台積電 ADR (TSM) 2015 Q4 法說會逐字稿

Happy New Year to everyone and welcome to TSMC's fourth-quarter 2015 earnings conference and conference call. This is Elizabeth Sun, TSMC's Director of Corporate Communications and your host for today.

祝大家新年快樂，歡迎參加台積電2015年第四季業績發表會及電話會議。我是台積電企業傳播總監伊莉莎白·孫，也是今天的主持人。

Today's event is webcast live through TSMC's website at www.tsmc.com. If you are joining us via the conference call, your dial-in 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.

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，您的撥入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, Miss Lora Ho, will summarize our operations in the fourth quarter of 2015, followed by our guidance for the first quarter of 2016.

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2015年第四季的營運狀況，隨後對2016年第一季做出指引。

Afterwards, TSMC's two Co-CEOs, Dr. Mark Liu and Dr. C.C. Wei, and CFO Lora Ho will jointly provide our key messages. After that, TSMC's Chairman, Dr. Morris Chang, will host the Q&A session.

隨後，台積電兩位聯席執行長劉德華博士和陳建昌博士分別致詞。 Wei 和財務長 Lora Ho 將共同傳達我們的關鍵訊息。隨後，台積電董事長張忠謀博士將主持問答環節。

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 like to 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, Miss Lora Ho, for the summary of operations and current quarter guidance.

現在，我想請台積電財務長何麗拉女士作營運總結和本季指引。

Thank you, Elizabeth. Good afternoon, everyone. Welcome to join us today. My presentation will start with the financial highlights for the fourth quarter and a recap of the whole year 2015, followed by the guidance of the current quarter.

謝謝你，伊麗莎白。大家下午好。歡迎今天加入我們。我的演講將首先介紹第四季的財務亮點和 2015 年全年的回顧，然後介紹本季的指導。

In the fourth quarter, customers continued to carefully manage their inventory and our revenue declined by 4.2% sequentially, which is in line with our guidance.

第四季度，客戶繼續謹慎管理庫存，我們的營收季減 4.2%，符合我們的預期。

Despite lower revenue, gross margin rose slightly to 48.6% as cost reduction efforts and the favorable foreign exchange rate more than helped to offset impact of lower utilization.

儘管收入下降，但由於成本削減措施和有利的外匯匯率抵消了利用率下降的影響，毛利率小幅上升至 48.6%。

Operating margin of 38.3% reached the higher end of our guidance as we were able to keep a similar level of operating efficiency in the third quarter despite a drop in revenue.

38.3% 的營業利潤率達到了我們預期的高位，因為儘管收入下降，但我們在第三季度仍能維持類似的營運效率水準。

In non-operating items, we recognized TWD724m or TWD0.02 in EPS from ASML share disposal gains. Overall, our fourth quarter EPS reached TWD2.81.

在非經營項目中，我們從 ASML 股票處置收益中確認了 7.24 億新台幣或每股收益 0.02 新台幣。整體而言，我們第四季每股盈餘達2.81元。

Now let's take a look at revenue contribution by application. During the fourth quarter, communication remained flat sequentially, consumer and industrial/standard decreased 23% and 12% respectively, while computer increased 5%.

現在我們來看看各應用程式的收入貢獻。第四季度，通訊業務環比持平，消費業務和工業/標準業務分別下降 23% 和 12%，而電腦業務成長 5%。

On a full-year basis, revenue from communication increased 16% year over year and represented 61% of our total wafer revenue. Industrial and standard also saw 22% year-over-year growth, driven by increasing usage of MCU, Flash controller and the power management IC.

全年來看，通訊業務營收年增16%，占我們晶圓總營收的61%。由於 MCU、Flash 控制器和電源管理 IC 的使用增加，工業和標準也實現了 22% 的年增長。

Now let's take a look at revenue by technology. As we have said before, we saw a strong ramp of 16-nanometer in the fourth quarter. And together, 16-nanometer and 20-nanometer contributed 24% of our total wafer revenue in the fourth quarter.

現在讓我們來看看按技術劃分的收入。正如我們之前所說，我們在第四季度看到了 16 奈米的強勁成長。16奈米和20奈米合計佔第四季晶圓總收入的24%。

On a full year basis, 20-nanometer and 16-nanometer accounted for 20% of our total wafer revenue in 2015 versus 9% in 2014. And we remain confident that the combined revenue contribution from these two technologies will continue to grow meaningfully in 2016.

從全年來看，2015 年 20 奈米和 16 奈米占我們晶圓總收入的 20%，而 2014 年這一比例為 9%。我們堅信，這兩種技術帶來的綜合收入貢獻在 2016 年將持續大幅成長。

28-nanometer also held up very well and accounted for 28% of our total wafer revenue in 2015.

28奈米也表現良好，佔2015年晶圓總收入的28％。

Moving into the balance sheet, we ended the fourth quarter with cash and marketable securities of TWD586b, an increase of TWD61b. On the liability side, current liabilities increased TWD11b.

進入資產負債表，我們第四季結束時的現金和有價證券為5,860億新台幣，增加了610億新台幣。負債方面，流動負債增加110億新台幣。

On financial ratios, accounts receivable turnover days decreased 1 day to 41 days, while days of inventory increased by 3 days to 62 days, reflecting higher working process inventory at advanced nodes.

財務比率方面，應收帳款週轉天數減少1天至41天，庫存天數增加3天至62天，反映高階節點的工作流程庫存較高。

Now let me make a few comments on cash flow and CapEx. During the fourth quarter we generated about TWD145b cash from operations and spent TWD85b in capital expenditures. As a result, we generated free cash flow of TWD60b this quarter and our overall cash balance increased TWD47b to TWD563b at the end of the quarter.

現在，讓我對現金流和資本支出發表一些評論。第四季度，我們從營運中產生了約1,450億新台幣的現金，並花費了850億新台幣的資本支出。因此，本季我們產生了600億新台幣的自由現金流，季末我們的整體現金餘額增加了470億新台幣，達到5,630億新台幣。

In US dollar terms, our fourth-quarter CapEx was $2.6b and reached $8.1b for the full year 2015.

以美元計算，我們第四季的資本支出為 26 億美元，2015 年全年資本支出達到 81 億美元。

Now I would like to give you a recap of our performance in 2015. Despite a challenging year as the inventory corrections of fabless customers occurred continuously, we managed to grow our revenue 10.6% year over year to reach TWD844b or $26.6b in US dollar terms.

現在我想向大家回顧一下我們2015年的表現。儘管由於無晶圓廠客戶的庫存不斷調整而面臨挑戰，我們的收入仍同比增長 10.6%，達到 8,440 億新台幣，以美元計算為 266 億美元。

Gross margin saw an 80-basis-point decline from 2014 as the decline in capacity utilization overweighed a more favorable foreign exchange rate. Despite a drop in actual gross margin, continued improvement in our manufacturing efficiency led to a structural improvement in profitability.

由於產能利用率的下降抵消了更有利的外匯匯率的影響，毛利率較 2014 年下降了 80 個基點。雖然實際毛利率有所下降，但生產效率的持續提升帶動獲利能力實現結構性改善。

Our operating margin also declined 0.9% mainly due to higher R&D expense for 10-nanometer development as well as a TWD2.3b impairment loss related to our solar operations.

我們的營業利潤率也下降了 0.9%，主要原因是 10 奈米開發的研發費用增加，以及與太陽能業務相關的 23 億新台幣的減損損失。

In 2015, gains from share disposal totaled TWD24.7b or TWD0.84 EPS compared to TWD2.4b or TWD0.08 EPS in 2014.

2015 年，股票出售收益總計 247 億新台幣，或每股收益 0.84 新台幣，而 2014 年為 24 億新台幣，或每股收益 0.08 新台幣。

Our effective tax rate in 2015 was 13.5%. And the full-year earnings per share was TWD11.82.

我們 2015 年的有效稅率為 13.5%。全年每股盈餘11.82元。

On cash flow, we spent TWD258b in capital expenditure, while we generated TWD530b in operating cash flow. Accordingly, our free cash flow more than doubled in 2015 to TWD272b, which is the second year in a row it has more than doubled.

在現金流方面，我們的資本支出為2,580億新台幣，而營運現金流則產生5,300億新台幣。因此，2015年我們的自由現金流成長了一倍多，達到2720億新台幣，這是連續第二年增長一倍多。

Our 2015 whole-year ROE also came out to be 27%.

我們2015年全年的ROE也達到了27%。

I have finished my financial summary. Now let's turn to the outlook for the first quarter 2016.

我已經完成我的財務摘要。現在讓我們來看看2016年第一季的展望。

While the China smartphone market has shown some signal of recovery, customers remain cautious in general. Based on our current business outlook and the foreign exchange rate assumptions of US dollar to TWD32.50, we expect first-quarter revenue to be between TWD198b and TWD201b, which represents 1.3% to 2.7% sequential decline; gross profit margin to be between 47% and 49%; and operating margin to be between 36.5% and 38.5%.

儘管中國智慧型手機市場已顯示出一些復甦的跡象，但消費者總體上仍保持謹慎。基於我們目前的業務前景和美元兌32.50新台幣的匯率假設，我們預期第一季營收在1,980億至2,010億新台幣之間，季減1.3%至2.7%；毛利率介於47%至49%之間；營業利潤率介於36.5%至38.5%之間。

This concludes my remarks. Now I would like to turn the podium to Mark Liu for his comments.

我的發言到此結束。現在我想請劉德華先生發表評論。

Good afternoon, everyone. I will start with the demand outlook messages.

大家下午好。我將從需求前景資訊開始。

As the semiconductor supply chain went through a very severe inventory reduction during the fourth quarter 2015, our fast 16-nanometer shipment ramp-up during that quarter somewhat mitigated the inventory management impact to our sales revenue.

由於半導體供應鏈在 2015 年第四季經歷了非常嚴重的庫存減少，我們當季 16 奈米出貨量的快速成長在一定程度上減輕了庫存管理對我們銷售收入的影響。

As Lora just reported, in the fourth quarter 2015 we finished our revenue with quarter to quarter of minus 4.2%, and TSMC concluded our 2015 full year with 10.6% revenue growth.

正如Lora剛剛報導的那樣，2015年第四季我們的營收環比下降了4.2%，而台積電2015年全年的營收成長了10.6%。

This severe inventory reduction in the fabless industry during the fourth quarter brought fabless days of inventory to about or slightly below the seasonal level as we exited 2015. However, the strong US dollar environment and a volatile financial market that dampened the demand for overall semiconductor last year may continue for some time. Therefore we expect our customers will likely remain cautious in their inventory control and keep inventory close to seasonal level.

2015 年第四季度，無晶圓廠產業的庫存大幅減少，導致無晶圓廠的庫存天數降至季節水準左右，或略低於季節水準。不過，強勢美元環境和動盪的金融市場抑制了去年整體半導體的需求，這種狀況可能還會持續一段時間。因此，我們預計我們的客戶將在庫存控制方面保持謹慎，並將庫存保持在接近季節性水平。

For our first quarter 2016, this quarter, we see a reduction of high-end smartphone demand. On the other hand, demand for smartphones in China and other emerging markets show signs of recovery, with an upward momentum. We thus forecast a mild revenue decline of minus 1.3% to minus 2.7% quarter to quarter for the first quarter 2016.

就 2016 年第一季而言，我們發現高階智慧型手機需求減少。另一方面，中國等新興市場智慧型手機需求出現復甦跡象，並呈現上升動能。因此，我們預測 2016 年第一季的營收將季減 1.3% 到 2.7%。

Beyond the first quarter 2016, we expect to be back to a growth trajectory. For 2016, we forecast the world smartphone shipment unit growth rate to be plus 8%, PC minus 3%, tablet minus 7%, and the digital consumer electronics minus 5%.

我們預計2016年第一季以後將重回成長軌道。2016年，我們預測全球智慧型手機出貨量成長率為+8%，PC成長率為-3%，平板電腦成長率為-7%，數位消費性電子產品成長率為-5%。

Smartphones will continue to be a major driver for TSMC business in 2016. TSMC's silicon content in an average high-end and mid-end smartphone are increasing significantly while TSMC's silicon content in an average low-end smartphone remains approximately the same. Therefore TSMC will participate broadly in this overall 8% smartphone unit growth.

2016年，智慧型手機將持續成為台積電業務的主要推手。台積電在平均高階和中階智慧型手機中的矽含量正在大幅提升，而台積電在平均低階智慧型手機中的矽含量則基本保持不變。因此台積電將廣泛參與整體智慧型手機銷售 8% 的成長。

From the process technology perspective, we had a very successful ramp-up of 16-nanometer customer products, with yield performance ahead of our plan in 2015. This demand continues to be strong and the ramp-up will continue through this year.

從製程技術角度來看，我們非常成功地提升了16奈米客戶產品的產量，2015年的良品率表現超出了我們的計畫。這種需求持續強勁，成長動能將持續到今年年底。

Given this current macroeconomic environment, we now estimate the 2015 growth rate of world semiconductor to be about 2% year on year and 2016 growth rate of world foundries to be about 5% year on year. And TSMC growth rate is expected to be between 5% and 10%.

在目前的宏觀經濟環境下，我們目前預計2015年全球半導體年增率約為2%，2016年全球晶圓代工廠年增率約為5%。而台積電的成長率預計在5%至10%之間。

Now I would like to give you -- deliver messages on our leading-edge technologies.

現在我想向你們介紹一下我們的尖端技術。

Our 10-nanometer technology development is on track. We are currently in intensive yield learning mode in our technology development. Our 256-megabit SRAM is yielding well. We expect to complete process and product qualification and begin customer product tape-outs this quarter.

我們的10奈米技術開發正在順利進行中。我們目前正處於技術開發中的密集收益學習模式。我們的 256 兆位 SRAM 產量良好。我們預計本季完成流程和產品鑑定並開始客戶產品流程。

Our 7-nanometer technology development progress is on schedule as well. TSMC's 7-nanometer technology development leverage our 10-nanometer development very effectively. At the same time, TSMC's 7-nanometer offers a substantial density improvement, performance improvement and power reduction from 10-nanometer.

我們的7奈米技術開發進度也正在按計畫進行。台積電7奈米技術的開發非常有效地利用了我們的10奈米技術開發。同時，台積電7奈米與10奈米相比，密度、性能、功耗都有了大幅提升。

These two technologies, 10-nanometer and 7-nanometer, will cover a very wide range of applications, including application processors for smartphone, high-end networking, advanced graphics, field-programmable gate array, game console, wearables and other consumer products.

10奈米和7奈米這兩項技術將涵蓋非常廣泛的應用，包括智慧型手機的應用處理器、高階網路、高階圖形、現場可程式閘陣列、遊戲機、穿戴式裝置和其他消費性產品。

We see major product advancement in three major product sectors in the next two years from 2015 to 2017. First sector is high-end smartphone. We expect to see between now and 2017 a more than 1.5 times of transmission speed increase and greater than 2.2 times of visual experience in high-end smartphones. Meanwhile, data sensing will move towards context awareness sensing. All those advances will be supported by TSMC's 10-nanometer and TSMC's 7-nanometer technologies.

我們預計，未來兩年（2015 年至 2017 年）三大產品領域將出現重大產品進步。第一個領域是高階智慧型手機。我們預計從現在到2017年，高階智慧型手機的傳輸速度將提高1.5倍以上，視覺體驗將提高2.2倍以上。同時，數據感知將走向情境感知。所有這些進步都將由台積電的 10 奈米和台積電 7 奈米技術提供支援。

Second sector is high-performance computing. We expect to have a 2 times of CPU cores in a processor unit to carry the needed data processing. The computing network infrastructure will need 1.6 times bandwidth for higher data rate. Again, all those advances will be supported by our 10-nanometer and 7-nanometer technologies.

第二個領域是高效能運算。我們期望在一個處理器單元中擁有2倍的CPU核心來進行所需的資料處理。計算網路基礎設施將需要1.6倍的頻寬來實現更高的資料速率。再次重申，所有這些進步都將由我們的 10 奈米和 7 奈米技術提供支援。

Third sector is on emerging applications, such as virtual reality, gaming and automotives. For example, the advanced driver assistance system, ADAS, on cars can greatly enhance the safety on the road for the overall automotive industry. The processors typically will need 20 times of computing power from today's level to serve that purpose. These applications will also supported by TSMC's 10-nanometer and 7-nanometer technologies and we're looking forward to that.

第三部門是新興應用，例如虛擬實境、遊戲和汽車。例如，汽車上的高級駕駛輔助系統（ADAS）可以大大提高整個汽車產業的道路安全性。為了達到這個目的，處理器通常需要20倍於當今水準的運算能力。這些應用也將得到台積電10奈米和7奈米技術的支持，我們對此充滿期待。

I also would like to update you on the development progress beyond our 7-nanometer. We have a sizeable third R&D team developing our 5-nanometer technology for more than a year. Several innovative features and capabilities on transistor, contact and interconnect have been demonstrated. Our 5-nanometer technology is planned about two years after our 7-nanometer.

我還想向您介紹我們 7 奈米以外的開發進展。我們擁有龐大的第三方研發團隊，已經花了一年多的時間開發我們的 5 奈米技術。已經展示了晶體管、接觸和互連方面的幾種創新特性和能力。我們的 5 奈米技術計劃在 7 奈米技術推出後約兩年推出。

We made significant progress on EUV to prepare for its insertion likely in 5-nanometer for process simplification and cost-effective density scaling. At the present time, we are installing the third generation EUV tools in TSMC fabs.

我們在 EUV 方面取得了重大進展，為將其引入 5 奈米做好了準備，以簡化流程並實現具有成本效益的密度擴展。目前，我們正在台積電晶圓廠安裝第三代 EUV 工具。

We also have an extensive pipeline of technical innovation to extend the Moore's Law, including advanced patterning, high mobility channel materials, new nano-wire transistor structures, low resistance and low capacitors, contact and wires. Our goal is to further double the data processing throughput for application processor, graphic processor, field-programmable gate array and other process at our every nodes.

我們也擁有廣泛的技術創新管道來延伸摩爾定律，包括先進的圖案化、高遷移率通道材料、新型奈米線電晶體結構、低電阻和低電容、接觸和電線。我們的目標是進一步將每個節點的應用處理器、圖形處理器、現場可編程閘陣列和其他處理器的資料處理吞吐量提高一倍。

Above is my message. Thank you very much. I'll turn the podium to C.C. Wei.

以上是我的留言。非常感謝。我將把講台轉向 C.C.韋。

Thank you, Mark. Good afternoon, ladies and gentlemen. Today I will update you the status of our 28-nanometer, 16-nanometer, InFO, and followed by comments on our specialty technologies.

謝謝你，馬克。女士們、先生們，午安。今天，我將向您介紹我們的 28 奈米、16 奈米、InFO 的狀態，然後對我們的專業技術進行評論。

First, 28-nanometer. The utilization rate of our 28-nanometer has recovered to a level close to 90% in first quarter this year and also the wafer demand increases. We expect this utilization rate to remain above 90% for the remainder of this year.

第一，28奈米。我們的28奈米利用率在今年第一季已經恢復到接近90%的水平，而且晶圓需求也有所增加。我們預計今年剩餘時間內利用率將維持在 90% 以上。

In addition to wafer demand increases, we also observed an increased number of tape-outs in 2015. And those tape-outs will mostly be produced in 2016. Most of the new tape-outs are on TSMC's latest addition to 28-nanometer family, namely 28-HPC and 28-HPC Plus.

除了晶圓需求增加之外，我們還觀察到2015年流片數量也有所增加。這些流片大部分將在 2016 年完成。大部分新流片都涉及台積電 28 奈米系列的最新成員，即 28-HPC 和 28-HPC Plus。

TSMC's 28-HPC and 28-HPC Plus offer higher performance and lower power consumption as compared with previous solutions. It is suitable for applications in smartphone, digital TV, consumer and networking products. In addition, due to the -- its low power characteristic, customers are able to design their product for low-voltage applications, which are very important for the IoT devices.

台積電的 28-HPC 和 28-HPC Plus 與先前的解決方案相比，效能更高、功耗更低。它適用於智慧型手機、數位電視、消費性電子和網路產品的應用。此外，由於其低功耗特性，客戶能夠為低電壓應用設計他們的產品，這對物聯網設備非常重要。

In summary, TSMC's 28-nanometer technologies are highly competitive in both technology and cost. We are confident that our 28-nanometer will contribute to -- significantly to 2016 revenue. And we expect to maintain or even expand our market segment share at this node.

綜上所述，台積電28奈米技術無論從技術或成本上都具有很強的競爭力。我們相信，28 奈米技術將為 2016 年的收入做出重大貢獻。我們希望在此節點上保持甚至擴大我們的市場份額。

Now 16-nanometer. We have successfully ramped up the production of 16-nanometer starting third quarter last year with very fast pace. Manufacturing indices, such as the yield and cycle time, were achieved three to four months sooner than our 20-nanometer node and are ahead of plan.

現在是16奈米。從去年第三季開始，我們已成功以非常快的速度提高了 16 奈米的生產。產量和週期時間等製造指標比我們的20奈米節點提前三到四個月實現，並且提前於規劃。

In addition to 16-FinFET Plus, in fourth quarter last year we have completed the development of 16-FFC, the low-power and low-cost version for the 16-nanometer process.

除了16-FinFET Plus，去年第四季我們還完成了16奈米製程的低功耗、低成本版本16-FFC的開發。

TSMC's 16-FFC incorporates the process simplification and optional optical shrink for further die cost reduction. It also shares the same design rule with 16-FF Plus, so customer can directly transfer their product to 16-FFC. As a result, we expect 16-FFC will enter volume production in this quarter.

台積電的 16-FFC 採用了製程簡化和可選的光學微縮，以進一步降低晶片成本。它還與 16-FF Plus 共享相同的設計規則，因此客戶可以直接將其產品轉移到 16-FFC。因此，我們預計 16-FFC 將在本季投入量產。

As customer accelerated their technology migration into 16-nanometer node, we anticipate a significant demand drop in 20-nanometer in 2016. However, we also expect a continual ramp-up of 16-nanometer this year and expect it to contribute more than 20% of wafer revenue in 2016.

隨著客戶加速向 16 奈米節點的技術遷移，我們預計 2016 年 20 奈米的需求將大幅下降。不過，我們預計今年 16 奈米技術將持續發展，並預計將為 2016 年晶圓收入貢獻 20% 以上。

We estimate our foundry market segment share of 16/14-nanometer node increases from about 50% in 2015 to above 70% in 2016, exceeding the previous prediction we made in mid-2014.

我們預計，我們的 16/14 奈米節點代工市場份額將從 2015 年的 50% 左右增長至 2016 年的 70% 以上，超過我們在 2014 年中期做出的預測。

Now let me talk about InFO. We have successfully completed InFO process installation in the new Longtan site and are in product qualification stage right now. We are on track to start InFO volume production in second quarter 2016. Because of the very custom nature of our current-generation InFO technology, we do not expect adoption by a large number of customers. However, we do expect a few very large-volume customers.

現在我來談談 InFO。我們已成功完成龍潭新工廠的 InFO 製程安裝，目前正處於產品認證階段。我們預計將於 2016 年第二季開始 InFO 批量生產。由於我們目前一代 InFO 技術的高度客製化性，我們並不期望被大量客戶採用。然而，我們確實預計會有少數大批量客戶。

The majority of InFO applications are for mobile devices, including IoT products. While we are ready for the first generation InFO volume production, we are also developing next-generation InFO technologies for better performance and lower cost.

大多數 InFO 應用程式都是用於行動設備，包括物聯網產品。在我們為第一代 InFO 量產做好準備的同時，我們也在開發下一代 InFO 技術，以實現更好的性能和更低的成本。

In summary, we believe TSMC's InFO technology can enhance our customers' products in performance and lower the products' power consumption. Our expectation of InFO contributing more than $100m quarterly revenue in 4Q this year remains unchanged.

綜上所述，我們相信台積電的InFO技術可以提升我們客戶產品的效能，並降低產品的耗電量。我們對今年第四季 InFO 貢獻超過 1 億美元季度營收的預期保持不變。

Now let me talk about the specialty technology and IoT. We believe IoT-related application will be an important part of semiconductor growth in the future. In order to capture the opportunity of IoT business, TSMC has been developing technologies that fit IoT product requirements, such as high-speed computation, just mentioned by Mark, ultra-low-power transistors, sensors in many kinds, connectivity, and etc.

現在我來談談專業技術和物聯網。我們相信物聯網相關應用將成為未來半導體成長的重要組成部分。為了掌握物聯網商機，台積電也不斷研發符合物聯網產品需求的技術，例如剛才馬克提到的高速運算、超低功耗電晶體、多種感測器、連網技術等等。

Some examples I would like to share with you here. First, we are developing process to meet automotive standard for smart cars. We also developed the most advanced CMOS image sensor with multi-million contact between the stacked chips. We have delivered the smallest footprint image sensor for various applications. We have developed the ultra-low-power Bluetooth solution for connectivities.

我想在這裡與大家分享一些例子。首先，我們正在開發滿足智慧汽車標準的流程。我們也開發了最先進的CMOS影像感測器，堆疊晶片之間有數百萬個接觸。我們為各種應用提供了尺寸最小的影像感測器。我們已經開發了用於連接的超低功耗藍牙解決方案。

Specialty technologies are an important part to TSMC revenue. In 2015, more than 70% of TSMC's 8-inch wafer business was contributed by our specialty technologies. We have also observed the increasing demand of our 12-inch wafer business has been contributed by specialty technology as well. We expect the trend will continue in the near future -- in the future.

特殊技術是台積電收入的重要組成部分。2015年，台積電8吋晶圓業務的70%以上是由特色技術所貢獻。我們也觀察到，12吋晶圓業務的需求不斷成長也得益於特種技術。我們預計這一趨勢將在不久的將來持續下去。

Thank you for your attention. Now I turn the podium to Lora.

感謝您的關注。現在我將講台轉向 Lora。

I have a few comments to make. Let me start with CapEx. Our CapEx for 2016 is expected to be between $9b to $10b, representing a 10% to 20% increase year over year. About 70% of the capital budget will be used for capacity build-up for the leading-edge technology, majority 10-nanometer, and R&D CapEx.

我有幾點評論。讓我先從資本支出 (CapEx) 開始。我們 2016 年的資本支出預計在 90 億美元至 100 億美元之間，年增 10% 至 20%。約 70% 的資本預算將用於尖端技術（大部分為 10 奈米）的產能建設和研發資本支出。

Of the $9b to $10b number, about 10% will be used for backend, mainly InFO, and 5% for China fab. With this CapEx our 2016 capacity will increase by about 10%.

在90億到100億美元中，約10%將用於後端，主要是InFO，5%用於中國晶圓廠。加上這筆資本支出，我們2016年的產能將增加約10%。

To talk about TSMC's structural profitability, TSMC's structural profitability is measured by its standard gross margin rate, SGM, which refers to a gross margin calculated at 85% utilization rate. In the past few years, TSMC has been able to steadily increase our SGM from the mid-40s level to a high-40s level despite higher CapEx, which led to a substantial increase in depreciation expenses.

要說台積電的結構性獲利能力，台積電的結構性獲利能力是以其標準毛利率SGM來衡量的，SGM是指以85％利用率計算的毛利率。過去幾年，儘管資本支出增加，導致折舊費用大幅增加，但台積電仍能穩步將我們的 SGM 從 40% 中段水準提高到 40% 高的水平。

The improvement of our structural profitability is mainly due to the following. First, very careful planning and build-out of capacity. Second, intensive cost reduction through productivity improvement and the better asset effectiveness. We are confident that we will be able to continue increasing our SGM in 2016.

我們結構性獲利能力的改善主要歸功於以下幾點：首先，非常謹慎地規劃和建造產能。二是透過提高生產效率、提高資產效率，降低成本。我們有信心在 2016 年繼續提高我們的 SGM。

Now a few comments about China investment. On December 7 last year, we submitted the application to the Investment Commission of Taiwan's Ministry of Economic Affairs for an investment project to build a wholly owned 12-inch wafer manufacturing facility and a design service center in Nanjing, China.

現在就中國投資發表幾點評論。去年12月7日，我們向台灣經濟部投資審議委員會提出在中國南京獨資興建12吋晶圓製造廠及設計服務中心的投資計畫。

The main purpose for this investment project is to enhance our access to business opportunities in China market. With the establishment of a 12-inch wafer fab and a design service center in China, TSMC will be able to provide closer support to our customers in China and to extend our ecosystem to that market. We will commence the investment project upon receiving the approval from the Investment Commission.

此項投資項目的主要目的是增強我們在中國市場的商業機會。隨著在中國建立12吋晶圓廠和設計服務中心，台積電將能夠為中國客戶提供更緊密的支持，並將我們的生態系統擴展到該市場。我們將在獲得投資委員會的批准後啟動投資項目。

My last comment is about the dividend. As you remember, our dividend policy is a sustainable and trending to increase cash dividend per share. With our healthy free cash flow, we are considering an increase of cash dividend in 2016.

我的最後一條評論是關於股息的。正如您所記得的，我們的股利政策是可持續的，並且趨於增加每股現金股利。鑑於我們擁有健康的自由現金流，我們正在考慮在 2016 年增加現金流。

This concludes my remark. Thank you.

我的評論到此結束。謝謝。

All right. This concludes our prepared statements. Before we begin the Q&A session, I would like to remind everybody to limit your questions to two at a time to allow all participants an opportunity to ask questions.

好的。我們的準備好的聲明到此結束。在我們開始問答環節之前，我想提醒大家每次提問的次數限制為兩個，以便所有參與者都有機會提問。

Questions will be taken both from the floor and from the call. Should you wish to raise your questions in Chinese, I will translate that to English before our management answers your question. (Conference Instructions).

問題將從現場和電話中回答。如果您想用中文提出問題，我會將其翻譯成英文，然後我們的管理層會回答您的問題。（會議指示）。

Today's Q&A session is hosted by our Chairman, Dr. Morris Chang. The Chairman will answer some of your questions and will pass the rest to the Co-CEOs or the CFO. So we'll begin the Q&A.

今天的問答環節由我們的董事長張忠謀博士主持。董事長將回答您的部分問題，並將其餘問題轉交給聯合執行長或財務長。那我們開始問答環節。

All right. I think we will let Credit Suisse, Randy Abrams, to ask the first question.

好的。我認為我們應該讓瑞士信貸的蘭迪艾布拉姆斯來提出第一個問題。

Yes. Thank you. The first question -- congratulations first on last year and also a good outlook for the coming year.

是的。謝謝。第一個問題──首先要祝賀去年，也展望來年。

The first quarter, it seems like it's holding up relatively well, factoring in some of the high-end smartphone weakness. I guess if you can go through just what's driving the strength. How much is TSMC-specific as far as share gains or how much is coming from end markets or from other end markets outside of smartphone?

第一季度，儘管受到部分高階智慧型手機銷售疲軟的影響，但其表現似乎相對良好。我想如果你能弄清楚究竟是什麼推動了這種力量。就份額成長而言，有多少是台積電獨有的，有多少是來自終端市場或智慧型手機以外的其他終端市場？

And off this higher first quarter, what's your expectation for continued improvement in second quarter, because last year first quarter held up well, but then we saw a slowdown after that. If you think there's any inventory build again in the first quarter this year.

那麼在第一季表現較好的基礎上，您對第二季的持續改善有何預期？因為去年第一季表現良好，但隨後就出現放緩。如果您認為今年第一季庫存再次增加。

You are asking, Randy, why is the first quarter holding up for us?

蘭迪，你問的是，為什麼第一季我們的表現如此出色？

Yes, why the first quarter is holding up. And then if you fare with this strength, how you expect the next couple of quarters, if it could be the start of another build.

是的，這就是為什麼第一季表現強勁。如果您擁有這種實力，那麼您對接下來幾季的預期如何，這是否會成為新一輪建設的開始。

Well actually, I wasn't surprised by our first quarter. You seem to be saying that it's holding up while the market's not holding up. I really think that if we have gained any share in the first quarter -- if we gain any share in the first quarter, I think it will not be significant.

事實上，我對我們的第一季的表現並不感到驚訝。您似乎是在說，它堅持住了，而市場卻沒有堅持住。我真的認為，如果我們在第一季獲得了任何份額——如果我們在第一季獲得了任何份額，我認為這不會是顯著的。

I think that's the way the foundry market will be in the first quarter, at least as far as I can see now. I don't think we have any -- nor will we be losing any share. I suspect that we may be gaining a little share in the first quarter, but I don't think it's significant.

我認為第一季的代工市場將會是這樣的，至少就我目前所見是如此。我認為我們不會失去任何份額。我預計我們在第一季可能會獲得一點份額，但我認為增幅並不大。

As to what sectors, well, the same sectors that we do our business in. Communication of course is the big one. Mobile products I think is a big one. Then I think Lora has told you, consumer and then -- I don't see anything unusual. Well, actually, markets talk about the end of inventory, of surplus inventory. We think that at the end of the fourth quarter, although the numbers are not out yet, but we think that at the end of the fourth quarter inventory is -- supply chain inventory is already, what, about 2 days, 2 days below seasonal.

至於哪些領域，嗯，與我們開展業務的領域相同。當然，溝通才是最重要的。我認為移動產品是其中最重要的一個。然後我想 Lora 已經告訴過你了，消費者 - 然後我沒有看到任何不尋常的。事實上，市場正在談論庫存和過剩庫存的終結。我們認為，在第四季末，雖然數字尚未公佈，但我們認為，在第四季末，供應鏈庫存已經比季節性庫存少了約 2 天。

So because of that, I really, for a while, expect the first quarter to be stronger than what we are forecasting now. But the way we are forecasting it now is pretty much, pretty normal seasonally. If you look at our past couple or three years' record, I think the first quarter was always -- has always been a bit, a few percentage points below the fourth quarter. I don't know, as far as I can see, I think we're managing the Company well. But I don't think that's unusual.

因此，我確實在一段時間內預計第一季的表現將比我們現在預測的更強勁。但我們現在的預測方式基本上是季節性的正常預測。如果你看看我們過去幾年或三年的記錄，我認為第一季的業績總是比第四季低幾個百分點。我不知道，據我所知，我認為我們管理公司很好。但我並不認為這有什麼不尋常的事。

I'll ask the follow-up on two technologies. I think there's some change. 16-FFC, which is a lower cost, I think you mentioned it's actually in production this quarter, if I heard right. And if you could talk about how meaningful because that will lower cost on 16, in getting customers to migrate from 28 to 16, if you see a more meaningful ramp of that node through this year.

我將詢問有關兩種技術的後續情況。我認為有一些變化。16-FFC 成本較低，如果我沒聽錯的話，我記得您提到過它實際上已經在本季度投入生產。並且您可以談談這有多大意義，因為這將降低 16 的成本，讓客戶從 28 遷移到 16，如果您看到該節點在今年有更有意義的提升。

But the other side, InFO, it felt like last quarter you were talking about more customers beyond the high-volume application. If you're seeing some delays or change in other customers or additional customers adopting InFO.

但另一方面，InFO，感覺上個季度您談論的是超出大容量應用程式的更多客戶。如果您發現其他客戶或其他採用 InFO 的客戶出現延遲或變更。

About the InFO or on the 16?

關於 InFO 還是 16 號？

It was a two-part question.

這個問題由兩個部分組成。

I know. The first part I know is about the 16.

我知道。我知道的第一部分是關於16的。

FFC.

FFC。

16-FFC. And the second part is InFO, right, where you asked about whether more customers are using something?

16-FFC。第二部分是 InFO，對吧，您詢問是否有更多客戶正在使用某種產品？

16-FFC -- that's right, InFO. InFO customers.

16-FFC——沒錯，InFO。InFO 客戶。

Okay. C.C., would you answer the question?

好的。C.C.，你能回答這個問題嗎？

16-FFC first. You, Randy, you ask whether it is a meaningful cost reduction or something like that, lower cost.

首先是 16-FFC。蘭迪，你問這是否是有意義的成本削減或類似的東西，更低的成本。

Actually a meaningful ramp, if you expect a meaningful ramp, migration from 28 to 16.

事實上，如果您期待一個有意義的上升，那麼從 28 遷移到 16。

Yes, it's a meaningful ramp.

是的，這是一個有意義的坡道。

Through this year?

今年過去了嗎？

Yes, this year. Did that answer your question?

是的，今年。這回答了你的問題嗎？

I suppose, yes.

我想是的。

Okay.

好的。

I think his question was whether it's already in production, 16-FFC.

我認為他的問題是 16-FFC 是否已投入生產。

Yes.

是的。

So it's a pull in by a few quarters.

因此，這是一個幾季的拉動。

And it is actually faster than we thought because of very successful technology introduction and using the same design rule, we don't have to change any design architecture or design ecosystem. So it's just a few minor characterization that was necessary. But it's okay. So it's a meaningful volume production.

但實際上，由於技術的引入非常成功，並且使用相同的設計規則，我們不必改變任何設計架構或設計生態系統，因此它的速度實際上比我們想像的要快。因此，只需要進行一些次要的描述。但沒關係。因此這是一次有意義的大量生產。

Now InFO, this is -- the last time I reported that, so we have a lot of customers working with us on the InFO application to their own -- to their products. The cooperation continues. Again if it is a -- InFO early stage is very customer-specific. Your layout, your die size, your application, your requirement on the total thickness is all different.

現在，這是我上次報告的 InFO，因此我們有很多客戶與我們合作將 InFO 應用到自己的產品中。合作仍在繼續。再一次，如果是--InFO 早期階段是非常針對客戶的。您的佈局、您的晶片尺寸、您的應用、您對總厚度的要求都是不同的。

So now we are focused on very large-volume customers because we want to ramp it up quickly. And other application right now we are going to introduce in the new generation with lower cost and better performance.

因此，現在我們專注於大量客戶，因為我們想快速提升業務量。現在我們將推出成本更低、性能更好的新一代其他應用程式。

Timing for the new generation?

新一代的時機已經到來？

Next year.

明年。

Next year. Okay. Thank you.

明年。好的。謝謝。

Then the second -- well, we'll go to Deutsche Bank, Michael Chou for the second question.

然後第二個問題——好吧，我們將請德意志銀行的 Michael Chou 來回答。

Thank you. The first question is regarding your 7-nanometer progress, it seems like you can enter 7-nanometer mass production in the first half 2018. Is that correct?

謝謝。第一個問題是關於你們7納米的進展，好像你們可以在2018年上半年進入7納米量產。那正確嗎？

Mark?

標記？

We will -- that's correct. Yes, that's correct.

我們會的 — ​​— 沒錯。是的，正確。

So does that mean that you will be ahead of all your competitors by at least one year in terms of mass production schedule?

那麼這是否意味著你們在量產計劃上將比所有競爭對手領先至少一年？

I do not -- well each company's technology may be different, so each company have their own product road map. So we don't compare just by the dates. It also depends on the content of those technologies. But that's our schedule if -- and that fits to our customers' product development.

我不知道——每家公司的技術可能不同，所以每家公司都有自己的產品路線圖。因此我們不能僅根據日期進行比較。這也取決於這些技術的內容。但這就是我們的計劃，如果這適合我們客戶的產品開發的話。

Can we say your 7-nanometer performance will be ahead of all your competitors? Your 7-nanometer performance would be ahead of your competitor given that your timeframe will be quicker.

我們是否可以說你們的 7 奈米性能將領先所有競爭對手？由於你們的時間表更快，你們的 7 奈米性能將領先於競爭對手。

I wouldn't want to comment on this. We don't know the competitors' specific numbers.

我不想對此發表評論。我們不知道競爭對手的具體數字。

Okay. Second question is regarding the EUV in 5-nanometer. You highlight that it could be adopted, EUV could be adopted for EUV for 5-nanometer mass production. So will that help you expand your addressable market in 5-nanometer versus 7-nanometer or will that be bigger for 5-nanometer TAM, versus 7-nanometer if you can use EUV?

好的。第二個問題是關於 5 奈米的 EUV。您強調說可以採用，EUV 可以用於 5 奈米大規模生產。那麼，這是否會幫助您擴大 5 奈米而不是 7 奈米的潛在市場，或者如果您可以使用 EUV，那麼 5 奈米的 TAM 是否會比 7 奈米更大？

You mean the demand?

你指的是需求嗎？

For demand. Since that smaller IC house can use EUV, if you can -- I mean if you can use EUV for 5-nanometer, can we say that?

為了需求。由於較小的 IC 公司可以使用 EUV，如果可以的話——我的意思是如果您可以將 EUV 用於 5 奈米，我們可以這麼說嗎？

Your question is will EUV improve the -- increase the demand of our 5-nanometer?

你的問題是，EUV 是否會改善——增加我們對 5 奈米的需求？

Yes, versus 7-nanometer, given that 7-nanometer will not use EUV.

是的，與 7 奈米相比，因為 7 奈米不會使用 EUV。

It's hard to compare because these two technology, the purpose we use EUV to -- is to simplify the process flow, therefore the yield can be higher. Secondly is to reduce the cost if the EUV's source development is according to that plan, to current plan. So for both factors, it will help our 5-nanometer, both yield and cost. And if you translate that into demand, I think that's enable more affordability of the 5-nanometer.

很難比較，因為這兩種技術，我們使用 EUV 的目的在於——簡化製程，從而提高產量。其次，如果EUV的源開發按照該計劃、按照當前計劃進行，則可以降低成本。因此，從這兩個因素來看，它將有助於我們的 5 奈米產量和成本。如果將其轉化為需求，我認為這將使 5 奈米更加實惠。

Any way you can disclose your average output for your EUV a day now?

現在您可以揭露一下您的 EUV 每天的平均產量嗎？

Okay. EUV, we are working on the second-generation EUV tools. And we are installing our third generation EUV tools. And for the EUV, currently for the tool we have, we try to improve the reliability of the tools. And that is from the cost. We run several hundred wafers a day continuously so that we can debug the tools, and that will prevail for quite some time to do that.

好的。EUV，我們正在研發第二代 EUV 工具。我們正在安裝第三代 EUV 工具。對於 EUV，對於我們目前擁有的工具，我們會嘗試提高工具的可靠性。這是從成本角度而言的。我們每天連續運行數百個晶圓，以便我們能夠調試工具，並且這將持續相當長一段時間。

What kind of output do you expect that you can use the EUV for the 5-nanometer mass production?

您期望使用 EUV 進行 5 奈米量產可以達到什麼樣的產量？

At what time, you mean?

你是指什麼時候？

In one day, in average.

平均一天。

Okay. At this time we are -- we have demonstrated 500 wafer per day every day for over a period of time of a full months. So that was the demonstration. Then the rest we are working on. We don't push to extreme of the move, but rather we focus on the reliability of the tools. So the demonstrated is 500 wafer per day.

好的。目前，我們已經在一個月的時間內每天示範生產 500 片晶圓。這就是示威活動。接下來我們正在處理其餘的事情。我們不會將舉措推向極端，而是注重工具的可靠性。所以示範的是每天500片晶圓。

So does that mean if you can demonstrate that stably over the next 12 months, you will use that for 5-nanometer mass production? Can we say that or --?

那麼，這是否意味著如果您能在未來 12 個月內穩定地證明這一點，您就會將其用於 5 奈米的大規模生產？我們可以這麼說嗎？或者——？

Yes. Yes.

是的。是的。

Thank you.

謝謝。

All right. The next question comes from the floor, and that will be from Citigroup's Roland Shu.

好的。下一個問題來自現場，由花旗集團的 Roland Shu 提出。

Thank you to taking my question. Happy New Year, Chairman and CEOs. I think that my first question --.

感謝您回答我的問題。祝董事長和執行長們新年快樂。我認為我的第一個問題是——。

Same to you.

你也一樣。

Thank you. First question is that you started your 28-nanometer with almost no competition in the market at that time. However, for last year when you started 16-nanometer, I think that we had a big competitor in the market. So the question is that when now we are moving to 10-nanometer, how do you think about the competition landscape will be? Will it be more like 28-nanometer or it's more like 16-nanometer last year? Thank you.

謝謝。第一個問題是，當你們開始研發 28 奈米技術時，市場上幾乎沒有任何競爭。然而，去年當你們開始採用 16 奈米技術時，我認為我們在市場上有一個很大的競爭對手。所以問題是，當我們轉向 10 奈米時，您認為競爭格局將會如何？它會更像 28 奈米還是更像去年的 16 奈米？謝謝。

The last part of your question, say it again.

你問題的最後部分，再說一次。

So when you migrate, when we start 10-nanometer mass production in -- at end of this year, how do you think about the competition landscape? Will it's more like 28-nanometer or more like 16-nanometer?

那麼，當我們在今年年底開始 10 奈米大規模生產時，您如何看待競爭格局？它會更像 28 奈米還是更像 16 奈米？

Well, on 10-nanometer, we intend to begin with a very high market share. We will intend to begin with a very high market share. And we intend not to lose it.

在 10 奈米方面，我們打算從非常高的市場份額開始。我們的目標是從非常高的市場佔有率開始。我們不想失去它。

Okay. Understood. So and then a follow-up question would be, Chairman, you comment for 16-nanometer this year --.

好的。明白了。那麼，接下來的問題是，主席，您對今年的 16 納米有何評論——。

Foundry. Foundry market share anyway.

鑄造廠。無論如何，代工市場佔有率。

Yes. Yes. Understood.

是的。是的。明白了。

Yes. What's your next question?

是的。您的下一個問題是什麼？

I think the Chairman's comment on 16-nanometer this year is having bigger market share in a much bigger market.

我認為董事長今年對 16 奈米的評論是在更大的市場中擁有更大的市場份額。

I think C.C. said 70% foundry market share.

我認為是 C.C.該公司稱其佔據了70%的代工市場份額。

70% for the 16-nanometer?

16奈米是70％嗎？

Didn't you?

不是嗎？

Yes, above.

是的，以上。

Above 70%, he said.

他說，超過 70%。

Okay. Understood. But that one, is it a much bigger market share you thought two quarters ago, above 70%?

好的。明白了。但是，您認為兩個季度前它的市場份額會更大嗎，超過 70%？

I didn't understand your question.

我不明白你的問題。

You said you expect much bigger market share. So this 70% is -- did this beat your expectation then?

您說過您期望佔有更大的市場佔有率。那麼這 70% —— 這超出了您的預期嗎？

I think it exceeded the prediction we made a year and a half ago. As far as what I was expecting a year and a half ago, I don't even remember myself.

我認為它超出了我們一年半前的預測。至於我一年半前期望什麼，我自己都不記得了。

Understood. Okay. Thank you. Then the second question is to Lora. I think in October you -- at that time you commented about the investment, 12-inch investment in China, you think the manufacturing cost will be higher in China than in Taiwan. So at that time you said TSMC was still evaluating the investment in China. However, I think in December you decided to set up a plant and also design center in China. So what has changed during these two months for you to decide to invest in China? Thank you.

明白了。好的。謝謝。那麼第二個問題是問Lora的。我記得十月您曾經評論過關於在中國的12吋投資，您認為中國的製造成本會高於台灣。所以當時你說台積電仍在評估在中國的投資。不過，我認為你們在 12 月就決定在中國建立一家工廠和設計中心。那麼這兩個月發生了哪些變化，促使您決定在中國投資？謝謝。

The cost doesn't change in two months. Okay? The cost in China will be still higher than Taiwan on an apple-to-apple basis. I think we have stated the purpose for us to put a 12-inch fab in China is to pursue the potential market growth. This is the main reason for us to invest in China.

兩個月內成本沒有變動。好的？若以同等條件計算，中國的成本仍將高於台灣。我想我們已經表明過，在中國設立12吋晶圓廠的目的是為了追求潛在的市場成長。這是我們在中國投資的主要原因。

So at that time, I think we are still evaluating. And we are also in discussions with the China part -- counterpart. And early December we have pretty much finished the discussion. And we made a decision to go ahead with the application for set up a 12-inch fab and the design center.

所以我認為當時我們仍在評估。我們也正在與中方對應部門進行討論。12 月初，我們基本上結束了討論。並決定繼續申請建立12吋晶圓廠和設計中心。

So how about the ROI for the investment in China? So is that would be low -- much below corporate average? Or that probably would be improved over time. Is that right?

那麼在中國投資的投資報酬率如何？那麼這個數字是否很低──遠低於企業平均？或者可能會隨著時間的推移而改善。是嗎？

For a case like this, we don't measure ROI. Okay? We just know that for manufacturing part, because the scale is smaller and the costs will be higher, but we hope it can be compensated by the market share gains, by doing more business in China.

對於這種情況，我們不會衡量投資報酬率 (ROI)。好的？我們只知道，對於製造部分，由於規模較小，成本會較高，但我們希望透過在中國開展更多業務，獲得更大的市場份額來彌補這一缺陷。

Well we do measure ROI, even in this case. But remember, our first priority, the rationale, let's say, of setting up a 16 FinFET plant in China is to enhance our access to the growing Chinese market. So while we do measure the ROI of the plant there, you also have to take into account that the increased sales that this plant is going to bring to us.

即使在這種情況下，我們也會衡量投資報酬率。但請記住，我們的首要任務，在中國建立 16 FinFET 工廠的理由是為了增強我們進入不斷增長的中國市場的管道。因此，當我們衡量那裡工廠的投資報酬率時，你也必須考慮到該工廠將為我們帶來的銷售額成長。

And -- but to answer your question simply, we still measure the ROI. But the ROI, well, since the investment is relatively small, frankly, and we don't -- we put it really second to the increased sales that it will bring in, yes, that this plant will bring in.

而且—但簡單回答你的問題，我們還是會衡量投資報酬率。但投資報酬率，嗯，坦白說，因為投資相對較小，我們不會把它放在第一位，而是放在這家工廠將帶來的銷售額成長之後。

Very clear. Thanks, Chairman.

非常清楚。謝謝主席。

Yes.

是的。

All right. Next question actually will be coming from a new analyst arriving at Barclays, and that's Bruce Lu. Bruce?

好的。下一個問題實際上來自巴克萊銀行的新分析師 Bruce Lu。布魯斯？

Thank you. Chairman, the question is that so basically the revenue guidance for 2016 is somewhere around 5% to 10%. But I do recall that earnings CAGR in the coming three, four years will be 10% and above. So which means do we expect some margin improvement this year? And what's more important is that as coming into 2017 or after, where -- when the 10-nanometer and 7-nanometer will play a much more important role, do we expect the earning growth coming from the top line or from the margin improvement?

謝謝。主席，問題是，2016 年的收入預期基本上是在 5% 到 10% 左右。但我確實記得未來三、四年的獲利複合年增長率將達到 10% 及以上。那麼這意味著我們預計今年的利潤率會提高嗎？更重要的是，進入 2017 年或之後，當 10 奈米和 7 奈米將發揮更重要的作用時，我們預期獲利成長是來自營業收入還是來自利潤率的提高？

All right. I think Bruce's question is if we guide 2016's growth being only 5% to 10%, but then we also said that our net profit will grow 10%. That was our five-year, whatever, objective. So his question is does this imply that we will have an improvement in margin? And whether this improvement coming from the top line or from the profitability?

好的。我認為布魯斯的問題是，如果我們預計 2016 年的成長僅為 5% 到 10%，但我們也表示我們的淨利潤將成長 10%。這就是我們的五年目標。所以他的問題是，這是否意味著我們的利潤率會提高？這種改善是來自於營業收入還是獲利能力？

Well --.

出色地 - 。

That's more for the -- 2016, well probably can you expect or do we expect some profitability improvement in 2016? And what's more important is moving to 2017, when 10-nanometer play a more important role.

那更多的是針對 2016 年而言，您可能期望或我們是否預期 2016 年的獲利能力會有所提高？更重要的是，進入 2017 年，10 奈米將發揮更重要的作用。

Okay.

好的。

Well, I'm sorry. He apparently clarified your interpretation, so I didn't get that. I understood what you said, but I don't --.

嗯，我很抱歉。他顯然澄清了你的解釋，所以我沒明白。我明白你所說的話，但是我不--。

The only difference is that he's thinking beyond 2016.

唯一的差別在於，他考慮的是2016年以後的事。

All right. He's thinking -- you are thinking beyond 2016 and you refer back to the earlier target that we set, that we will grow profit 10% a year. It's a good answer. And let me try to answer it now. Did I say it's a good answer or did I say it's a good question? It's a good question. It's a good question. Let me try to answer it now. We set that target in late 2014, I believe. We said that we want to grow. We said that in the next five years we want to grow profit, actually operating profit, not necessarily net income, operating profit 10% a year. And that was more than a year and a half ago, I believe.

好的。他想的是──你考慮的是2016年以後的情況，並回顧我們先前設定的目標，也就是每年利潤成長10%。這是一個很好的答案。現在讓我嘗試回答這個問題。我是否說過這是一個好答案，或者說這是一個好問題？這是個好問題。這是個好問題。現在讓我試著回答一下。我相信，我們是在 2014 年底設定這目標的。我們說我們想要成長。我們說過，在未來五年內，我們希望獲利成長，實際上是營業利潤，不一定是淨收入，營業利潤每年要成長 10%。我相信那已是一年半以前的事了。

Much has happened since then. Last year was a difficult year. I said 10% compounded annual growth rate. Now back when we set the target in late 2014, we were looking at a very good -- we thought we were looking at a very good 2015. Now 2015 turned out to be disappointing, as everyone knows. But we still managed to grow our operating profit by about 10%.

從那時起發生了很多事。去年是艱難的一年。我說的是10%的複合年增長率。當我們在 2014 年底設定目標時，我們預計 2015 年將會取得非常好的成績。眾所周知，2015年是令人失望的一年。但我們的營業利潤仍成長了約10%。

And 2016 will also be -- it will be -- I think it will be better than 2015. So we are at least mildly optimistic about 2016. So we have now, as Mark said, identified our growth in 2016 as 5% to 10%.

我認為 2016 年也會比 2015 年更好。因此，我們至少對2016年抱持著一定樂觀的態度。因此正如馬克所說，我們現在確定 2016 年的成長目標是 5% 到 10%。

Now, what he meant was revenue. But our -- but Lora also said that our structural profitability actually is still improving. So I'm saying now, while Mark meant revenue, I'm saying now that our operating profit will also grow 5% to 10% this year, hopefully 10%, or even hopefully, even more hopefully more than 10%. Okay?

現在，他的意思是收入。但我們的—但是 Lora 也說我們的結構性獲利能力實際上仍在改善。所以我現在說，雖然馬克指的是收入，但我現在說的是，我們的營業利潤今年也將增長 5％ 到 10％，希望是 10％，甚至希望，甚至希望超過 10％。好的？

So all right, what I'm saying is that we set the 10 percent compounded annual growth rate a year and a half ago, when things looked might brighter. Much has happened. But we still managed for one year, and it appears now we'll manage for the second year, of this five year, above 10%. But I'm not repeating my pledge, my prediction that 2017, 2018, 2019 will continue to grow at 10% a year. We -- I think that the likelihood of -- well, if you just look at the semiconductor market, the prediction about the future semiconductor full market, it's 2%, 3% a year for the next 5 or 10 years.

好吧，我的意思是，我們在一年半前設定了 10% 的複合年增長率，當時的情況可能更加光明。發生了很多事。但我們仍然成功度過了一年，而且現在看來，在這五年中的第二年，我們也能成功度過 10% 以上的成長。但我不會重複我的承諾，我預測2017年，2018年，2019年將繼續以每年10％的速度成長。我們 — — 我認為，如果你只看半導體市場，對未來半導體整個市場的預測是，未來 5 年或 10 年，每年的成長率為 2% 到 3%。

Well we have a premium. We have a growth premium. Now a year and a half ago, I thought our growth premium, our revenue and profit growth premium was at least 5%, because back then the prediction about the semiconductor growth was better than it is now.

嗯，我們有額外費用。我們擁有成長溢價。一年半前，我認為我們的成長溢價、我們的營收和利潤成長溢價至少為 5%，因為當時對半導體成長的預測比現在更好。

Now I still think we have a premium of some magnitude. But the -- you will hear from me sometime what our rolling five-year projection is. The last time you heard it was a year and a half ago. And so far we have fulfilled it, even though the circumstances were much more difficult than we thought they were going to be when we made the prediction, when we made the target. Did I answer your question?

現在我仍然認為我們有一定幅度的溢價。但是——您有時會聽到我談論我們的滾動五年預測。你上次聽到這個消息已經是一年半以前了。到目前為止，我們已經實現了目標，儘管情況比我們做出預測和製定目標時想像的要困難得多。我回答你的問題了嗎？

Yes. Thank you. Okay. My second question is that one of the best things TSMC did in past several generations is that 28-nanometer ramped up much faster than 40; 20 ramped up much faster than 28, and so did 16. That is -- can we expect that for 10-nanometer?

是的。謝謝。好的。我的第二個問題是，台積電在過去幾代中做的最好的事情之一是 28 奈米製程的發展速度比 40 奈米製程快得多； 20 的增長速度比 28 快得多，16 也是如此。也就是說——我們可以期待 10 奈米嗎？

Yes.

是的。

Thank you.

謝謝。

So that's nice; short and easy. Next question will come from the floor and it will be HSBC's Steven Pelayo.

那太好了；簡短而簡單。下一個提問者是匯豐銀行的史蒂文‧佩拉約 (Steven Pelayo)。

Let's start with Lora. 2011 I think is when you guys started this -- capital spending ticked up for 28-nanometer. I think you went up to 45% to 50% of revenue for a few years and dominated 28-nanometer. Now this year at 8b -- last year at 8b, this year up only 10% or more, is now, I think, in the 30%, 35% of revenue levels. So this is what's generating in the free cash flow and the potential for your higher dividend. But also what does it mean for your depreciation?

讓我們從 Lora 開始。我認為你們是在 2011 年開始這項工作的——28 奈米的資本支出有所增加。我認為你們幾年內的收入成長了 45% 到 50%，並且主導了 28 奈米技術。現在，今年的收入為 80 億美元——去年的收入為 80 億美元，今年的收入僅增長 10％或更多，我認為現在的收入水平為 30％、35％。這就是產生自由現金流和增加股利的潛力。但這對你的折舊又意味著什麼呢？

And I'd also like you to answer that question maybe in terms of if you did start that big 28-nanometer CapEx five years ago, is there a roll-off benefit that's going be starting happening soon as well?

我還想請您回答這個問題，如果您五年前就開始了 28 奈米的大規模資本支出，那麼是否也會很快開始產生滾存收益？

I can talk about depreciation for this year. With 9b to 10b, the growth will be smaller than last year. Last year I think it was 11%. This year we expect to be a mid to high single-digit, less than 10% growth.

我可以談談今年的折舊。90億到100億，成長幅度將小於去年。我認為去年是 11%。我們預計今年的成長率將達到中高個位數，低於 10%。

Growth in depreciation.

折舊增長。

Depreciation year-over-year growth.

折舊年增。

When you talk about growth, people usually associate positive meaning with -- this is a decrease of depreciation.

當談到成長時，人們通常會聯想到正面的意義——即折舊的減少。

Increase of depreciation, increase.

折舊增加，增加。

The growth of depreciation, the growth rate of depreciation is going to slow down.

折舊的成長，折舊的成長率將會放緩。

Mid to high single-digit. Yes. And your second question referred to -- because a couple of years ago we had very high capital expenditure. And after the five year it will be depreciated, that's true. That's true. I think in the next few years we are going to see a lot of tool that has gone through the depreciation period. That's right.

中高個位數。是的。您的第二個問題提到—因為幾年前我們的資本支出非常高。五年後它就會折舊，這是真的。這是真的。我認為在接下來的幾年裡我們將會看到很多已經經歷折舊期的工具。這是正確的。

Okay. Fair enough. And maybe if I could just get a quick follow up to C.C. To Randy's question, I actually wanted to know about 16-nanometer FinFET, FFC, ASP versus cost. Is this a higher-margin opportunity for you here?

好的。很公平。也許我可以快速跟進 C.C.對於 Randy 的問題，我實際上想了解 16 奈米 FinFET、FFC、ASP 與成本的情況。這對您來說是一個利潤更高的機會嗎？

I said it's a lower cost. I did not comment on the price. Alright.

我說成本較低。我沒有評論價格。好吧。

The margin opportunity for FFC versus FF -- FinFET Plus?

FFC 與 FF--FinFET Plus 相比的利潤機會如何？

Higher, yes. Well this actually -- Lora gave the answer, I think, in her structural profitability discussion. We've managed that very, very carefully. Structural profitability basically is projected price divided by projected cost, or whatever, just those two variables, and manage it that way.

是的，更高。嗯，實際上——我認為，洛拉在她的結構盈利能力討論中給出了答案。我們已經非常非常謹慎地處理了這個問題。結構盈利能力基本上是預計價格除以預計成本，或者其他任何數字，僅這兩個變量，並以此方式進行管理。

And actually I want to go back a little bit to the answer. I want to add to the answer I gave to Bruce. You said that he was new. He is new from --?

實際上我想稍微回顧一下答案。我想補充我給布魯斯的答案。你說他是新來的。他是新從--來的？

He was from CLSA, now jumping ship to Barclays.

他曾任職於里昂證券公司，現已跳槽至巴克萊銀行。

Barclays? Yes. Okay. And I really think the key factors, why do we have a premium on -- over semiconductor market growth? Why do we have a premium, meaning that our growth rate, our revenue growth rate, top-line growth rate is likely to be higher than the semiconductor market growth rate? It's because in two very simple words, it's because we are everyone's foundry. Being everyone's foundry has advantage of participating in the growth of whoever succeeds the best, wherever customer succeeds the best.

巴克萊？是的。好的。我確實在思考關鍵因素，為什麼我們對半導體市場的成長有溢價？為什麼我們有溢價，這意味著我們的成長率，我們的收入成長率，營業額成長率可能高於半導體市場的成長率？因為用兩個非常簡單的字來說，因為我們是每個人的代工廠。身為大家的代工廠，我們的優勢在於，只要客戶最成功，我們就能參與誰最成功者的成長。

We've participated in it and we have been everyone's foundry ever since -- well maybe not when we started up, but certainly for the last 10, 15 years we have been virtually everybody's foundry. And we intend to remain that way. Being everyone's foundry, fulfilling our mission of being the trusted technology and capacity provider to the IC industry, it means that whoever in our customer -- among our customers succeed the best, we participate in that success. That's why I think that we have a premium of growth over the total IC market.

我們參與其中，並且從那時起就成為了每個人的代工廠——好吧，也許不是在我們剛起步的時候，但可以肯定的是，在過去的 10 到 15 年裡，我們幾乎成為了每個人的代工廠。我們打算繼續保持這種狀態。作為每個人的代工廠，我們履行著成為積體電路產業值得信賴的技術和產能提供者的使命，這意味著無論我們的客戶中誰取得了最大的成功，我們都會參與其中。這就是我認為我們的成長速度高於整個 IC 市場的原因。

Now, let's talk about the bottom line. Now, that's where structural profitability comes in as important. And we want to manage it such that the bottom line grows proportionately with the top line. And so just keep that in mind. And we're improving it actually. We're improving the structural profitability. We're improving what we call the standard gross margin, as Lora said. And we have improved it by several percentage points in the last few years. It depends on -- in fact, if I -- I usually look back to six years ago. And since then we have improved by at least by 500 basis points. And we expected it to improve.

現在，我們來談談底線。現在，結構性獲利能力變得如此重要。我們希望透過這樣的管理，讓利潤和營收成正比成長。所以請記住這一點。事實上，我們正​​在改進它。我們正在提高結構性獲利能力。正如 Lora 所說，我們正在提高所謂的標準毛利率。過去幾年裡，我們已經提高了幾個百分點。這取決於——事實上，如果我——我通常會回顧六年前。自那時起，我們至少已經提高了 500 個基點。我們希望情況會有所改善。

Now, being everyone's foundry and maintaining or improving our structural profitability still further puts us in the right place. And while I cannot answer you at this moment that 2017, 2018, 2019 will still be 10% a year profit growth a year, I cannot answer that. But I'm just saying that I have my -- I put my trust in our ability to be those two things, to maintain, to do those two things. First, be everyone's foundry. And second, maintaining our structural profitability.

現在，作為每個人的代工廠，保持或提高我們的結構性盈利能力進一步使我們處於正確的位置。雖然我現在無法回答你2017年、2018年、2019年每年的利潤是否仍會增加10%，但我無法回答這個問題。但我只是說，我相信我們有能力實現這兩件事，有能力維持這兩件事，有能力做這兩件事。第一，成為大家的代工廠。第二，保持結構性獲利能力。

I'm sorry. Elizabeth, can I just quickly follow up on that? So if depreciation growth is slower, if you have higher margin, faster ramp of 16-nanometer FinFET compact, if you have currency tailwinds as well, if you have rising utilization rates, are we going to see a few quarters of above 50% gross margins this year? Or is that a natural ceiling? I don't know. I'm just curious.

對不起。伊莉莎白，我可以快速跟進這個問題嗎？因此，如果折舊成長速度較慢、利潤率較高、16 奈米 FinFET 緊湊型成長速度較快、貨幣順風順水、利用率上升，那麼我們今年是否會看到幾個季度的毛利率超過 50％？還是那是天然的天花板？我不知道。我只是好奇。

Well if things suddenly -- if demand suddenly surges and as a result our utilization suddenly goes up, yes, you will see 50%. But this is, in a restaurant, you care about the margin on your meal, right. But you care even more about filling the restaurant with customers. That's our utilization, you see? That's very, very important. Yes.

好吧，如果事情突然發生——如果需求突然激增，導致我們的利用率突然上升，是的，你會看到 50%。但是在餐廳裡，你關心的是餐費的利潤，對吧。但你更關心的是讓餐廳擠滿顧客。這就是我們的利用方式，你懂嗎？這非常非常重要。是的。

So, anyway, that also explains why we are -- Lora said it, we're very careful in building out capacity, in building up capacity. You don't want to rent a big hall for a restaurant and then not have enough customers. So that's why we are very careful in building capacity. And I have said that many times in the past. We don't build capacity unless we have a very high confidence that we will have customers using that capacity.

所以，無論如何，這也解釋了為什麼我們 — — 洛拉說，我們在建立產能時非常謹慎。您不會想租一個大廳作為餐廳，然後卻沒有足夠的顧客。這就是為什麼我們在能力建構方面非常謹慎。我過去已多次說過這一點。除非我們非常有信心會有客戶使用該產能，否則我們不會建立產能。

All right. Next comes -- questions comes from Goldman Sachs, Donald Lu.

好的。接下來是來自高盛的 Donald Lu 的提問。

Congratulations for a very good result. Two questions. One is on InFO. So for the InFO, we are talking about different road maps. Can we understand that for the same customer over the years with different generation, you are going to generate more revenue per customer per product? In other words, are you going to package more and more chips or doing something more so that you can generate more revenue per customer?

恭喜你取得了非常好的成績。兩個問題。一個是關於InFO。因此對於 InFO，我們正在討論不同的路線圖。我們是否可以理解為，對於多年來不同世代的同一個客戶，你將從每個客戶每種產品創造更多的收入？換句話說，您是否要封裝越來越多的晶片或做更多的事情以便為每個客戶創造更多的收入？

And then the second question is you will expand to other customers. So how can we forecast your InFO revenue growth in the years ahead?

第二個問題是你會擴展到其他客戶嗎？那麼我們該如何預測未來幾年的 InFO 收入成長？

And also just to confirm, the CapEx for InFO this year is 10% of the total CapEx? So that's almost double last year. So is that a leading indicator for your revenue growth?

另外要確認的是，今年 InFO 的資本支出佔總資本支出的 10% 嗎？這幾乎是去年的兩倍。那麼這是您營收成長的領先指標嗎？

Donald, you ask whether we package more chips or package more volume in the InFO business?

唐納德，你問我們在 InFO 業務中是否封裝了更多的晶片或封裝了更多的體積？

Yes, per package. In other words, you can charge more and more revenue per smartphone, per customer. Let's say for one iPhone you generate $1 this generation. Could that be $1.2, $1.3 the next generation? And how fast it will grow?

是的，每個包裹都有。換句話說，你可以向每個智慧型手機、每個客戶收取越來越多的收入。假設這一代 iPhone 能創造 1 美元的收入。下一代會是 1.2 美元、1.3 美元嗎？其成長速度有多快？

Okay. Let me answer that. We continue to improve the process and then coming out with the new generation of InFO technology. That will have more applications and certainly we expect the revenue will go up. Right? Profitability, that's our goal, of course. And so if you're asking whether that with the same customer we continue to migrate into the new generation, the answer is yes. And we are developing the technology that can be adopted by a lot of customers. Today we are not at that stage yet. Today it's a very specific, customized technology. Does that answer your question?

好的。讓我來回答這個問題。我們不斷改進流程，推出新一代 InFO 技術。這將有更多的應用，我們當然預計收入將會增加。正確的？盈利，當然，這是我們的目標。因此，如果你問我們是否會針對同一個客戶繼續遷移到新一代，答案是肯定的。我們正在開發可以被很多客戶採用的技術。今天我們還沒有到達那個階段。如今，它是一種非常具體的、客製化的技術。這回答了你的問題嗎？

Yes. And how can we predict the revenue growth pace of InFO? We have a base. It's over USD100m by Q4. And more than USD400m next year, or some --?

是的。那我們要如何預測InFO的營收成長速度呢？我們有一個基地。到第四季度，這一數字已超過 1 億美元。明年將超過 4 億美元，或一些——？

Yes. It will bemore than USD400m next year. And it will grow. But I cannot give you exact number because we are working still with -- we're working with our customers. Today we just can tell you that we have a few large-volume customers.

是的。明年將會超過4億美元。而且它會成長。但我無法給出確切的數字，因為我們仍在與客戶合作。今天我們只能告訴大家，我們有幾個大批量的客戶。

Okay. Thank you. Second question is for Chairman. You just talked about you want to capture and be present in China. But I noticed that TSMC has been generating 60%, 70% revenues from US customers over the years. But TSMC has never built a foundry -- there, you have a small foundry in the US.

好的。謝謝。第二個問題是問主席的。您剛才談到您想佔領中國並在中國發展。但我注意到，台積電多年來一直有60%、70%的收入來自美國客戶。但台積電從未建立過代工廠——在美國，只有一家小型代工廠。

That's right.

這是正確的。

What's the difference between China and US?

中國和美國有什麼不同？

Well that's because US and China are two different countries.

嗯，那是因為美國和中國是兩個不同的國家。

Well that we know. But for doing business, what's the point? They can come to Taiwan, it's even closer than US.

嗯，我們知道。但對於做生意來說這有什麼意義呢？他們可以來台灣，那裡比美國更近。

Well, I'm proud of the US. But, US and China are two different countries. Even the Chinese will tell you that; the Mainland Chinese, I mean. Yes. Did I answer that question? Did I answer your question?

嗯，我為美國感到驕傲。但是，美國和中國是兩個不同的國家。甚至中國人也會告訴你這一點；我指的是中國大陸的。是的。我回答了那個問題嗎？我回答你的問題了嗎？

I wish to hear more.

我希望聽到更多。

Well I should say that we have used the phrase that our objective is to enhance our access to the Chinese market. I've used that phrase -- we have used that phrase quite a few times. And I must say that we don't say that in vain. We say that with some degree of assurance from the authorities, some degree of assurance that building a plant there will indeed enhance our access to the Chinese market. And reversely, not building a plant there will not enhance.

嗯，我應該說我們曾經使用過這樣的說法：「我們的目標是加強我們進入中國市場的管道」。我已經用過這個短語——我們已經用過這個短語很多次了。我必須說，我們這樣說並非徒勞無功。我們說，在當局的某種程度的保證下，在當地建廠確實會增強我們進入中國市場的管道。相反，不在那裡建工廠也不會有發展。

Okay. Thank you.

好的。謝謝。

Yes.

是的。

All right. Next question comes from Daiwa's Rick Hsu.

好的。下一個問題來自 Daiwa 的 Rick Hsu。

Happy New Year, Mr. Chairman and all the management. My first question is about the capacity. I know Lora talked about this year capacity increase is about 10%. Could you give us more color in terms of breakdown, 28-nanometer, 20 and 16 in terms of year-on-year increase, some rough idea for these different technology nodes?

祝主席先生和全體管理人員新年快樂。我的第一個問題是關於容量。我知道 Lora 說過今年的產能成長約 10%。您能否提供我們更多細分細節，28奈米、20奈米和16奈米的年成長情況，以及這些不同技術節點的大致情況？

I will not give you a breakdown by each node. But what I can tell you is very big portion of our CapEx goes to 10-nanometer. So you can imagine a majority -- vast majority of the CapEx increase will be on the leading-edge technology.

我不會給你逐一細分的節點。但我可以告訴你的是，我們的資本支出很大一部分都用於 10 奈米。因此你可以想像，絕大部分資本支出的成長都將用於尖端科技。

He was asking about last year, 10% increase last year.

他問的是去年的情況，去年成長了 10%。

It's about this year, 10%? You were talking about this year?

大概是今年吧，10%？您說的是今年嗎？

Yes, I'm talking about this year.

是的，我說的是今年。

You want me to give you breakdown. Okay.

你想讓我給你分析一下。好的。

Yes, I just wanted to get some idea. I know your 20 should be declining, because this year 20-nanometer is not your focus. And 16 and 10 should increase a lot, and 28 maybe not much. But I just want to get some more color about how much increase or decrease by different technology node on a year-over-year basis.

是的，我只是想了解一下。我知道你的20應該會下降，因為今年20奈米不是你的重點。16 和 10 應該會增加很多，而 28 可能不會增加太多。但我只是想更詳細地了解不同技術節點的同比增幅或減幅。

What you said is correct. And we are not increasing any 20-nanometer. It will be migrated to 16 or 10-nanometer along the way. All the newly added capacity will be on 10-nanometer, as the vast majority capacity increase. Yes. And 16 will continue to increase. But we had a huge amount of CapEx last year for 16 build-out. But this year we still spend some money, but it's tailing capacity.

你說的對。我們不會增加任何20奈米。在此過程中它將遷移到 16 奈米或 10 奈米。所有新增產能都將以10奈米製程為基礎，因為絕大多數產能都在增加。是的。而且16還會繼續增加。但去年我們為 16 個項目的建設投入了巨額資本支出。但今年我們還是花了一些錢，但這是尾礦庫的產能。

I probably need to add that we also have productivity improvement in 16-nanometer. So that will give us capacity without spending much money.

我可能需要補充一點，我們在 16 奈米方面的生產率也有所提高。這樣我們就無需花太多錢就能獲得能力。

It's a very good point.

這是一個非常好的觀點。

Okay. Thank you so much. And my second question is I recently talked to some of your large-volume fabless customers. And it seems to me that they're complaining that even they migrate to 16-nanometer this year, they're not going to enjoy much cost saving on per-unit basis. So will you consider it, when you ramp up more 16-nanometer contribution, will you consider yield some pricing to your customers?

好的。太感謝了。我的第二個問題是，我最近與你們的一些大批量無晶圓廠客戶進行了交談。在我看來，他們抱怨的是，即使他們今年遷移到 16 奈米，他們也不會在單位基礎上節省太多成本。那麼，當您增加 16 奈米貢獻時，您會考慮向您的客戶提供一些定價嗎？

We did. And I'm not very sure that whom you talked to, but most of the customer enjoy that 16 FinFET, 16-nanometer performance and cost. All right?

我們做到了。我不太確定您和誰談過的，但大多數客戶都喜歡 16 FinFET、16 奈米的性能和成本。好的？

Thank you.

謝謝。

Next question comes from JPMorgan's Gokul Hariharan.

下一個問題來自摩根大通的 Gokul Hariharan。

Thank you. My first question is on compute, since you already mentioned compute as one of the biggest drivers, high-performance computing. Now just wanted to understand that a little bit further. The traditional understanding of compute has been it's been an X86 Intel-dominated market. So when we talk about compute growth, should we think about TSMC taking -- TSMC enabling some of your customers to take share from that market? Or is it completely greenfield areas where there's no standards, like automotive and stuff like that you mentioned?

謝謝。我的第一個問題是關於計算的，因為您已經提到計算是最大的驅動因素之一，即高效能運算。現在只是想進一步了解這一點。對運算的傳統理解是，它一直是 X86 Intel 主導的市場。因此，當我們談論計算成長時，我們是否應該考慮台積電的佔領——台積電使您的一些客戶從該市場奪取份額？或者它是完全沒有標準的綠地領域，例如您提到的汽車和類似的東西？

And since you mentioned this is a two-year kind of thing, where you start seeing growth coming through, could we have some quantification, if it's possible, in terms of what growth could be coming from compute as a segment? Right now I think what you define as compute is probably about 8% of revenues, 8% to 9% of revenues. That's my first question.

既然您提到這是一個為期兩年的事情，您開始看到成長，如果可能的話，我們能否對計算作為一個部分可能帶來的成長進行一些量化？現在，我認為您定義的計算大概佔收入的 8% 到 9%。這是我的第一個問題。

Okay. When you -- when we talk about computing, we're really not just including the data center and PC tablets. We also include the infrastructure as well as the edge computing devices. So our -- my definition of computing is, actually for TSMC, is more opportunity in the infrastructure and edge computing.

好的。當我們談論計算時，我們實際上不僅僅包括資料中心和個人電腦平板電腦。我們還包括基礎設施以及邊緣運算設備。所以我對運算的定義其實對於台積電而言，是在基礎設施和邊緣運算方面擁有更多的機會。

Among the edge computing I mentioned a couple of our innovator product advancement. One of them is I mentioned about cars. And that is an area of very active innovation we see. We work with our customers, working on it. And how far that product will come up is everybody's guess.

在邊緣運算中，我提到了我們的一些創新產品進步。其中之一就是我提到的汽車。我們看到這是一個非常活躍的創新領域。我們與客戶一起努力，共同實現這一目標。該產品的銷售量會如何還不得而知。

But if you want a paradigm, the semiconductor content of a car today is about 6 times of the average smartphones. And because of the innovation of that electronics in cars, we see this 6 times will increase to 10 times by the year of 2020. So that is the promising we see. And also that is very, very practical purposes for that to be proliferated. Yes. Okay.

但如果想要一個範例，今天汽車的半導體含量大約是一般智慧型手機的6倍。而且由於汽車電子設備的創新，我們預計到 2020 年這個數字將由 6 倍增加到 10 倍。這就是我們看到的希望。並且，這對於其推廣有著非常非常實際的目的。是的。好的。

And just a subset of that question, I think you mentioned about the ARM server efforts, of non-X86 server efforts. Could you give an update on what you're seeing on your customers' side, because I think until now that has been a very small proportion of the market. But we've seen ARM itself give pretty bullish guidance for 2020 in terms of 20% of the server market, etc. Could you give us some color in terms of what you're seeing, given that you're the foundry for pretty much everybody, as Chairman mentioned, in the ARM server market?

這只是該問題的一個子集，我認為您提到了有關 ARM 伺服器工作以及非 X86 伺服器工作。您能否介紹一下客戶方面的情況，因為我認為到目前為止，這只佔市場的一小部分。但我們已經看到 ARM 本身對 2020 年伺服器市場的 20% 佔有率給出了相當樂觀的預期。正如董事長所說，鑑於你們是 ARM 伺服器市場上幾乎所有產品的代工廠，您能否向我們介紹一下你們所看到的情況？

Okay. That's a tough question to answer. You know the datacenter and PC is a stronghold of a major player already. It's incumbent, very strong. And, however, the industry, many other players are looking for options at least. So we see. Our view is we see a lot of innovators, product innovators working in that area. And following that is only the industry estimates about how far the ARMs can move into the space.

好的。這是一個很難回答的問題。您知道資料中心和 PC 已經是主要參與者的據點。這是當務之急，非常強大。然而，該行業的許多其他參與者至少正在尋找選擇。所以我們明白了。我們看到很多創新者、產品創新者正在該領域工作。接下來只是業界對 ARM 能夠進入該領域的程度的估計。

And for the easier one, I think it will happen first in the tablet and PC. And I see, before 2020, range from 10% to 30%. It's in anybody's guess. But I just ensure you that a lot of innovators are working on that area and a lot of customers are looking forward to that happen.

就簡單來說，我認為這將首先在平板電腦和個人電腦上實現。我認為，在 2020 年之前，這個比例會在 10% 到 30% 之間。誰也不知道。但我向你們保證，許多創新者正在致力於這領域，許多客戶也期待這一點的發生。

Yes. My second question is one of your bigger customers is moving to a competitor for a flagship chip. I think that's very well-known right now.

是的。我的第二個問題是，你們的一個大客戶正在轉向競爭對手，購買旗艦晶片。我認為這一點現在非常著名。

One of our --?

我們的一個－？

One of your biggest fabless customers is moving to a competitor for a flagship chip this year. Now Chairman mentioned that in 2017 with 10 nanometer, you're going to start with extremely high market share and intend to keep that share. Could you share about -- could you think -- let us know what you're thinking is about winning back share in this customer, because historically we've seen whoever has left TSMC has come back maybe after one year, after one generation or two generations?

你們最大的無晶圓廠客戶之一今年將轉向競爭對手，生產旗艦晶片。董事長提到，2017 年隨著 10 奈米技術的推出，你們將以極高的市佔率起步，並且打算維持這一份額。您能否分享一下——您能否考慮——讓我們知道您是如何想贏回這個客戶的份額的，因為從歷史上看，我們看到離開台積電的人可能在一年後、一代或兩代之後又回來了？

We are thinking about it all the time. And I'm not going to tell you anything more than that.

我們一直在思考這個問題。我不會告訴你更多的事情。

Okay. So on the 10-nanometer side, so the confidence in terms of starting with extremely high market share, should we say this is going to be like higher than the 70%-plus market share you will have in 16-nanometer when you start in 2017?

好的。那麼就 10 奈米而言，從極高的市場份額開始，我們是否應該說這將高於 2017 年開始時 16 奈米的 70％以上的市場份額？

Not -- well I just don't want to be quantitative at this point. But actually that was how we started with almost every node. Now 16 turned out to be a discontinuity, 16. Yes. And we hated that. And so a year and a half ago I vowed that we will recover it, and we have recovered it. But we would rather not have the same thing happen again. So we want to put 10 back into where things were, where the order was before 16, yes.

不——好吧，我現在只是不想進行量化討論。但實際上，我們幾乎在每個節點都是這樣開始的。現在 16 變成了不連續的 16。是的。我們討厭那樣。所以一年半前我發誓我們要恢復它，現在我們也恢復了它。但我們不希望同樣的事情再發生。所以我們想把 10 放回原來的位置，也就是 16 之前的順序，是的。

Okay.

好的。

Okay.

好的。

All right. I think we should go to the call. Operator, please have the next caller on the line.

好的。我認為我們應該接電話。接線員，請接聽下一位來電。

Brett Simpson, Arete Research.

Arete Research 的 Brett Simpson。

Thanks. Thanks very much. I just had a question on smartphones. Can you talk about what growth you saw from smartphones in 2015 and how you see this trending in 2016, building on the rising silicon per unit that you see?

謝謝。非常感謝。我剛剛對智慧型手機有疑問。您能否談談 2015 年智慧型手機的成長情況，以及基於單位矽片價格的上漲，您認為 2016 年智慧型手機的趨勢如何？

Is he asking about the market or is he asking about TSMC?

他是在問市場，還是在問台積電？

I think, Brett, you were asking about the market, right?

布雷特，我想你問的是市場狀況，對嗎？

Yes, TSMC.

是的，台積電。

Okay.

好的。

No, no. Sorry, I'm asking about TSMC.

不，不。抱歉，我問的是台積電的狀況。

TSMC.

台積電。

TSMC smartphone, yes.

台積電智慧型手機，是的。

TSMC's smartphone growth in 2015, whether -- well, whether we see rising silicon content continue in 2016?

台積電 2015 年的智慧型手機業務成長，那麼 2016 年矽含量是否將持續上升？

Mark, can you answer the question or do you even have the data that --?

馬克，你能回答這個問題嗎？或是你有相關數據嗎？

I mentioned that for every high-end smartphone, our per-phone, the wafer value we get this year will be increased by 8%, 7% or 8%. So that number is smaller than from 2014 to 2015. I don't remember the 2014 to 2015 number.

我提到每一款高階智慧型手機，我們今年得到的每支手機的晶圓價值將會增加8%、7%或8%。因此，這個數字比 2014 年至 2015 年的數字還要小。我不記得 2014 年到 2015 年的數字了。

Okay. Let me add just a follow-up on 28-nanometer. I think you said in the past, Mark, that 28-nanometer is going to grow in revenue terms in 2016 after declining somewhat in 2015. Can you give us an update on how you see 28-nanometer outlook this year? Thank you.

好的。讓我補充一下關於 28 奈米的後續問題。馬克，我記得你以前說過，28 奈米的收入在 2015 年有所下降之後，將在 2016 年成長。您能否向我們介紹一下您對今年 28 奈米前景的看法？謝謝。

Go ahead.

前進。

On the 28-nanometer revenue, C.C. can you comment?

關於 28 奈米收入，C.C.你能評論一下嗎？

We see the increased demand. And you're asking about the revenue growth? Probably.

我們看到需求增加了。你問的是收入成長嗎？大概。

Yes. Yes, what growth, yes.

是的。是的，有什麼成長呢，是的。

Probably flat considering that more demand but pricing drop. So you've got the probably flat. I would have to say that.

考慮到需求增加但價格下降，價格可能持平。因此，您得到的可能是平盤。我不得不這麼說。

Okay. Thanks. And just one final question. Lora, I think you said China is 5% of CapEx this year, the China facility. Can you talk about what the total CapEx will be for China and how might you fill the fab? Will you be transferring equipment already in operation or will this be incremental capacity for TSMC? Thank you.

好的。謝謝。最後一個問題。Lora，我想你說過今年中國工廠的資本支出佔到了5%。您能談談中國的總資本支出是多少以及如何填補晶圓廠的產能嗎？您會轉移已經運作的設備嗎？還是這會增加​​台積電的產能？謝謝。

This year the China CapEx will be about 5%. That's a couple of hundred million US dollars. This is a multiple-year project. And the current plan for China is to install 20,000 wafer as a starting point and to be manufacturing in 2018. So from now, 2016 to 2017 will be the construction period for the new fab. So this year with be couple of hundred million. Next year will be bigger. Actually 2017 will be the most bigger one. The total investment that, based on 20,000 wafer, is approximately $3b, multiple-year project.

今年中國的資本支出將在5%左右。這可是幾億美元啊。這是一個多年的項目。而中國目前的計畫是以安裝2萬片晶圓為起點，於2018年投入生產。所以從現在開始，2016年至2017年將是新晶圓廠的興建期。所以今年將會有幾億。明年的規模將會更大。事實上，2017 年將是規模最大的一年。以20,000片晶圓計算，該專案總投資約30億美元，為多年期專案。

Thank you very much.

非常感謝。

All right. We still have another caller on the line. Operator, could you please proceed to the next caller?

好的。我們還有另一位來電者。接線生，您能接聽下一位來電嗎？

Mehdi Hosseini, SIG.

Mehdi Hosseini，SIG。

Yes. Thanks for taking my question and happy New Year. I wanted to ask you about the key assumptions that are going to be the year-end guidance of 5% to 10%. What is your assumption if revenues were to be up 5% and what is your assumption if revenues are up 10%?

是的。感謝您回答我的問題並祝新年快樂。我想問您關於年底 5% 至 10% 的指引的關鍵假設。如果收入增加 5%，您的假設是什麼？如果收入增加 10%，您的假設是什麼？

As it relates to our revenue growth? As it relates to the semiconductor market growth?

這與我們的收入成長有關嗎？它與半導體市場成長有何關係？

TSMC's revenue guide of 5% to 10% growth.

台積電預計營收將成長5%至10%。

Yes. Our -- wow. That estimate is actually -- is made on two bases. The first base is the semiconductor market growth and the foundries growth, which Mark already mentioned. We estimate the semiconductor market growth will be 2% and the foundry growth will be 5% this year.

是的。我們的—哇。該估計實際上是基於兩個依據。第一個基礎是半導體市場成長和代工廠成長，馬克已經提過。我們預期今年半導體市場成長率為2%，晶圓代工成長率為5%。

And we also have a few other relevant growth indices, such as fabless growth and our customers' collective growth, and, well, I think those are the most relevant indicators. And so that's the first base. That's the first basis on which we estimate our growth this year.

我們還有其他一些相關的成長指數，例如無晶圓廠成長和我們客戶的集體成長，我認為這些是最相關的指標。這就是第一壘。這是我們估算今年成長的第一個依據。

The second basis that we do, we estimate, is from the field, from the regional, our own field sales estimates. Each region reports its own estimate of the growth in its region.

我們所做的第二個依據是，我們估計，是從現場、從區域，從我們自己的現場銷售估計。每個地區都報告自己對本地區成長的估計。

Actually we have a third estimate, but the third estimate is basically a synthesis and a reconciliation between the first two. So I hope that answers your question.

實際上我們還有第三個估計，但第三個估計基本上是前兩個估計的綜合和調和。我希望這能回答你的問題。

Great. Sure. And just as a follow-up to this, I wanted to understand some of your conservativism built in this guide. This time last year you were expecting revenue to grow by more than 15%. But unfortunately overall end market demand wasn't that strong.

偉大的。當然。作為對此的後續報道，我想了解您在本指南中體現的一些保守主義。去年此時，您預計收入將成長 15% 以上。但不幸的是，整體終端市場需求卻不那麼強勁。

Now we're starting the year at a lower growth rate. What are the key assumptions for handset sell-through? It seems to me that the Chinese handset OEMs are building inventory. There is a risk that sell-through is not going to be there. One of the key, leading US-based handset maker is facing some challenges. And in that context, how much of a conservatism is dialed into these guidance?

現在，我們以較低的成長率開始新的一年。手機銷售量的關鍵假設是什麼？在我看來，中國手機 OEM 正在建立庫存。存在無法實現銷售的風險。其中一家主要的、領先的美國手機製造商正面臨一些挑戰。在這種背景下，這些指導方針的保守程度有多大？

Well I think Mark said that our estimate of handset smartphone sell-through is 1.5b units worldwide. 8%, I think. 8% growth over last year.

嗯，我想馬克說過，我們估計全球智慧型手機銷量為 15 億台。我認為是 8%。比去年同期成長8%。

Mehdi, I guess your question is whether or not we have been too conservative or been too optimistic about our forecast of the smartphone growth?

梅迪，我猜你的問題是，我們對智慧型手機成長的預測是否過於保守或過於樂觀？

Yes. Yes. Thanks for clarifying that.

是的。是的。感謝您澄清這一點。

Yes. I have some -- let me add some comments on this question. Compare this year and last year, there is at least two major differences make --lead us to make the current forecast. One is that when we entered the beginning of last year, we did not know the inventory build-up is very, very high. I still remember 11 or 12 days above seasonal. And then this year, however, we considered the drastic reduction of the inventory during the fourth quarter. We have a better estimate about the starting point of the year.

是的。我有一些——讓我對這個問題補充一些評論。今年和去年相比，至少有兩個重大差異導致我們做出目前的預測。一是，當我們去年年初的時候，我們並不知道庫存累積會非常非常高。我還記得比季節多 11 或 12 天。然而，今年我們考慮在第四季大幅減少庫存。我們對今年的起點有更好的估計。

And secondly, of course, is the macroeconomics of this year, as you know, is still several uncertain factors in it. Therefore we were just taking those two factors in account to make our current forecast, and therefore it will lead to a bigger range.

第二，當然是今年的宏觀經濟，正如你所知，其中仍然存在一些不確定因素。因此，我們只是考慮這兩個因素來做出目前的預測，因此它將導致更大的範圍。

Got it. Thank you very much for detailed color.

知道了。非常感謝您提供詳細的色彩。

Thank you. And let's come back to the floor. There are quite a few hands raised up. I will ask the people who have not yet had the chance to ask questions first. And that first one goes to, all right, Sebastian, CLSA.

謝謝。讓我們回到正題上。有不少人舉起了手。我將首先詢問那些還沒有機會提問的人。第一個是給里昂證券的賽巴斯蒂安的。

Thank you for taking my questions. So my first question is regarding the 10 nanometers. So earlier Chairman said that he intends to maintain high market share initially at the beginning. So do you have any sense in mind that what kind of revenue contribution you see by fourth quarter 2017? Would it be similar to by 15% to 20% you had back in fourth quarter 2014 on 20 nanometers?

感謝您回答我的問題。所以我的第一個問題是關於 10 奈米的。所以早些時候董事長說他打算在開始時就保持較高的市場份額。那麼，您是否認為 2017 年第四季的營收貢獻會是怎麼樣的呢？這與 2014 年第四季 20 奈米製程的 15% 到 20% 的增幅類似嗎？

Well, C.C., do you have any idea? He's talking about 2017.

那麼，C.C.，你有什麼想法嗎？他談論的是 2017 年。

Yes, I know.

是的，我知道。

Fourth quarter.

第四季。

The fourth quarter. If you -- I don't estimate customers' demand, but if I can give you an answer, that would be a little bit higher. Because by every year --.

第四季。如果你——我沒有估計客戶的需求，但如果我可以給你一個答案，那將會高一些。因為每年——。

A little higher than --?

比--高一點？

You higher than the 20 nanometer in the fourth quarter of 2014. Higher than the 16 we've had in the fourth quarter.

高於2014年第四季的20奈米。高於第四季的16分。

Okay.

好的。

Because the continual growth.

因為不斷的成長。

Thank you very much. So, and also on the 10 nanometers earlier, Bruce asked about the faster ramp. And C.C., you answered that will be faster ramp compared to the previous node. So does that mean that the yield ramp or the yield learning curve will be faster? That means you are going to reach the corporate average margin faster than the previous nodes.

非常感謝。因此，同樣是針對先前的 10 奈米，Bruce 詢問了更快的坡道速度。C.C.，您回答說與前一個節點相比，成長速度會更快。那麼這是否意味著產量上升或產量學習曲線將會更快？這意味著您將比以前的節點更快達到企業平均利潤。

Well, not necessarily, because the margin is determined by price and cost. You may learn faster on the cost, but basically we look at the total Company structural profitability and we maintain that. So I don't really particularly want to talk about node-by-node profitability.

嗯，不一定，因為利潤是由價格和成本決定的。您可能會更快地了解成本，但基本上我們會專注於公司的整體結構盈利能力並堅持這一點。所以我並不是特別想談逐個節點的獲利能力。

Of course, in the past we have said, under pressure from you, how soon we'll reach corporate average, etc., etc. But today, and actually last few times, I kept assuring you that we are looking out. We're looking out for the corporate average. The corporate average of course has got the new node in it. And the new node factor is likely to be a very important part of the corporate average. But we looked at the whole thing, yes.

當然，過去我們也說過，在您的壓力下，我們多久才能達到企業平均水平，等等。但今天，實際上最近幾次，我一直向你們保證，我們會小心謹慎。我們關注的是企業平均。企業平均值當然已經包含了新的節點。而新的節點因素很有可能會成為企業平均值的一個非常重要的部分。但我們已經看過整件事情了，是的。

Look, we manage a portfolio; we don't manage this single stock. I'm talking figuratively. We manage a total portfolio of technologies, not just a single one.

你看，我們管理一個投資組合；我們不管理該單檔股票。我只是打個比方。我們管理的是整個技術組合，而不僅僅是單一的技術。

Thank you.

謝謝。

Yes.

是的。

My second question is -- sorry. My second question is on specialty technologies that the -- we heard that a lot of the foundries, even the tier-two, tier-three foundries are promoting their specialty technologies for IOT and more-than-Moore. So we wonder what's the special strategy that TSMC has in this field. And do you think you lead those foundries by a lot?

我的第二個問題是──抱歉。我的第二個問題是關於專業技術，我們聽說很多代工廠，甚至二線、三線代工廠都在推廣他們的物聯網和超越摩爾的專業技術。那麼，我們想知道台積電在這個領域有何特殊策略呢？您認為你們領先這些代工廠很多嗎？

What was the question?

問題是什麼？

All right. Sebastian's asking when we talk about specialty technologies, he also noticed that there are a number of other foundries that are also claiming to working on IOT and more and more. What is going to be TSMC's differentiations? Do we have a substantial lead over other foundries?

好的。當我們談論專業技術時，塞巴斯蒂安問道，他還注意到有許多其他代工廠也聲稱致力於物聯網等技術。台積電的差異化將會是什麼？我們與其他代工廠相比是否具有明顯領先優勢？

Definitely we differentiate by the customers trusting us. We differentiate by the technology we have. We differentiate by our manufacturing ability.

毫無疑問，我們因客戶信任而與眾不同。我們憑藉所擁有的技術來實現差異化。我們以製造能力脫穎而出。

Thank you. So what kind of the growth of these specialty technologies do you expect to contribute to TSMC in the next five years?

謝謝。那麼，您預期這些特色技術在未來五年將為台積電帶來什麼樣的成長呢？

C.C.?

C.C.？

Would you please repeat your question again?

您能再重複一下您的問題嗎？

Yes.

是的。

How much will IOT contribute to our revenue? I think that's your question, right?

物聯網將為我們的收入貢獻多少？我想這就是你的問題，對嗎？

Yes. Thanks, Chairman.

是的。謝謝主席。

All I can say is increasing. I give you a number, a specific number on the 8-inch wafers. Now it's moving into the 12-inch wafer business and it's increasing. So it will depend on the market situation, so how fast that IOT will grow. All right?

我只能說在增加。我給你一個數字，8吋晶圓上的一個具體數字。現在它正在進軍12英寸晶圓業務，業務正在不斷增長。所以這將取決於市場情況，物聯網將成長多快。好的？

The growth rate is enormous but the base is relatively thin.

成長率巨大，但基數相對較薄弱。

Okay. Thank you.

好的。謝謝。

All right. Next question goes to Morgan Stanley's Charlie Chan.

好的。下一個問題是摩根士丹利的 Charlie Chan。

Thanks for taking my question. My first question is on the capital intensity. So if we average out this year and the last year capacity is around $9b per year. And that is similar level to 2014 CapEx. And our revenue growth is growing at 10%, and this year high single digit. So that means capital intensity is declining. So I would like to get your updates also on the capital intensity, whether this is an industry phenomenon or it is because of much better execution from TSMC.

感謝您回答我的問題。我的第一個問題是關於資本密集度。因此，如果我們計算今年和去年的平均產能，那麼每年的產能約為 90 億美元。這與 2014 年的資本支出水準相似。我們的收入成長率為10％，今年是高個位數。這意味著資本密集度正在下降。因此，我也想了解您關於資本密集度的最新情況，這是否是一個行業現象，或者是因為台積電的執行力更強。

Well we predicted our capital intensity, the way you define it, CapEx divided by current year revenue, we predicted quite a few years ago that it would go down, and it's going down. So the update is that, yes, our prediction was correct. It will go down.

好吧，我們預測了我們的資本強度，按照你的定義，就是資本支出除以當年收入，我們幾年前就預測它會下降，而且它確實在下降。最新消息是，是的，我們的預測是正確的。它會下降。

But I think Charlie's question is whether or not this decline is TSMC-specific or it is an industry-wide phenomenon.

但我認為 Charlie 的問題是，這種下滑是台積電獨有的現象，還是整個產業現象。

I think it's -- I hope, I do think it's TSMC-specific because we -- I think we do a better job in improving our asset effectiveness.

我認為這是——我希望，我確實認為這是台積電特有的，因為我們——我認為我們在提高資產效率方面做得更好。

Okay. Thank you. And then my next question is on potential dividend payout increase. And so, Lora, can you quantify the increase of your cash dividend payout this year, no matter in dollar per share or the payout percentage? Thank you.

好的。謝謝。我的下一個問題是關於潛在的股息支付增加。那麼，Lora，您能量化今年現金股息支付的增幅嗎，無論是每股美元還是支付百分比？謝謝。

I said we consider an increase, but we need to discuss with the Board. Before we do that, I will rather not to quantify that. But I can tell, it's not going to be a trivial number.

我說我們考慮增加，但我們需要與董事會討論。在我們這樣做之前，我寧願不要量化這一點。但我可以說，這不是一個小數字。

Thank you.

謝謝。

All right. Now there are follow-up questions from Credit Suisse, Randy. Randy Abrams.

好的。現在，瑞士信貸，蘭迪，有後續問題。蘭迪艾布拉姆斯。

Yes. The follow up, in the pack, your currency last year was TWD31.7. And we're currently at TWD33.5. Could you clarify the 5% to 10% sales and margin, if that's US dollar? So in NT dollar you would grow 10% to 15%? And then also for margin, if structural profitability, if that factors a currency benefit.

是的。後續，在該包中，您去年的貨幣是 TWD31.7。目前為 33.5 新台幣。如果以美元計算，您能否解釋一下 5% 到 10% 的銷售額和利潤率？那麼以新台幣計算，成長率會是 10% 到 15% 嗎？然後對於利潤率，如果結構性獲利能力，如果考慮到貨幣利益。

Sorry, I need to hear your numbers again. Well Lora will answer the question, but I was curious. I want to hear your numbers.

抱歉，我需要再次聽一下您的號碼。好吧，Lora 會回答這個問題，但我很好奇。我想聽聽你的數字。

So NT dollar, like in the packet, it was TWD31.7 for the average last year. Today it's TWD33.49. So you're getting a pretty big benefit both on sales and margin.

因此，像資料包中所示的新台幣一樣，去年的平均值為 31.7 新台幣。今天是33.49台幣。因此您在銷售額和利潤方面都會獲得相當大的利益。

Well, but today it's only, what, the 14th day of the year.

嗯，但今天才一年的第 14 天。

Okay, but --.

好的，但是--。

Well will you make a prediction to me, please, what this year's exchange rate will be?

那麼請您預測一下今年的匯率是多少？

I can't predict the exchange rate, but is your guidance based on US dollar -- US dollar or is it based on local currency?

我無法預測匯率，但您的指導是基於美元——美元還是基於當地貨幣？

Well anyway, look -- well Lora, why don't you? You heard his question, right? Okay.

好吧，不管怎樣，看——好吧，洛拉，你為什麼不呢？你聽到了他的問題，對吧？好的。

I heard you. I think you're probably saying we are conservative, and we have not reflected the potential upside from FX gain.

我聽到了。我想您可能會說我們比較保守，而且我們尚未反映出外匯收益帶來的潛在上行空間。

We have said many years ago there's a rule of thumb, any 1% of exchange rate change we have about 0.4 percentage point to our margin. This formula still works. So you can work on your math. If the exchange rate moves 1%, that's 0.4 percentage point to our profitability. And we sell 100 -- almost 100% in US dollars. And our guidance was in NT dollars, based on a 33 -- 32.5 exchange rate for the first quarter.

我們多年前就說過，有一條經驗法則，匯率每發生 1% 的變化，我們的利潤就會減少約 0.4 個百分點。此公式仍然有效。這樣你就可以做數學了。如果匯率變動 1%，我們的獲利能力就會下降 0.4 個百分點。我們的銷售額幾乎 100% 都是以美元計算的。我們的指引以新台幣計算，基於第一季 33-32.5 的匯率。

And that's your full year is based on that, the 5% to 10%?

那麼您的全年業績是基於 5% 到 10% 的嗎？

No, no, no. This is only -- we are talking about the first quarter. You're saying Chairman's 5% to 10% growth based on what?

不，不，不。這只是——我們正在談論第一季。您說董事長的5%到10%的成長是基於什麼？

Yes, based on what currency? Is it based on US dollar?

是的，基於什麼貨幣？是以美元計算的嗎？

The 5% to 10% growth rate, revenue growth rate, it will be either US dollars or NT.

5%到10%的成長率，收入成長率，要嘛是美元，要嘛是新台幣。

Yes, it will be all within that range.

是的，都在這個範圍內。

Okay. Great. Okay. And then the follow-up question. You had a lot of reuse from 20 to 16. 28's had a long life. But as you start to migrate customers to 16 with the FFC, can 28 be migrated efficiently to FinFET or 10 or do you expect to keep that node at 28? Can you migrate and reuse the 28 if demand starts to fall in the next couple of years?

好的。偉大的。好的。然後是後續問題。從 20 歲到 16 歲，你得到了很多重複利用的機會。28 歲壽命很長。但是，當您開始使用 FFC 將客戶遷移到 16 時，28 是否可以有效地遷移到 FinFET 或 10，或者您是否希望將該節點保持在 28？如果未來幾年需求開始下降，您可以遷移並重新使用 28 嗎？

I'm sorry, I didn't hear the question.

抱歉，我沒聽清楚問題。

So, Randy, you are asking whether or not 28-nanometer capacity can be migrated to produce FinFET?

那麼，Randy，您問的是 28 奈米產能是否可以遷移來生產 FinFET？

28-nano can be migrated to what?

28奈米可以遷移到什麼？

Produce FinFET tech.

生產 FinFET 技術。

Produce FinFET? 28 to FinFET? Well, I imagine -- well does somebody --? Well the simple answer is some of it, yes. Okay? Some of it will be. But do you have a bit more detail?

生產FinFET？28 到 FinFET？嗯，我想──有人知道嗎──？嗯，簡單的回答是，有一部分是的。好的？有些是的。但您還能提供更多細節嗎？

We have done that. But we see the 28-nanometer demand continue to be sustaining what the capacity we are having today. So hopefully we stay competitive and keep that demand.

我們已經做到了。但我們看到 28 奈米的需求繼續維持我們今天的產能。因此希望我們保持競爭力並保持這種需求。

Thank you.

謝謝。

All right. There's a hand.

好的。有一隻手。

We still have one-micron, one-micron equipment that's being utilized now. So to convert one node of the equipment to another node is not our first priority.

我們仍有正在使用的一微米、一微米的設備。因此，將設備的一個節點轉換為另一個節點不是我們的首要任務。

Okay. I see a hand over there, but I do not really know you. Can you identify yourself?

好的。我看到那邊有一隻手，但是我並不認識你。你能認出你自己嗎？

Yes. My name is Ken Koyanagi, with Nikkei Asian Review, from Japan. I understand you made a decision about China investment after last fall election. And I'm just curious how you reached that condition -- decision, after assessing how -- what particular risks are involved in this investment? How did you assess the political risks? Especially after the election and right before the election, which will probably change the political landscape of the cross-strait relationship?

是的。我叫小柳健，來自日本，為《日經亞洲評論》撰稿。我知道您在去年秋季選舉後就對中國的投資做出了決定。我只是好奇您是如何在評估了這項投資涉及哪些具體風險之後得出這個結論的？您如何評估政治風險？尤其選後與選前，恐將改變兩岸關係政治版圖？

What do you mean by political risks?

你說的政治風險是什麼意思？

Well I think you can think of a lot of scenarios. There will be more tensions between the two territories between the channel, strait, and which might affect how you will be treated by the Mainland Chinese government.

嗯，我想你可以想到很多場景。海峽兩岸之間的緊張局勢將進一步加劇，這可能會影響中國大陸政府對您的態度。

Well we are a business, and a lot of businesses, a lot of Taiwan businesses are in China. And we are really among the ones that are investing in China the least. We are among Taiwan companies, I think, we are perhaps the -- if we consider the relative size and so on, we still have more than 90% of our people, of our employees in Taiwan. And the capital investment we have made in China so far was miniscule compared to the investment that we have made in Taiwan.

我們是一家企業，很多企業，很多台灣企業都在中國。我們確實是對中國投資最少的國家之一。我認為，我們是台灣公司之一，如果考慮到相對規模等，我們仍有 90% 以上的員工在台灣。而且我們目前在中國大陸的資本投資與我們在台灣的投資相比微不足道。

So yes, we have considered all these risks. In fact, we've discussed our proposal with a lot of people. So -- and we did reach this decision of making investment in China, building a plant, and also setting up a design center, a design service center. That's important too. That's important for enhancing our access into the Chinese market.

是的，我們已經考慮到了所有這些風險。事實上，我們已經與許多人討論了我們的提議。所以，我們確實做出了在中國投資、建廠以及設立設計中心和設計服務中心的決定。這也很重要。這對於加強我們進入中國市場至關重要。

So yes, we have considered all these risks. Yes. Well, if you call them risks. It seems to me it's -- a lot of people have -- well, the US, emerging companies have made a lot of investments in China too. And so yes.

是的，我們已經考慮到了所有這些風險。是的。嗯，如果你稱之為風險的話。在我看來，很多人認為，美國新興公司也在中國進行了大量投資。所以是的。

HSBC, Steven Pelayo, has a follow-up question.

匯豐銀行的史蒂文·佩拉約 (Steven Pelayo) 有一個後續問題。

There's been an unprecedented amount of semiconductor M&A in the last, I don't know, 15 months or so, more than the last 15 years. I'm just curious if you're seeing any short-term impacts, as these companies consolidate and rationalize, that's impacting any of your near-term demand? And then if you have any thoughts maybe longer term in terms of the purchasing power of a much larger, stronger customer?

在過去的 15 個月左右的時間裡，半導體的併購數量達到了前所未有的水平，比過去 15 年還要多。我只是好奇，隨著這些公司的合併和合理化，您是否看到任何短期影響，這會影響您的近期需求嗎？那麼，您是否有什麼想法，從更大、更強大的客戶的購買力的長期角度來看？

Well the three big ones last year, as far as we were concerned, were Intel, Intel's acquisition of Altera, Avago and Broadcom, NXP and Freescale, yes. All six of them, I'm talking about both the acquirer and the acquired, all six of them were our good customers. And after the combination there'll be three. And I hope and I have reason to expect that the three combined entities will continue to be our good customers. That's what being everybody's foundry means.

嗯，就我們而言，去年的三大公司是英特爾，英特爾收購了 Altera，Avago 和 Broadcom，還有 NXP 和飛思卡爾。這六家公司，我說的是收購方和被收購方，他們六家都是我們的好客戶。合而為一後就有三了。我希望並且有理由期待合併後的三家公司將繼續成為我們的優質客戶。這就是成為每個人的鑄造廠的意義。

One more follow up.

再一次跟進。

That's not your question? Your question?

這不是你的問題嗎？您的問題？

Well near term as well. I'm curious as they're trying to rationalize their businesses and consolidate these two, are they slowing maybe their order activity to figure out what their final company's ultimately going to look like? Are you seeing any short-term impacts?

嗯，近期也是如此。我很好奇，當他們試圖合理化他們的業務並合併這兩家公司時，他們是否會放慢訂單活動的速度以弄清楚他們的最終公司最終會是什麼樣子？您看到任何短期影響嗎？

No, we don't see any short-term impact.

不，我們沒有看到任何短期影響。

No? Okay. And then my second question was you had an anchor customer at 16-nanometer in the second half of 2015 that appears to be staying on 16-nanometer as they go into 2016. Does this mean there could be die size increases as they add more functionality and perhaps more wafers needed from you?

不？好的。我的第二個問題是，在 2015 年下半年，你們有一個使用 16 奈米製程的主要客戶，而到了 2016 年，他們似乎仍會繼續使用 16 奈米製程。這是否意味著隨著它們增加更多功能，晶片尺寸可能會增大，或許需要您提供更多晶圓？

C.C.?

C.C.？

Your question is whether they increase the die size?

您的問題是他們是否增加了晶片尺寸？

I'm saying that two years ago you went from 20 to 16, so you had this node jump so they could -- your customers could keep their die size the same by adding more functionality. Now they're staying at 16-nanometer, some of the anchor customers, and so I'm wondering if maybe that means the die size is going to increase and thus require more wafers from TSMC to meet the same units.

我的意思是說兩年前你們從 20 減少到了 16，所以你們有了這個節點跳躍，你們的客戶就可以透過添加更多功能來保持他們的晶片尺寸不變。現在他們停留在 16 奈米，一些主要客戶，所以我想知道這是否意味著晶片尺寸將會增加，從而需要台積電提供更多的晶圓來滿足相同的單位需求。

Well, I don't comment on the die size, but I can tell you that they add a lot of functionality inside. So you look at the smartphone, they have become better and better.

嗯，我不評論晶片尺寸，但我可以告訴你，它們在裡面增加了很多功能。所以你看看智慧型手機，它們變得越來越好。

Okay. Fair enough. Thank you.

好的。很公平。謝謝。

All right. Due to the time consideration, we will conclude our conference at this point.

好的。由於時間關係，我們的會議就到此結束。

So before we conclude today's conference, please be advised that the replay of the conference will be accessible within three hours from now. Transcript will be available 24 hours from now. And they are all available through our website.

因此，在我們結束今天的會議之前，請注意，會議的重播將在三小時內提供。成績單將於 24 小時後提供。所有這些都可以透過我們的網站獲得。

Thank you for joining us today. We hope you will join us again next quarter. Goodbye, and have a good day.

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。