」。它沒有改變。但我認為我的精力和時間更多地花在了執教方面。我認為——我確實相信我做了更多的指導。如果我花 100 個小時——我現在可能會花其中的 20 個小時進行指導，而過去，我可能只會花其中的 5 或 10 個小時進行指導。

Now, actually, this is an overseas call, is this correct? Yes. So let me just explain very briefly what the Taiwan law and customs are in relation to a Chairman's authority and responsibility. Basically, by both law and custom, the Chairman of a company has the ultimate authority and responsibility, basically. However, he may delegate his authority and responsibility to the President. He may also take it back anytime. He can delegate any and all, any or all of the responsibilities to the President. And now these two gentlemen, their titles is President and co-CEO. President comes first. They are, in a very legal sense, Presidents. Now the co-CEO is basically a Western term. And then in the United States, a CEO usually bears the final ultimate responsibility and authority as a Chairman in Taiwan does. In the US, it's the CEO.

那麼，實際上，這是一個海外電話，對嗎？是的。因此，讓我簡單解釋一下台灣法律和習俗有關主席的權力和責任的規定。基本上，根據法律和慣例，公司董事長擁有最終的權力和責任。但他可以將自己的權力和責任委託給總統。他也可以隨時將其收回。他可以將部分或全部職責委託給總統。現在這兩位先生，他們的頭銜是總裁和聯合執行長。總統第一。從法律意義上來說，他們就是總統。現在「聯合執行長」基本上是一個西方術語。而在美國，執行長通常承擔最終的責任和權力，就像台灣的董事長一樣。在美國，這個角色是執行長。

Now -- so my role in the future is really to convert these two gentlemen from the Taiwan sense President to the US sense CEO, and it will be a gradual process. I don't know whether -- do you think I've explained this clearly, yes? Everybody here --

現在——我未來的角色實際上是將這兩位先生從台灣的總統轉變為美國的首席執行官，這將是一個漸進的過程。我不知道——你認為我已經解釋清楚了，是嗎？在座的各位——

Randy, do you think Chairman has explained your questions clearly?

蘭迪，您認為主席已經清楚地解釋過您的問題了嗎？

Yes, that was clear. And I could ask a second question. With respect to the last conference, you did talk about the battle raging on 16-nanometer in 2015, and I want, I guess, an update on how -- given the technology progress you've made, how you're looking at 2015 with those battles playing out and your thoughts on your market share position. And also, if you see any challenge, whether it's market share or pricing with two new -- with Samsung and Intel both more aggressively doing foundries?

是的，很清楚。我可以問第二個問題。關於上次會議，您確實談到了 2015 年 16 奈米領域的激烈競爭，我想，考慮到您在技術上取得的進步，您如何看待 2015 年的競爭形勢，以及您對英特爾市場份額地位的看法。另外，您是否看到任何挑戰，無論是市場份額還是定價，三星和英特爾都在更積極地開展代工業務？

Did you get the question? I thinks it's about 16 --

你明白這個問題了嗎？我認為大約是 16——

16-nanometer battle in 2015.

2015年的16奈米之戰。

Right now, we may intend to maintain our position in the foundry business on 16-FinFET as we did on the 28. As I mentioned, our 16-FinFET, we have over 20 tape-out already working with our customer. And it -- of course, these products will be competing with Intel's products in 2015. And that is that we are so closely working with our customers. Together, the technology is ready to tape out. We need to work with our customer closely, so that their design and the time-to-market can be catched as early as possible for their 2015 ramp.

目前，我們可能打算在 16-FinFET 代工業務中保持我們的領先地位，就像我們在 28-FinFET 代工業務中所做的那樣。正如我所提到的，對於我們的 16-FinFET，我們已經與客戶合作了 20 多個串流片。當然，這些產品將在 2015 年與英特爾的產品競爭。那就是我們與客戶密切合作。目前，該技術已做好流片準備。我們需要與客戶密切合作，以便他們的設計和上市時間可以儘早趕上 2015 年的步伐。

Well, we live on technology. Just as Intel thinks or says that they do, we do that too. So, it's extremely important for us that on 16-FinFET we need to provide good-enough technology, so that the Grand Alliance of customers, of key equipment vendors, the EVAs, ARM and third-party IP developers, all those are in the Grand Alliance. We need to -- our role is to provide good technology, so that the Grand Alliance together can outcompete Intel and Samsung. And we feel fairly confident that we'll do that. So if you talk about our market share, we feel that we'll win a pretty big share of the market. I don't know how much yet, but I think that they'll be pretty big.

嗯，我們靠科技生存。正如英特爾所想或所說，我們也會這麼做。因此，對我們來說，極其重要的是，我們需要在 16-FinFET 上提供足夠好的技術，以便客戶、關鍵設備供應商、EVA、ARM 和第三方 IP 開發人員的大聯盟能夠加入。我們需要——我們的角色是提供良好的技術，以便大聯盟能夠共同擊敗英特爾和三星。我們非常有信心我們能做到這一點。因此，如果談論我們的市場份額，我們認為我們將贏得相當大的市場份額。我還不知道它們有多大，但我認為它們會相當大。

Michael Chou, Deutsche Bank.

德意志銀行的 Michael Chou。

Actually, it's a follow-up question on 16-nanometer, because you mentioned you should take the lead in 16-nanometer FinFET. Regarding the competition, what's your [pockets of efficiency] versus the [other's] 14-nanometer FinFET? Would you be still the leader in [power function efficiency] versus competitors' 14-nanometer FinFET mobile devices in 2015?

實際上，這是關於 16 奈米的後續問題，因為您提到您應該在 16 奈米 FinFET 領域佔據領先地位。就競爭而言，你們的 14 奈米 FinFET 與其他​​公司的 14 奈米 FinFET 相比，效率如何？與 2015 年競爭對手的 14 奈米 FinFET 行動裝置相比，你們在 [功率函數效率] 方面是否仍處於領先地位？

In the transistor design, the speed and power is convertible. So from our intelligence, our 16-FinFET plus technology with 15% improvement on top of 16-FinFET is about the same as Intel's transistors. So that is what we are targeting at and customer can convert that speed to power consumption.

在電晶體設計中，速度和功率是可以轉換的。所以從我們的情報來看，我們的16-FinFET plus技術在16-FinFET基礎上有15%的改進，與英特爾的電晶體差不多。這就是我們的目標，客戶可以將速度轉換為功耗。

Second question is, could you update your sales proportion expectation for 20 nanometer this year? Will you try for high-single digit sales on 20-nanometer?

第二個問題，您能否更新一下今年20奈米的銷售比例預期？您會嘗試在 20 奈米製程上實現高個位數的銷售額嗎？

I thought I already said around 10% wafer revenue --

我以為我已經說過晶圓收入的 10% 左右——

For the year.

今年。

For the year, yes.

就今年而言，是的。

And so by the fourth quarter, it will be much higher, yes.

因此到第四季度，這個數字將會高得多，是的。

How about the fourth quarter this year?

今年第四季的情況怎麼樣？

Negligible.

微不足道。

Q4, this year?

Q4，今年呢？

Q4 this year is very high.

今年第四季非常高。

Q4, 2014 will be very high. That's what I said earlier. Q4 last year was negligible.

2014 年第四季將會非常高。我之前就是這麼說的。去年第四季微不足道。

With 10% for the total year of wafer revenue, we expect fourth quarter alone 20 nanometer will contribute more than 20% of our wafer revenue.

由於全年晶圓收入佔 10%，我們預計僅第四季 20 奈米晶圓收入就將貢獻 20% 以上的晶圓收入。

Thank you.

謝謝。

Andrew Lu, Barclays.

巴克萊銀行的 Andrew Lu。

(Foreign language). I have two questions here. First one is regarding the capacity design for 20- and 16-nanometer FinFET. Certainly, as you indicate, we are able prepare 60k per month for 20 and 16k per month for 16-nanometer FinFET. And are we expecting -- and the last time, I remember Dr. Chang mentioned the 16-nanometer FinFET, the capacities were quite similar, 90% switchable. So can we (multiple speakers) next year, [in the CapEx] number are they even low in the industry?

（外語）。我有兩個問題。第一個是關於20奈米和16奈米FinFET的容量設計。當然，正如您所說，我們每月能夠準備 20 奈米 FinFET 60k 和 16 奈米 FinFET 16k。我們是否期待——上次，我記得張博士提到了 16 奈米 FinFET，容量非常相似，可切換率為 90%。所以我們（多位發言者）明年，[在資本支出] 數字在產業中是否較低？

No, I don't want to say that. We believe we may capture even more market share than we now think we will and if that happens, we'll spend money. Now -- but you're right about the 20 to 16 capacity being a -- or 20 capacity being quickly convertible to 16 at a loss that is a lot less than the 10% that you implied, a lot less. Well, you said the 20 -- you said 90%, I think. Yes. So I'm saying it's more than 90%.

不，我不想這麼說。我們相信，我們可能會佔領比現在預想的更多的市場份額，如果發生這種情況，我們就會投入資金。現在 — — 但您說得對，20 到 16 的容量是 — — 或者 20 的容量可以快速轉換為 16，而損失比您暗示的 10% 要少得多，少得多。嗯，你說的是 20 — — 我想你說的是 90%。是的。所以我說這個比例超過 90%。

Switchable?

可切換嗎？

Switchable.

可切換。

So we might see a kind of different case. [The trends] are subject to change on customer demand. We might see that next year in 16-nanometer FinFETs quite that, we might now see [50%-50%, 40 or 60], we might see a quite different (multiple speakers).

因此我們可能會看到一種不同的情況。[趨勢]會根據客戶需求而改變。我們可能會在明年看到 16 奈米 FinFET，我們現在可能會看到 [50%-50%，40 或 60]，我們可能會看到完全不同的（多位發言人）。

No. We are not -- by the way, we are not building 60,000 per month capacity of 20 and then 60,000 per month capacity of 16. They are not additive, okay.

不。順便說一句，我們不會先建造每月 6 萬台的 20 號產能，然後再建造每月 6 萬台的 16 號產能。它們不是添加劑，好吧。

It's kind of a floating change based on the customer demand.

這是一種根據客戶需求而做出的浮動變化。

I think it flows one way, from 20 to 16. It will not flow the other way.

我認為它是單向流動的，從 20 到 16。它不會流向其他方向。

My second question is, since the 14- and 16-nanometer FinFET argument among these top three players so much, why we choose 16-FinFET in the first place? I think it's (multiple speakers) back to two, three years back.

我的第二個問題是，既然這三家公司對 14 奈米和 16 奈米 FinFET 的爭論如此激烈，為什麼我們一開始就選擇 16 奈米 FinFET？我認為（多位發言者）可以追溯到兩三年前。

Well, the best laid plan by man is sometimes undone by God, okay? So let me tell you the story, or rather it's not God. It's customers, okay. We actually first got committed to the 20. We got committed and then suddenly we realized that there was a need for FinFET, for a faster FinFET. This when one of the gorillas in the business announced that they were going to do FinFET. Now if we hadn't committed it already to 20, we might have skipped 20. I think we would have skipped 20. But we were committed already. So that was a good thing, getting committed. The customer was committed too. That was a good thing. That's why we've gained a great deal I think on the 20. But we had to hasten up to do the 16 now. And I think the key, the team in TSMC, the R&D team, they did a tremendous job and now getting the 16 to where it is now. That's a brief history. Did I answer your question? Well, okay, not exactly. So what was your question exactly?

嗯，人類所製定的最佳計畫有時也會被上帝所破壞，好嗎？所以讓我告訴你這個故事，或者更確切地說，這不是上帝。這是顧客，好的。實際上，我們首先承諾的是 20。我們下定了決心，然後突然意識到需要 FinFET，需要更快的 FinFET。就在此時，業內的一家巨頭宣布他們將要做 FinFET。現在，如果我們沒有將其承諾為 20，我們可能會跳過 20。我認為我們本應跳過 20。但我們已經做出承諾。因此，做出承諾是件好事。顧客也十分承諾。這是一件好事。我認為這就是為什麼我們在 20 號上收穫豐富。但是我們現在必須加快速度來完成16個。我認為關鍵在於台積電的團隊、研發團隊，他們做了出色的工作，才讓 16 達到了現在的水平。這就是一段簡短的歷史。我回答你的問題了嗎？嗯，好吧，不完全是。那你的問題到底是什麼呢？

Okay, let me ask it in another way. When you, in fact, three years ago, when you considered 20 and 16 investment, do you consider switchable as an important part?

好的，讓我換個方式問。當你實際上三年前，當你考慮20和16的投資時，你是否認為可轉換是一個重要的部分？

Yes, always. We now, for instance, when we considered 10-nanometer, we considered the 16 to 10 switchability. And you keep saying switchability. Actually, it's just convertibility, one-way convertibility. I don't see it being converted back. Yes, that is an important factor when we consider those things.

是的，一直都是如此。例如，現在當我們考慮 10 奈米時，我們考慮了 16 到 10 的可切換性。你一直在說可切換性。實際上，它只是可轉換性，單向可轉換性。我沒有看到它被轉換回來。是的，當我們考慮這些事情時，這是一個重要因素。

So if we want to know the answer, if we invest on 14 instead of 16, what's the equivalent term used for 14-nanometer versus the -- or 16 (multiple speakers)?

因此，如果我們想知道答案，如果我們投資 14 而不是 16，那麼 14 奈米與 16 奈米（多個揚聲器）相比的等效術語是什麼？

If we invest in 14 -- we are not investing in 14. I'm sorry, did I misunderstand you? You said if we invest in 14?

如果我們投資 14 — — 我們就不會投資 14。抱歉，我誤會你了嗎？你說如果我們投資14呢？

No, if 20 into 16, 20 and 14, what percentage (multiple speakers) 20 nanometer can be used in 14 nanometer?

不，如果將 20 分為 16、20 和 14，那麼 14 奈米中可以使用 20 奈米的百分比（多個發言人）是多少？

My goodness. Earlier decision was not 20 and 14. Earlier decision was 20 and 16. And the reason here was, well, actually, there's -- I mean, 16 and 14 is the same, what the heck.

我的天啊。先前的判決並非是20比14。先前的決定是20比16。而這裡的原因是，嗯，實際上，——我的意思是，16 和 14 是一樣的，管他呢。

Steven Pelayo, HSBC.

匯豐銀行的史蒂文‧佩拉約 (Steven Pelayo)。

Great. We could talk about 20-nanometer. You talked about it being, I think, as much as 30% faster ramp than what you had at 28-nanometer, 20% of revenues by the fourth quarter, that's all the topline. I'm curious about the margin impact too. And obviously you get a good ASP premium, but I think it took about, I don't know, maybe five quarters to get 20-nanometer corporate average margin, could you just talk a little bit about the pace, given the accelerated ramp to get 20-nanometer to corporate average margins?

偉大的。我們可以討論20奈米。您剛才提到，我認為，它的生產速度比 28 奈米製程的速度提高了 30％，到第四季度，它將占到收入的 20％，這就是全部的收入。我也很好奇利潤率的影響。顯然，您可以獲得不錯的 ASP 溢價，但我認為大概需要五個季度才能達到 20 奈米的企業平均利潤率，您能否談談速度，考慮到加速將 20 奈米達到企業平均利潤率？

Well, actually, five is pretty normal. I mean, yes, 28, it took, I guess, five, right? What is it, five?

嗯，實際上，五個是很正常的。我的意思是，是的，28，我想，需要5個，對吧？幾號啊，五？

It is my guess.

這是我的猜測。

Yeah.

是的。

Seven or eight quarter for 28-nanometer, But I can tell you, 20-SoC will be the same as 28-nanometer, will reach corporate average at seven or eight quarters like 28-nanometer.

28奈米需要七到八個季度，但我可以告訴你，20-SoC將與28奈米相同，將在七到八個季度達到企業平均水平，就像28奈米一樣。

And then if I could just get a clarification on that. The smoothing effect to the first quarter to try to take in some of the potential ramp in the second quarter, can you measure how much is that? And then does that then impact the potential growth in the second quarter? So are we taking two or three percentage points of growth away from the second quarter by pulling that into the first quarter or do you think it doesn't really impact, that there is going to be enough demand you could see in 2Q?

然後如果我能澄清一下這一點。第一季的平滑效應是為了吸收第二季的一些潛在成長，您能衡量這個效果有多大嗎？那麼這會影響第二季度的潛在成長嗎？那麼，將這一數字拉到第一季度，是否會使第二季度的成長減少 2 到 3 個百分點？或者您認為這不會產生什麼影響，因為第二季的需求會夠大？

No. This -- the so-called smoothing, just helps the margin, it does not affect the billing, the revenue.

不。這就是所謂的平滑，只是有助於提高利潤，而不會影響帳單和收入。

If I can add one more point, the real purpose is not to lose capacity. When you have a surge demand and your capacity is not enough and you lost it, you lose the business. By switching and smooth among quarters, we don't lose the product -- we don't lose the market share. That's the main purpose. So we don't have to build so much capacity, especially such peak capacity probably only exist for a few quarters, which is bad for the Company. Now, you understand that? Okay.

如果我可以補充一點的話，真正的目的是不要失去能力。當你的需求激增而你的產能不夠時，你就會失去生意。透過在各個季度之間進行切換和平滑，我們不會失去產品，也不會失去市場份額。這是主要目的。所以我們沒有必要建造那麼多的產能，尤其是這樣的峰值產能可能只會存在幾個季度，這對公司來說是不利的。現在你明白了嗎？好的。

Gokul Hariharan, JPMorgan.

摩根大通的 Gokul Hariharan。

Hi, thanks for taking my question, Dr. Chang, Dr. Wei and Liu and Lora. I had a quick question, just switching now gears a little bit on the back-end side. We hear a lot about TSMC working on the back-end side, especially on 2.5D, 3D, as well as refillable processors. And you also had given kind of a target of about [$1 billion] revenue sometime in 2015 or 2016. Could you update us on what your plans are on the back-end side? And secondly, also how does that work? When you work with the back-end partners, are you going to be full-fledged going into the just wafer level stuff or is it going to die level stuff as well? Thank you.

大家好，感謝張博士、魏博士、劉博士和 Lora 回答我的問題。我有一個簡單的問題，現在只需在後端稍微轉換主題。我們聽到很多有關台積電在後端工作的消息，特別是在 2.5D、3D 以及可再填充處理器方面。您也給出了 2015 年或 2016 年某個時候約 10 億美元收入的目標。您能否向我們介紹一下您在後端方面的計劃？其次，它是如何運作的？當您與後端合作夥伴合作時，您是否會全面涉足晶圓級產品，還是也會涉足晶片級產品？謝謝。

C.C.?

C.C.？

Do I need to repeat the question? Okay. Anyway, to answer your question that's on the revenue of reaching the $1 billion for the CoWoS and 3D IC, since we announced that the CoWoS technology and we work on the 3D IC, we're using a lot of key technologies and develop a lot of derivative applications. So today we estimate, probably will not go up to $1 billion, but it's around $800 million in year 2016, that's what our estimate today, all right. What's your second question, by the way?

我需要重複這個問題嗎？好的。無論如何，回答你的問題，關於 CoWoS 和 3D IC 的收入達到 10 億美元，自從我們宣布 CoWoS 技術並且我們致力於 3D IC 以來，我們正在使用很多關鍵技術並開發很多衍生應用。所以今天我們估計，可能不會達到 10 億美元，但到 2016 年大概會達到 8 億美元，這就是我們今天的估計，好吧。順便問一下，你的第二個問題是什麼？

Yes. Second is, is it going to be -- the back end activities, is it going to be limited only to the very high-end 2.5D/3D related products or is it also going to be whatever is going to be wafer-level package, like wafer-level CSP, those kind of areas?

是的。第二，它會是後端活動，是否僅限於非常高階的 2.5D/3D 相關產品，還是也會是晶圓級封裝，例如晶圓級 CSP 之類的領域？

Okay. The correct answer is, we are now shooting for some kind of technology balance here. We're always working with that customer to meet their demand, all right? So to answer your question, it's whatever -- or whatever our customer ask us to integrate, to give them better service, we do it, all right? So it's not limited to the 2.5D, 3D or whatever it is, all right?

好的。正確的答案是，我們現在正在努力實現某種技術平衡。我們一直在與該客戶合作以滿足他們的需求，好嗎？所以回答你的問題，無論什麼——或者無論我們的客戶要求我們整合什麼，為了給他們更好的服務，我們都會去做，好嗎？所以它不僅限於 2.5D、3D 或其他什麼，好嗎？

Donald Lu, Goldman Sachs.

高盛的唐納德·盧（Donald Lu）。

So Chairman, (spoken in foreign language). First question is, I want to ask the Chairman, how would you -- are you satisfied with the transition so far and also, how the two Presidents would share their work? Are they still rotating or not? And (multiple speakers) but probably not now. And maybe give us some details about how the Company is run. And I have a follow-up question on competition.

因此主席，（用外語講話）。第一個問題是，我想問主席，您對目前的過渡期是否滿意？兩位總統將如何分擔工作？它們還在旋轉嗎？並且（多位發言者）但也可能不是現在。也許可以向我們提供一些有關公司運營的詳細資訊。我還有一個關於競爭的後續問題。

All right. I am quite satisfied with the transition. And these two gentlemen; Mark is now responsible for sales, marketing, strategic planning, business development, and yes, information technology and materials management, all those. And C.C. is responsible for operations, all the operations, and he is also responsible for specialty technology R&D. Specialty technology incidentally accounts for 25% of our total business.

好的。我對這個轉變非常滿意。還有這兩位先生；馬克現在負責銷售、行銷、策略規劃、業務發展，當然還有資訊科技和材料管理。還有 C.C.負責運營，所有運營，同時也負責專業技術的研發。專業技術恰好占我們總業務的25％。

So now, Donald, your other question is whether they're going to rotate. My plan currently is, I don't plan it that way, I don't plan it that way right now. However, I deem it's a pretty flexible thing. Tomorrow, I may take one part of Mark's and give it to C.C. or vice versa. But I'm not considering rotation, per se. Yes, does that answer your first question?

所以現在，唐納德，你的另一個問題是他們是否會輪換。我目前的計劃是，我沒有那樣計劃，我現在沒有那樣計劃。然而，我認為這是一件非常靈活的事情。明天，我可能會拿馬克的一部分給 C.C.或反之亦然。但我本質上並沒有考慮輪換。是的，這回答了您的第一個問題嗎？

Yes, please. Thank you. My second question is, this is as far as I can remember the first time TSMC comments on competitors, mainly, Intel and Samsung.

是的，請。謝謝。我的第二個問題是，據我所知，這是台積電第一次對競爭對手發表評論，主要是英特爾和三星。

That's because they picked on us.

那是因為他們欺負我們。

I understand. That is a very good reason. Okay, since we are already doing it, why don't you give us more color? 16-nanometer, for example, are we saying that in terms of die size, performance, our product will be very similar to Intel's 40-nanometer FinFET? And also, Mark commented that for the FinFET tape-outs, specifically there's a CPU and server chips, and can we say that TSMC's CPU and server chips will have the similar physical performance as Intel's products today?

我明白。這是一個非常好的理由。好的，既然我們已經這樣做了，為什麼不給我們更多顏色呢？以 16 奈米為例，我們是否說，就晶片尺寸和性能而言，我們的產品將與英特爾的 40 奈米 FinFET 非常相似？另外，Mark 評論說，對於 FinFET 串流片，具體來說有 CPU 和伺服器晶片，我們能否說台積電的 CPU 和伺服器晶片將具有與英特爾當今產品相似的實體性能？

Well, I think, Donald, we have already given everybody enough information on our 16-FinFET. I think that if we keep giving more, we would be helping our competitors who have picked on us. And so, now, we do stand on what we said. We are going to -- our Grand Alliance will out-compete Intel and Samsung. Our Grand Alliance on the 16-FinFET will out-compete. By that I don't mean that we'll completely exclude them, no, no, no. We can't do it. We won't be able to do that. But our Grand Alliance, with us as foundry supplier, will capture a large share of the 16-nanometer. You agree with that don't you?

嗯，唐納德，我想我們已經向大家提供了有關我們的 16-FinFET 的足夠資訊。我認為，如果我們繼續付出更多，我們就會幫助那些欺負我們的競爭對手。所以，現在我們確實堅持我們所說的話。我們將會－我們的大聯盟將會戰勝英特爾和三星。我們在 16-FinFET 上的大聯盟將會在競爭中獲勝。我這樣說並不是說我們會完全排除他們，不，不，不。我們做不到。我們不能做到這一點。但是，我們的大聯盟，以我們作為代工供應商，將佔據 16 奈米的大部分份額。你同意這個不是嗎？

Yes. I think if you have a product in mind today, want to get to 16-FinFET, I think that your job will be more secure coming to TSMC. And make sure your product be able to deliver in the market.

是的。我認為，如果你今天心中有一個產品目標，想要達到 16-FinFET，那麼加入台積電你的工作會更有保障。並確保您的產品能夠在市場上銷售。

Bill Lu, Morgan Stanley..

摩根士丹利的 Bill Lu 說。

(inaudible - microphone inaccessible).

（聽不清楚-麥克風無法使用）。

Smartphone what?

智慧型手機什麼？

(inaudible - microphone inaccessible).

（聽不清楚-麥克風無法使用）。

Yes, right. Yes, I said that just now.

是的，對。是的，我剛才就這麼說了。

(inaudible - microphone inaccessible).

（聽不清楚-麥克風無法使用）。

No, I'm afraid I'm no expert on that. I mean -- but there are a lot of other non-semiconductor stuff in the handset. And maybe those people are getting squeezed or maybe the handset maker is getting squeezed, maybe the operator that subsidizes is getting squeezed. You asked me a general question, which I am not expert enough to answer.

不，恐怕我不是這方面的專家。我的意思是──但是手機裡還有很多其他非半導體的東西。或許這些人受到了擠壓，或許手機製造商受到了擠壓，或許提供補貼的業者也受到了擠壓。你問了我一個一般性的問題，我不夠專業，無法回答。

Or just to make sure I understand, so you kind of categorized into high-end, mid-end and low-end, do you see that the semi content is going up for each one of these segments, or what's the--?

或者只是為了確保我理解正確，所以您將其分為高端、中端和低端，您是否看到每個細分市場的半導體內容都在上升，或者是什麼？

Do we data on that, Lora?

我們有這方面的數據嗎，洛拉？

The high-end content definitely will go up. But the growth rate for high-end will be slower than the mid and low end. The mid and low end stay constant, but because the mid and low end has higher volume, which is to TSMC's advantage.

高端內容肯定會上升。但高端的成長速度會慢於中低端。中低端保持不變，但由於中低端的產量更高，這對台積電有利。

I actually look at more. I look more at our value in the smartphone. [Our wafer revenue generated from smartphones and tablets has gone up from $6 billion in 2012, to $8 billion last year, to $11 billion] (corrected by company after the call) next year, no, this year, sorry. 6, 8, 11.

我實際上看得更多。我更看重我們在智慧型手機中的價值。[我們從智慧型手機和平板電腦產生的晶圓收入從2012年的60億美元增加到去年的80億美元，再增加到110億美元]（電話會議後公司更正）明年，不，是今年，抱歉。6、8、11。

That's very helpful. Thank you. Second question is for Dr. Wei. You talked about 28-nanometers and I think the expectation is that you are going to try to switch customers in poly to high-K metal gate. If you look at the market this year for 28, what do you think is the split between high-K metal gate and poly, is it 70/30, is it 80/20? And can you also talk about your expected market share for TSMC for high-K metal gate and also for poly? Thanks.

這非常有幫助。謝謝。第二個問題請問魏博士。您談到了 28 奈米，我認為期望是您將嘗試將客戶從多晶矽轉向高 K 金屬閘極。如果您看一下今年 28 年的市場，您認為高 K 金屬閘極和多晶矽之間的比例是怎樣的，是 70/30 還是 80/20？您能否談談台積電在高 K 金屬閘極和多晶矽方面的預期市場佔有率？謝謝。

In terms of TSMC, I would say greater than 80% of the 28-nanometers loading will be high-K metal gate.

就台積電而言，我想說 28 奈米負載的 80% 以上將是高 K 金屬閘極。

How about for the industry?

對於業界來說又如何呢？

I cannot comment on that.

我無法對此發表評論。

Mehdi Hosseini, SIG.

Mehdi Hosseini，SIG。

Thank you for taking my question. I have two of them. The first one is for Dr. Liu and Dr. Wei. You offered some metrics comparing HPM with HP, talking about the speed improving by 30% and power by 15%. Would you be able to offer similar targets or similar metrics comparing 28 to 20, and 20 to 16? And I have a follow-up.

感謝您回答我的問題。我有兩個。第一個是給劉博士和魏博士的。您提供了一些將 HPM 與 HP 進行比較的指標，指出速度提高了 30%，功率提高了 15%。您能否提供類似的目標或類似的指標來比較 28 與 20、20 與 16 ？我還有一個後續問題。

I think it's -- it sounds like C.C., but doesn't -- did you hear the question?

我認為它——聽起來像 C.C.，但又不——你聽到這個問題了嗎？

Well, the question is that he asked from the 28-nanometer HPM compared with 28.

那麼，問題是他問的是28奈米HPM與28奈米HPM相比有什麼差別。

Go ahead and answer that, if you know what the question is.

如果你知道問題是什麼，請回答。

All right. If I repeat the question correctly, that is he asked about from 28HPM compete with -- not compete, compare with the 28LP, there was 30% speed improvement. Now how about the 16-FinFET? 16-FinFET actually improved much more compared with the 28HPM. Did that answer the question?

好的。如果我正確重複了這個問題，那就是他問的是 28HPM 與 28LP 競爭，而不是競爭，與 28LP 相比，速度提高了 30%。那麼 16-FinFET 呢？與 28HPM 相比，16-FinFET 實際上有了很大的改進。這回答了問題嗎？

And what about 28?

那麼 28 呢？

I cannot hear you clearly.

我聽不清楚。

Mehdi, are you still on the line?

邁赫迪，你還在電話裡嗎？

Yes. Can you hear me?

是的。你聽得到我嗎？

Okay. Mehdi, I think your question was asking Dr. Wei to explain what's the power and speed improvement from 28 to 20 and from 20 to 16?

好的。邁赫迪，我認為你的問題是要求魏博士解釋從 28 到 20 以及從 20 到 16 的功率和速度提高了多少？

Yes.

是的。

Okay, 28 to 20 got about 20% improvement in terms of performance. From the 20 to 16, I'm specifically talking about the 20-SoC to 16-FinFET, the 16-FinFET will have higher than 30% improvement in the speed. Does that answer the question again?

好的，從 28 到 20，性能方面獲得了大約 20% 的提升。從20到16，我具體說的是從20-SoC到16-FinFET，16-FinFET的速度將有30%以上的提升。這又回答了這個問題嗎？

Yes, it does.

是的。

Okay. Thank you.

好的。謝謝。

And let me move on to the second question that I have for Dr. Chang. Over the past two years, we have seen a significant improvement in revenues from Q1 to Q2 and this was followed by seasonal or below seasonal trend in the second half. How do you see this year evolving? Do you see this year be any different than the trend over the past two years?

讓我繼續問張博士的第二個問題。在過去兩年中，我們看到第一季到第二季的營收有顯著改善，而下半年則出現了季節性或低於季節性的趨勢。您認為今年會如何發展？您認為今年的趨勢與過去兩年有何不同？

So Mehdi, your question is about seasonality of this year, whether we will have a strong rebound in second quarter from first quarter, and then whether we will have a stronger second half than the first half?

那麼 Mehdi，你的問題是關於今年的季節性，我們第二季是否會比第一季強勁反彈，然後下半年是否會比上半年更強勁？

Yes. That's correct.

是的。沒錯。

Our current outlook is very, very anti-normal seasonal. Our current outlook is that we have -- that the first quarter is the lowest, and the second quarter is stronger, the third quarter is stronger yet, and even fourth quarter is a bit stronger than the third quarter. Now that's -- I certainly would not call that anything seasonal at all. I think that's pretty unique for just this year and mainly because of the ramp-up of 20-SoC.

我們目前的前景與正常的季節性非常不符。我們目前的預測是，第一季是最低的，第二季比較強勁，第三季更強勁，甚至第四季比第三季強一點。現在——我絕對不會將其稱為任何季節性的東西。我認為這對今年來說非常獨特，主要因為 20-SoC 的崛起。

Thank you, that's pretty helpful.

謝謝，這很有幫助。

Eric Chen, Daiwa.

艾瑞克‧陳 (Eric Chen)，大和。

(spoken in foreign language) Happy New Year. Let me know if I got it wrong. You just mentioned your smartphone high-speed ASP getting higher (inaudible) US dollars. And I believe that's probably because of the (inaudible) smartphone from a single core to dual core to quad core. And my point is, probably we will now have the 16 core. And the 16 core bit probably will be the next launch. I try to say is, we probably will see the, what we really call, the low-end smartphone, the [weight] will really pitch up and then that probably will give you some, the ASP impact. So actually my question is the -- your strategy and that in term of the low-end smartphone IC. Once I look at the China's model IC maker, your market share, probably, that's my understanding, again let me know if I'm wrong, that your market share at a China smartphone IC maker, probably lower than your market share and the global smartphone IC maker. So what is your strategy to deal with the wafer plus competition?

（外語）新年快樂。如果我錯了請告訴我。您剛才提到，您的智慧型手機高速 ASP 越來越高（聽不清楚）美元。我相信這可能是因為（聽不清楚）智慧型手機從單核心到雙核心再到四核心。我的觀點是，我們現在可能已經有 16 個核心了。16 核心處理器很可能將會是下一款產品。我想說的是，我們可能會看到，我們真正所說的低階智慧型手機，其重量會真正上升，然後這可能會對 ASP 產生一些影響。所以實際上我的問題是——你的策略以及關於低階智慧型手機 IC 的策略。一旦我看一下中國的型號 IC 製造商，您的市場份額，可能，這是我的理解，如果我錯了，請再次告訴我，您在中國智慧型手機 IC 製造商的市場份額可能低於您的市場份額和全球智慧型手機 IC 製造商。那麼你們應對晶圓加競爭的策略是什麼？

We intend to be a significant factor in the China market. We intend to be a significant factor in the medium to low-end, middle to low-end kind of smartphones.

我們致力於成為中國市場的重要因素。我們打算成為中低階、中低階智慧型手機領域的重要因素。

Okay. Let me say more exactly. The other way you talked about the 28, the HPC, that's mainly for the low-end smartphone IC business. And for the [car], why I choose the 28 HPC, why do I choose the 28 poly style and what kind of advantage are we talking about, and anything in the foundry's technology?

好的。讓我更準確地說一下。您談到的另一種方式是 28，HPC，主要針對低階智慧型手機 IC 業務。對於[汽車]，為什麼我選擇28 HPC，為什麼我選擇28聚合物風格，我們在談論什麼樣的優勢，以及鑄造廠的技術方面有什麼優勢？

Our 28 HPC is still the high-K metal gate version, so the performance will be much better than 28LP, but yet it is a low cost version. So you can trade off that performance and the die size sometimes. And so you can get your optimum position that depend on your product. From our point of view, and we work with the customer, that we offer this solution for them to meet the challenges of the market of mid, low-end smartphones. These are low-end, so you expect the prices to be low. But then for us, we offer the technology to compensate that.

我們的28 HPC仍然是高K金屬閘極版本，因此性能將比28LP好很多，但它仍然是一個低成本版本。因此，有時您可以在性能和晶片尺寸之間進行權衡。這樣您就可以根據您的產品獲得最佳位置。從我們的角度來看，我們與客戶合作，為他們提供這種解決方案，以應對中低階智慧型手機市場的挑戰。這些都是低階產品，所以你期望價格也很低。但對我們來說，我們提供技術來彌補這一點。

How many percent of performance improvement, how many percent the price is lower than (inaudible)?

性能提高了百分之多少，價格比（聽不清楚）降低了百分之多少？

From LP to HPC, I think.

我認為是從 LP 到 HPC。

Yeah. From LP to HPC, I'm not going to tell you that how many percentage of the price or something like that. I'll tell you the --

是的。從LP到HPC，我不會告訴你價格的百分比是多少或類似的東西。我會告訴你——

You realize it depends on the guy that designs it too. But as far as the intrinsic stuff is concerned [rather].

您會意識到這也取決於設計它的人。但就內在的東西而言[相反]。

You are mentioning about the performance?

你提到表演了嗎？

Speed.

速度。

Oh the speed. The speed, actually, 28HPC is exactly the same as a 28HPM.

哦，速度真快。實際上，28HPC 的速度與 28HPM 完全相同。

So how much percent better?

那麼好多少百分比呢？

30% better. So TSMC's customer can trade off the 30% speed gain, performance and then trade in with the die size, so that you can gain the die size. And you don't -- if you don't enjoy the 30% performance, you can enjoy the die size shrinking. That's the idea.

好 30%。因此，台積電的客戶可以在 30% 的速度提升和效能之間進行權衡，然後再犧牲晶片尺寸，這樣就可以獲得晶片尺寸。但你不會——如果你不享受 30% 的性能，你可以享受晶片尺寸的縮小。這就是想法。

Okay, that's it. I assume that wafer price falling back at 10% higher than Poly-SiON.

好的，就這樣。我預計晶圓價格將回落至比 Poly-SiON 高 10% 的水平。

We're not talking about wafer price.

我們不是在談論晶圓價格。

Okay, that's it. Thank you.

好的，就這樣。謝謝。

We'll tell our customers wafer price. You're not our customer, we're not going to tell you.

我們會告訴客戶晶圓的價格。你不是我們的客戶，我們不會告訴你。

Thank you. And by the way the same question -- the question for Lora and I remember that Dr. Chang just mentioned all the ASP this year will jump by several points and my question when that will get (multiple speakers)?

謝謝。順便說一下，同樣的問題——關於 Lora 的問題，我記得 Chang 博士剛才提到，今年的 ASP 將會躍升幾個百分點，我的問題是什麼時候會達到（多位發言者）？

No, no, no. That's not what I said. I said our branded ASP will rise. It will not jump, it will rise. Our branded ASP will rise by several points.

不，不，不。我不是這麼說的。我說過，我們的品牌平均售價將會上漲。它不會跳，它會升起。我們的品牌 ASP 將上升幾個點。

They'll rise also by several points. When that will get the TSMC's revenue growth at 18% year-on-year when (inaudible), correct me if I am wrong. So my point is (inaudible) last year, because one of the main reason because of branded ASP and I believe that branded ASP last year probably ramped by probably 5% more. So are there either (inaudible) or lower, how you are seeing about it this year? And you mentioned a 20-nanometer process in Q4, probably will reach the 10% of the total revenue -- 20, I'm sorry, 20. And you will reach about 10% on the total revenue. In that case can we give the sense (inaudible) that TSMC's branded ASP will rest, like over 5% year-on-year this year?

它們也會上升幾個點。當台積電的收入年增 18% 時（聽不清楚），如果我錯了，請糾正我。所以我的觀點是（聽不清楚）去年，主要原因之一是品牌 ASP，我相信去年品牌 ASP 可能上漲了 5% 以上。那麼，是（聽不清楚）還是更低，您今年對此有何看法？您提到第四季的 20 奈米製程可能將達到總收入的 10%，也就是 20%，對不起，是 20%。你將獲得總收入的10%左右。那麼，我們是否可以得出這樣的結論（聽不清楚），即台積電品牌的平均銷售價格將保持不變，例如今年同比下降 5% 以上？

Actually, Chairman just gave you the answer. He said the blended ASP with the product mix richer, it will go up several points. So he has already answered your question. So what's your true question?

其實主席剛才已經給了你答案。他表示，隨著產品結構更加豐富，混合平均售價將會上漲幾個點。所以他已經回答了你的問題。那你真正的問題是什麼？

I would like to know, compared to the last year, (multiple speaker) stronger the confidence on the ASP?

我想知道，與去年相比，（多位發言者）對 ASP 的信心是否更強？

Well, Eric assume that 2013, our ASP went up by 5%, which we will not comment. And he wants to know whether 2014 we can go up above 5% or below 5%, which we will not comment. Okay. Next question will come from the floor and it will be UBS, Jonah Cheng.

嗯，Eric 假設 2013 年我們的 ASP 上漲了 5%，對此我們不會發表評論。他想知道 2014 年我們的成長率是否可以超過 5% 或低於 5%，我們不會對此發表評論。好的。下一個提問者是瑞銀的 Jonah Cheng。

(spoken in foreign language) Just one small question for me. So recently we know the China government, they tried to announce some stimulus for rent to the local semiconductor industry, and we know it is very difficult for them to do the semiconductor foundry, but maybe (inaudible) fabless or semiconductor equipment side, how is TSMC positioned to get this kind of opportunity for business? So that's my question. Thank you.

（用外語說）我只想問一個小問題。所以最近我們知道中國政府試圖宣布一些刺激當地半導體行業的租金政策，我們知道他們做半導體代工非常困難，但也許（聽不清楚）無晶圓廠或半導體設備方面，台積電如何定位來獲得這種商業機會？這就是我的問題。謝謝。

Now we have not considered that. We understand in fact that only Chinese fabless companies will benefit from, not companies located in China, but truly Chinese registered companies can -- only they can benefit from this subsidy, foundry or fabless.

現在我們還沒有考慮到這一點。事實上，我們知道只有中國的無晶圓廠公司才能受益，而不是位於中國的公司，但真正在中國註冊的公司——無論是代工廠還是無晶圓廠，都只有他們才能從這項補貼中受益。

I think, Jonah, your question is, can TSMC benefit from the benefit of the Chinese companies?

我認為，喬納，你的問題是，台積電能否從中國公司的利益中獲益？

Well, I don't know about that. We do have a lot of business in China from companies, from fabless, Chinese fabless companies. Our business has been rapidly growing. I don't know. I somehow doubt that in giving us their business, they are benefiting from the subsidy. I somehow doubt that, but I don't know for sure.

嗯，我對此不太清楚。我們在中國確實有很多業務，來自無晶圓廠的公司，以及中國的無晶圓廠公司。我們的業務一直在快速成長。我不知道。我有點懷疑，他們在給我們做生意時是否從補貼中獲益。我對此有些懷疑，但我也不太確定。

Can I add a point?

我可以加分嗎？

Yeah.

是的。

I think we will benefit.

我認為我們將受益。

Oh, we will?

噢，我們會的嗎？

The fabless companies in China are very aggressive approaching leading-edge technologies. To tell you, our 16-FinFET this year, already some of the fabless companies will be using it in tape-outs. So, I think all those fabless companies' subsidy will propel them into the leading-edge technology more.

中國的無晶圓廠設計公司非常積極地尋求尖端技術。告訴你，我們今年的 16-FinFET，已經有一些無晶圓廠公司在流片時使用它了。因此，我認為所有這些無晶圓廠公司的補貼將推動它們進一步朝向尖端技術邁進。

I don't see how the two are related. The subsidy is not for them to use leading-edge, is it?

我不明白這兩者有何關聯。補貼不就是讓他們用尖端科技嗎？

Because our technology -- leading-edge technology is not yet available in China.

因為我們的技術──尖端技術在中國還沒有。

Yes, that I know. So how does that -- how is that related to subsidy again?

是的，我知道。那麼這跟補貼又有什麼關係呢？

Their business will be aggressive moving into leading-edge, which will benefit our competitive advantage.

他們的業務將積極進軍前沿領域，這將有利於我們的競爭優勢。

They will be generally better off after receiving the subsidy, as that allows them to move faster into leading-edge technology. That's the point. That's just like saying that somebody that sells first-class cuisine will be better off if I am making more money. But what happens -- anyway, never mind.

獲得補貼後，他們總體上會過得更好，因為這使他們能夠更快地進入尖端技術。這就是重點。這就像是說，如果我賺更多的錢，那麼賣一流美食的人就會過得更好。但不管怎樣——不管怎樣，沒關係。

All right. Well, I think -- yes, I think with these strong prospects in China, we will be very happy to end our quarterly conference call here. And before we conclude the conference, please be advised that the replay of the conference will be accessible within three hours from now. Transcript will become available in 24 hours from now. And thank you for joining us today. We hope you will join us again next quarter. Goodbye and have a good day.

好的。嗯，我想——是的，我認為鑑於中國市場的強勁前景，我們將非常高興在這裡結束我們的季度電話會議。在我們結束會議之前，請注意，會議重播將在三小時內提供。成績單將在 24 小時後提供。感謝您今天加入我們。我們希望您下個季度能再次加入我們。再見，祝你有美好的一天。

Thank you very much. Good meeting, yeah.

非常感謝。是的，很高興見到你。