台積電 ADR (TSM) 2016 Q2 法說會逐字稿

(Spoken in foreign language). Welcome to TSMC's second-quarter 2016 earnings conference and conference call. This is Elizabeth Sun, TSMC's Director of Corporate Communications and your host for today. Today's event is webcast live through TSMC's website at www.tsmc.com. If you are joining us via 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.

（用外語說）。歡迎參加台積電2016年第二季財報發表會及電話會議。我是台積電企業傳播總監伊莉莎白·孫，也是今天的主持人。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此活動。

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 second quarter of 2016, followed by our guidance for the third quarter of 2016. Afterwards, Miss Ho and TSMC's two Presidents and Co-CEOs, Dr. Mark Liu and Dr. C.C. Wei, will jointly provide our management's key messages. Then we will open both the floor and the line for the Q&A.

今天的活動形式如下。首先，台積電資深副總經理兼財務長何麗華女士將總結2016年第二季的營運狀況，隨後將為2016年第三季作出展望。隨後，何麗華女士與台積電兩位總經理兼聯席執行長劉德華博士和陳建州博士將分別進行會談。魏先生將與大家共同傳遞管理階層的關鍵訊息。然後我們將開放現場提問和線上提問。

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

對於電話會議的參與者，如果您還沒有新聞稿的副本，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簡報相關的摘要投影片。

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 statement. 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總結營運情況並指導本季業績。

Thank you, Elizabeth. Good afternoon, everyone. Welcome to joining us today. My presentation will start with financial highlights for the second quarter and followed by the guidance for the third quarter.

謝謝你，伊麗莎白。大家下午好。歡迎大家今天加入我們。我的演講將從第二季的財務亮點開始，然後是第三季的指導。

We had a good second quarter. Our second-quarter revenue increased 9% sequentially to TWD222b, exceeding the high end of our guidance given in April, due to business upside resulting from the demand increases in mid- and low-end smartphones and customer inventory restocking.

我們第二季表現良好。我們第二季的營收季增 9%，達到 2,220 億新台幣，超過了我們 4 月給出的預期上限，這得益於中低階智慧型手機需求增加以及客戶庫存補充帶來的業務成長。

Gross margin was also ahead of expectation and increased by 6.6 percentage point Q over Q to a record high of 51.5%, mainly driven by improvement in utilization rate and cost reduction efforts, partially offset by an unfavorable foreign exchange rate. Operating margin also increased by a similar magnitude to reach 41.2%.

毛利率也超出預期，環比增長 6.6 個百分點，達到創紀錄的 51.5%，這主要得益於利用率提高和成本削減措施，但部分被不利的外匯匯率所抵消。營業利益率也實現了類似幅度的成長，達到 41.2%。

As we highlighted last quarter, we incurred a higher income tax in the second quarter. The corporate tax rate rose to 23% as we accrued the 10% on undistributed retained earnings. And we estimate the 2016 full-year tax rate to be about 14%.

正如我們在上個季度所強調的那樣，我們在第二季度產生了更高的所得稅。由於我們對未分配保留收益提列了 10% 的稅率，因此公司稅率上升至 23%。我們預計2016年全年稅率約為14%。

Overall, our second-quarter EPS reached TWD2.80, an 8.7% decline year over year, mainly due to a non-recurring share disposal gain from ASML and Vanguard in the second quarter last year. Excluding the one-off items, second-quarter EPS actually grew 17% year over year.

整體而言，我們第二季每股獲利達2.80新台幣，較去年同期下滑8.7%，主要由於去年第二季從ASML及Vanguard取得非經常性股份處置收益。不計入一次性項目，第二季每股收益實際上比去年同期成長了 17%。

Now let's take a look at revenue contribution by application. During the second quarter communication was flat from the prior quarter, while computer, consumer, industrial and standard increased by 19%, 80% and a 12% respectively.

現在讓我們來看看應用程式的收入貢獻。第二季度，通訊領域與上一季持平，而電腦、消費、工業和標準領域分別成長了 19%、80% 和 12%。

Now how about revenue by technology? Combined revenue from 16-nanometer and 20-nanometer continued to grow and they represented 23% of revenue in the second quarter, same as the first quarter. 28-nanometer contribution fell slightly to 28% versus 30% in the first quarter, due to a higher revenue base in the second quarter. But absolute dollar revenue from 28-nanometer continued to increase Q over Q.

那麼按技術劃分的收入如何呢？ 16奈米和20奈米的合併收入持續成長，佔第二季營收的23％，與第一季相同。由於第二季營收基數較高，28 奈米貢獻率從第一季的 30% 略微下降至 28%。但 28 奈米的絕對美元收入仍逐季增加。

Moving on to the balance sheet, we ended the second quarter with cash and marketable securities of TWD668b, an increase of TWD19b. On the liability side, current liability increased TWD163b as we accrued about TWD156b for cash dividend, which will be paid out this month.

再來看資產負債表，第二季末我們的現金和有價證券總額為 6,680 億新台幣，增加了 190 億新台幣。負債方面，由於我們提列了約1,560億新台幣的現金股息，流動負債增加了1,630億新台幣，這筆股息將於本月支付。

On financial ratios, accounts receivable turnover days increased 2 days to 43 days, while days of inventory remain at 54 days, same as last quarter.

財務比率方面，應收帳款週轉天數增加2天至43天，而庫存天數維持在54天，與上一季相同。

Now let me make a few comments on cash flow and CapEx. During the second quarter we generated about TWD107b cash from operations and spent TWD100b -- and spent TWD74b in capital expenditure. As a result, we generated free cash flow of TWD33b this quarter and repaid TWD11b of corporate bonds. Our overall cash balance increased TWD4b to TWD622b 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。在第二季度，我們從營運中產生了約 1,070 億新台幣的現金，支出了 1,000 億新台幣，資本支出為 740 億新台幣。因此，本季我們產生了330億新台幣的自由現金流，並償還了110億新台幣的公司債。截至本季末，我們的整體現金餘額增加了 40 億新台幣，達到 6,220 億新台幣。

In US dollar terms, the capital expenditure spent in the first half of 2016 totaled $3.4b. The second-half spending will be much more than the first half.

以美元計算，2016年上半年的資本支出總額為34億美元。下半年的支出將遠遠超過上半年。

I have finished my financial summary. Now let's turn to the third-quarter outlook. We expect our business in the third quarter will benefit from our customers' new product launch and continued inventory restocking.

我已經完成了財務總結。現在讓我們來看看第三季的展望。我們預計第三季的業務將受益於客戶的新產品發布和持續的庫存補充。

Based on our current business outlook and exchange rate assumptions of $1 to TWD32.30, we expect third-quarter revenue to be between TWD254b and TWD257b, which represents 14.5% to 15.9% sequential growth; gross profit margin to be between 50% and 52%; and operating margin to be between 39.5% and 41.5%.

根據我們目前的業務前景和 1 美元兌 32.30 新台幣的匯率假設，我們預計第三季度營收將在 2540 億至 2570 億新台幣之間，環比增長 14.5% 至 15.9%；毛利率介於50%至52%之間；營業利潤率在39.5%至41.5%之間。

This concludes my remarks.

我的發言到此結束。

Now we will begin the management comments and we will start with TSMC's CFO, Miss Lora Ho.

現在我們開始管理階層的評論，首先請台積電財務長何麗麗女士發言。

I would like to make a few comments on near-term outlook, CapEx, profitability and the dividend. Let me start with near-term outlook.

我想對近期前景、資本支出、盈利能力和股息發表一些評論。讓我先從近期展望開始。

Our second-quarter result was helped by an increase in demand from China 4G Plus smartphone ramping and continued 3G to 4G upgrade from emerging markets. Given a stronger-than-seasonal business for our fabless customers in the second quarter, we estimate our fabless customers' DOI exiting second quarter is about seasonal level.

我們第二季的業績得益於中國 4G Plus 智慧型手機需求的成長以及新興市場持續從 3G 升級到 4G 的推動。鑑於我們無晶圓廠客戶的業務在第二季度表現強於季節性，我們估計我們無晶圓廠客戶在第二季度的 DOI 大約與季節性水平相同。

Looking ahead to third quarter 2016, we forecast continuing inventory build by the smartphone-centric OEMs and fabless companies, stimulated by subsidies provided to the telecommunication companies by the Chinese government. We estimate fabless DOI will remain flat with the second quarter, but will be above seasonal level by a few days exiting third quarter.

展望2016年第三季度，我們預測，受中國政府向電信公司提供補貼的刺激，以智慧型手機為中心的OEM廠商和無晶圓廠公司將繼續增加庫存。我們估計無晶圓廠 DOI 將與第二季持平，但在第三季結束時將比季節性高出幾天。

Fourth quarter is normally an inventory adjustment quarter, but the degree of adjustment will depend on market dynamics and sentiment. For now, we expect the supply chain inventory to go back to the seasonal level exiting fourth quarter. For the whole year of 2016, TSMC maintains our target of between 5% and 10% growth in both revenue and operating profit, both in US dollar and in NT dollar terms.

第四季度通常是庫存調整季度，但調整程度將取決於市場動態和情緒。目前，我們預計供應鏈庫存將在第四季結束後恢復到季節性水準。台積電2016年全年營收與營業利潤，不論以美元或新台幣計算，都維持成長5%至10%的目標。

Now let me make a few comments on CapEx. Our 2016 CapEx forecast has risen from $9b to $10b to $9.5b to $10.5b because expectation for 2017 mobile market mobile products revenue has risen as well.

現在，讓我對資本支出發表一些評論。我們對 2016 年資本支出的預測已從 90 億美元至 100 億美元上升至 95 億美元至 105 億美元，因為對 2017 年行動市場行動產品收入的預期也有所上升。

TSMC's CapEx-to-sales ratio, known as capital intensity, has come down significantly in the last two years. Compared with the high 40s level seen in 2011 to 2013, our capital intensity has dropped to about 31% last year. Going forward, we estimate our capital intensity will remain at mid-30s level for the next few years.

台積電的資本支出與銷售額比（即資本密集度）在過去兩年中大幅下降。與2011年至2013年的40%左右的高水準相比，我們的資本密集度去年已下降至約31%。展望未來，我們預計未來幾年我們的資本密集度將維持在35%左右的水準。

One major factor contributing to this moderate level of capital intensity is our effort made to minimize the conversion loss between two adjacent technology nodes. For example, between 20-nanometer and 16-nanometer, we closely manage one peak capacity so we can minimize conversion loss. Now we also closely manage 10-nanometer and 7-nanometer as one peak capacity to minimize the conversion loss.

促成這種中等資本密集度水準的一個主要因素是我們努力將兩個相鄰技術節點之間的轉換損失降至最低。例如，在 20 奈米和 16 奈米之間，我們嚴格管理一個峰值容量，以便最大限度地減少轉換損失。現在我們也將10奈米和7奈米緊密管理為一個峰值容量，以最大限度地減少轉換損失。

In terms of profitability, in the past few years, despite the higher CapEx which led to a substantial increase in depreciation expenses, we have been able to maintain and even improve our structural profitability. We expect to be able to maintain our gross margin at close to 50% level and operating margin at close to 39% level.

從獲利能力來看，過去幾年，儘管資本支出增加導致折舊費用大幅增加，但我們仍能維持甚至提高結構性獲利能力。我們預計能夠將毛利率維持在接近50%的水平，並將營業利潤率維持在接近39%的水平。

My last comment is about dividend. We anticipate a steadily improving free cash flow in the next few years. Therefore we expect our dividend to steadily increase in the next few years as well.

我的最後一條評論是關於股息的。我們預計未來幾年自由現金流將穩定改善。因此，我們預計未來幾年我們的股息也將穩定成長。

Thank you. Let me turn the microphone to Mark for his comments.

謝謝。請容許我把麥克風交給馬克來聽他的評論。

Good afternoon, everyone. Thank you for joining us. I'd like to deliver you the message firstly on leading-edge technology status that includes 10-nanometer, 7-nanometer and 5-nanometer.

大家下午好。感謝您加入我們。我想先向大家介紹一下尖端技術的現狀，包括10奈米、7奈米、5奈米。

First on 10-nanometer. Our 10-nanometer has been transferred from R&D to production. Our first 10-nanometer customer product has been produced with satisfactory functional yield. So far, three customer products have been taped out to us. More customer product tape-outs are expected later this year. Those product tape-outs will start a revenue stream starting first quarter 2017, which will ramp steeply throughout 2017.

首先是10奈米。我們的10奈米已經從研發轉入生產。我們的第一個 10 奈米客戶產品已經生產出來並具有令人滿意的功能產量。到目前為止，我們已經完成了三款客戶產品的串流片。預計今年稍後將有更多客戶產品流片。這些產品的流片將從 2017 年第一季開始產生收入流，並在 2017 年全年大幅成長。

On 7-nanometer. Our 7-nanometer technology development is well on track. Its 256-megabit SRAM yield improvement is ahead of our schedule. In addition, we believe our 7-nanometer PPA, that is power, performance and area density, with its schedule, is ahead of our competitors. This technology has been aggressively adopted, not only by mobile customers, but also by high-performance computing customers. They all have aggressive product tape-out plan in first half 2017, with volume production planned in early 2018.

7奈米。我們的7奈米技術開發進展順利。其256兆位元SRAM產量提升超出了我們的計畫。此外，我們相信我們的7奈米PPA，即功率、性能和麵積密度，以及它的進度，都領先於我們的競爭對手。這項技術不僅受到行動客戶的積極採用，也受到高效能運算客戶的積極採用。他們都在 2017 年上半年制定了積極的產品流片計劃，並計劃在 2018 年初實現量產。

On 5-nanometer. We have been executing our 5-nanometer development since the beginning of this year. TSMC's 5-nanometer will achieve 1.9 times of logic density over our 7-nanometer. We plan to extensively use EUV lithography in 5-nanometer through improved density, simplify process complexity and reduce cost. The 5-nanometer risk production qualification in first half 2019 remains unchanged.

達到 5 奈米。我們從今年年初就開始進行 5 奈米開發。台積電的5奈米將實現比我們的7奈米更高的邏輯密度。我們計劃透過提高密度、簡化製程複雜性和降低成本，在5奈米領域廣泛使用EUV光刻技術。 2019年上半年5奈米風險生產資格維持不變。

Secondly, on EUV status. We plan to adopt EUV extensively in our 5-nanometer technology. Today EUV technology uses 7-nanometer as a development vehicle. We have good integration progress in EUV scanner, EUV mask and EUV photoresist. Same yield level has been repeatedly demonstrated using two EUV layers in 7-nanometer.

其次，關於EUV現狀。我們計劃在我們的5奈米技術中廣泛採用EUV。如今，EUV 技術採用 7 奈米作為開發工具。我們在EUV掃描器、EUV掩模版和EUV光阻的整合方面取得了良好的進展。使用兩個 7 奈米 EUV 層已反覆證明了相同的產量水準。

Currently we are running four state-of-the-art EUV scanners for EUV infrastructure development and for N7 and N5 technology development. We will move in another two EUV high-volume production tools, that is NXE3400, in first quarter 2017, next year.

目前，我們正在運行四台最先進的 EUV 掃描儀，用於 EUV 基礎設施開發以及 N7 和 N5 技術開發。明年第一季，我們將推出另外兩台EUV大量生產工具，即NXE3400。

Recently we successfully implemented 125-watt EUV source in our EUV3350 to improve productivity. In our in-house mask shop we have developing unique EUV mask technologies on mask blank, material, inspection and repair, to seamlessly integrate our EUV lithography total solution.

最近，我們在 EUV3350 中成功實施了 125 瓦 EUV 來源，以提高生產力。在我們的內部掩模車間，我們在掩模坯料、材料、檢查和修復方面開發了獨特的 EUV 掩模技術，以無縫整合我們的 EUV 光刻整體解決方案。

With all the encouraging development and progresses made at EUV, we estimate that EUV will be cost-effective tool for high-volume manufacturing by 2020, in time for our 5-nanometer ramp. Should EUV become cost-effective earlier, say around 2019, we believe we can still benefit from the earlier available of EUV for our 7-nanometer high-volume manufacturing.

隨著 EUV 領域取得的令人鼓舞的發展和進步，我們估計，到 2020 年，EUV 將成為實現大批量生產的經濟高效的工具，屆時將迎來 5 奈米製程的提升。如果 EUV 能夠更早實現成本效益，例如在 2019 年左右，我們相信我們仍然可以從 EUV 的早期可用性中受益，以實現 7 奈米的大批量製造。

Thirdly, on growth drivers. First, smartphone as a growth driver. We expect smartphone-related demand will support half of our growth in the next five years. It will come from unit growth as well as increasing silicon content. Despite a weak semiconductor industry growth this year, we estimate the smartphone unit growth rate will be about 5% -- about 6%. And the silicon content growth rate per smartphone will increase by a double digit for high and mid end and about flattish for the low end.

第三，關於成長動力。首先，智慧型手機作為成長動力。我們預計未來五年智慧型手機相關需求將支撐我們一半的成長。它將來自單位增長以及矽含量的增加。儘管今年半導體產業成長疲軟，但我們估計智慧型手機銷量成長率將在 5% 至 6% 左右。每部智慧型手機的矽含量成長率在高端和中端方面將達到兩位數，而在低階方面則基本持平。

We estimate total semiconductor revenue, excluding memory, in smartphone will increase about 7% this year. Longer term, we believe the smartphone unit will continue to grow at a mid single-digit rate. And the silicon content will continue to increase.

我們估計，今年智慧型手機的半導體總收入（不包括記憶體）將成長約 7%。從長遠來看，我們相信智慧型手機部門將繼續以中等個位數的速度成長。且矽含量還會不斷增加。

This silicon content increase is driven by the increasing adoption of innovative smartphone features, such as dual camera, security sensing, augment reality, virtual reality and migration of 4G, 4G Plus and to 5G. Most of the high-end smartphone features are also proliferating into lower-end smartphones because those innovative features usually require more advanced technologies. With our customers, we will gradually increase our market share in the smartphone market.

矽含量的增加是由於智慧型手機創新功能的日益普及，例如雙鏡頭、安全感應、擴增實境、虛擬實境以及 4G、4G Plus 和 5G 的遷移。大多數高階智慧型手機的功能也正在擴展到低階智慧型手機，因為這些創新功能通常需要更先進的技術。與我們的客戶一起，我們將逐步提高我們在智慧型手機市場的份額。

As to high-performance computing as a growth driver, as the digital trend develops in all industries worldwide today, silicon IC will needed to take up vast amount of computation load in the future. We estimate computing opportunities will support about one quarter of our growth in the next five years.

而對於高效能運算作為成長動力，隨著當今全球各行各業數位化趨勢的發展，未來矽片將需要承擔大量的運算負荷。我們估計，未來五年內計算機會將支援我們約四分之一的成長。

In TSMC, we work with IC innovators around the world. We see momentum building up in the computing space for our customers. In May this year, seven companies announced that they are forming an interconnect consortium called CCIX to enable heterogeneous computing in datacenters.

在台積電，我們與世界各地的積體電路創新者合作。我們看到，我們的客戶在計算領域正在不斷壯大。今年 5 月，七家公司宣布成立名為 CCIX 的互連聯盟，以實現資料中心的異質運算。

In China, cloud leaders and technology companies formed Green Computing Consortium, aiming to develop energy-efficient datacenters. We also see increasing activities around machine learning, where system companies differentiate down to the silicon level. TSMC, as a foundry player, focuses on enabling our customers' innovation through providing leading-edge technology.

在中國，雲端運算領導者和科技公司成立了綠色運算聯盟，旨在開發節能資料中心。我們也看到圍繞機器學習的活動日益增多，系統公司在矽片層面上實現了差異化。台積電作為一家晶圓代工企業，致力於透過提供尖端技術來支援客戶的創新。

Other innovations in computing area are augment reality, virtual reality, gaming and ADAS, or advanced driver assistance systems. TSMC has been developing suitable process technologies and design enablement for all those innovations.

計算領域的其他創新包括擴增實境、虛擬實境、遊戲和 ADAS（高級駕駛輔助系統）。台積電一直在為所有這些創新開發合適的製程技術和設計支援。

Above is my message. Thank you. Now I turn the microphone to C.C.

以上是我的留言。謝謝。現在我把麥克風轉向 C.C.

Thank you, Mark. Good afternoon, ladies and gentlemen. Let me start with our 16-nanometer status. We continue to ramp 16-nanometer with defect density and a cycle time better than our plan. Major applications this year include mobile processor, cellular baseband, graphic and video game.

謝謝你，馬克。女士們、先生們，午安。讓我先介紹一下我們的 16 奈米現狀。我們繼續提升 16 奈米工藝，其缺陷密度和週期時間均優於我們的計劃。今年的主要應用包括行動處理器、蜂窩基帶、圖形和視頻遊戲。

We are happy to report that we have been recognized by a major customer for our contribution to the success of a deep learning chip using TSMC's 16 FinFET Plus.

我們很高興地報告，我們為採用台積電 16 FinFET Plus 的深度學習晶片的成功所做出的貢獻得到了主要客戶的認可。

We expect our 16-nanometer business will continue to increase in the second half of this year, with most of the products adopting our 16FFC, which is a low-power and low-cost version of the 16-nanometer process. We expect to generate more than 20% wafer revenue from 16-nanometer in this year.

我們預計今年下半年我們的16奈米業務將繼續成長，大多數產品將採用我們的16FFC，這是16奈米製程的低功耗、低成本版本。我們預計今年16奈米晶圓的營收將佔總營收的20%以上。

Now 28-nanometer. Our 28-nanometer has entered its sixth year of volume production. TSMC's 28HPC and HPC Plus have been widely adopted by most of the mobile application processor suppliers for the faster-growing mid- to low-end smartphones and other applications, such as Wi-Fi, digital TV set-top box, flash controller, etc. With our differentiated technology, stable yield, short cycle time and large-capacity support, we expect stronger demand for our 28-nanometer will last through this year.

現在是28奈米。我們的28奈米已經進入量產的第六年。台積電的28HPC和HPC Plus已被大多數行動應用處理器供應商廣泛採用，用於成長更快的中低階智慧型手機和其他應用，例如Wi-Fi、數位電視頂盒、快閃記憶體控制器等。憑藉我們差異化的技術、穩定的產量、較短的周期時間和大容量支持，我們預計今年對28奈米的強勁需求將持續下去。

Now let me touch a little bit on our competiveness for those technologies which have been in volume production, namely 16-nanometer, 28-nanometer and so on. TSMC continues to improve our technologies and develop new variants, even after these technologies have entered mass-production stage.

現在我來稍微談談我們在已經量產的技術方面的競爭力，即16奈米、28奈米等。即使這些技術已經進入量產階段，台積電仍繼續改進我們的技術並開發新的變體。

For example, to meet the changing market requirements, we introduced a low-cost, low-power version 16FFC this year after 16-nanometer started volume production last year. We also lowered the operating voltage of our 16-nanometer process to 0.5 volt to meet the requirement for IoT applications.

例如，為了滿足不斷變化的市場需求，在去年16奈米開始量產後，我們今年推出了低成本、低功耗版本16FFC。我們也將16奈米製程的工作電壓降低至0.5伏，以滿足物聯網應用的要求。

Similarly, at 28-nanometer node, we introduced 28HPC and 28HPC Plus for the low-power solutions while keeping the speed at almost the same level. For 40-nanometer, TSMC also introduced 40 low power for low-power applications. For 55-nanometer and older node, we apply similar approaches as well.

同樣，在 28 奈米節點，我們引入了 28HPC 和 28HPC Plus 用於低功耗解決方案，同時保持速度幾乎保持在相同的水平。針對40奈米，台積電也針對低功耗應用推出了40奈米低功耗製程。對於 55 奈米及更早的節點，我們也採用類似的方法。

Since we are able to start volume production ahead of our competition, TSMC has enjoyed a substantial advantage in learning curve. We are able to accumulate enough experience faster than our foundry peers. And therefore we can better improve our cost and device performance for each technology node. Because of the learning curve advantage, we believe we are highly competitive in both performance and cost.

由於我們能夠先於競爭對手開始量產，台積電在學習曲線方面享有相當大的優勢。我們能夠比我們的代工廠同行更快地累積足夠的經驗。因此我們可以更好地改善每個技術節點的成本和設備效能。由於學習曲線優勢，我們相信我們在性能和成本方面都具有很強的競爭力。

Now let me talk about our -- another growth driver, which is IoT, in addition to mobile and high-speed computation market, which Mark just explained. Driven by innovative business model, we expect the diversified and fragmented IoT applications will become one of the most important growth drivers for future semiconductor business.

現在讓我來談談我們的另一個成長動力，即物聯網，除了馬克剛才解釋的行動和高速運算市場之外。在創新商業模式的驅動下，我們預期多樣化、分散化的物聯網應用將成為未來半導體業務最重要的成長動力之一。

IoT applications require not only the collection of huge amount of data, but also the ability to analyze the data and utilize the data to improve our daily lives, such as security and health. In the near term we can see smart band and smart watch for healthcare and smart meter for efficient energy and cost saving. Longer term, we expect ADAS and autonomous driving be widely adopted; smart home, smart city. Robot, drones are also progressing along.

物聯網應用不僅需要收集大量數據，還需要具備分析數據和利用數據改善我們日常生活（例如安全和健康）的能力。短期內，我們可以看到用於醫療保健的智慧手環和智慧手錶以及用於高效節能和節省成本的智慧電錶。從長遠來看，我們預計 ADAS 和自動駕駛將被廣泛採用；智慧家庭、智慧城市。機器人、無人機也在不斷進步。

We believe TSMC's specialty technology development in CMOS image sensor, MEMS, RF, power management IC and emerging memory are well positioned to capture the IoT opportunities.

我們相信台積電在CMOS影像感測器、MEMS、RF、電源管理IC和新興記憶體方面的專業技術開發能夠很好地抓住物聯網機會。

Now let me talk about our advanced back-end technology, first on InFO. We are in volume production now. Our focus today is continuing yield improvement and cost reduction. We expect InFO will contribute more than $100m revenue in 4Q this year, with a moderate gross margin. At the same time we are also developing the next generation InFO technology for products planned for next year and beyond.

現在讓我來談談我們先進的後端技術，首先是 InFO。我們現在已進入量產階段。我們今天的重點是繼續提高產量和降低成本。我們預計 InFO 今年第四季的營收將超過 1 億美元，且毛利率適中。同時，我們也正在為明年及以後計劃推出的產品開發下一代 InFO 技術。

Now, on CoWoS, we have seen strong momentum from high-memory bandwidth and high performance-driven applications, such as the networking, deep learning and artificial intelligence. While our CoWoS is still in small volume production for those very high-speed applications, we see the potential of demand increase as well. We expect to support our customer to grow their business in the high-speed computing space with our CoWoS as part of our advanced technology offer.

現在，在 CoWoS 上，我們看到了來自高記憶體頻寬和高效能驅動應用的強勁勢頭，例如網路、深度學習和人工智慧。雖然我們的 CoWoS 仍處於針對那些超高速應用的小批量生產階段，但我們也看到了需求成長的潛力。我們希望透過我們的 CoWoS 作為我們先進技術產品的一部分來支援我們的客戶在高速運算領域拓展業務。

Thank you for your attention.

感謝您的關注。

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. Questions will be taken both from the floor and from the call.

好的。我們的準備聲明到此結束。在我們開始問答環節之前，我想提醒大家每次提問限制為兩個，以便所有參與者都有機會提問。問題將從現場和電話中回答。

Should you wish to raise your questions in Chinese, I will translate it to English before our management answers your question. For those of you on the call, if you would like to ask a question, please press the star then one on your telephone keypad now. Questions will be taken in the order in which they were received. If at any time you would like to remove yourself from the queue, please press the pound or the hash key. So star and one if you want to ask questions and hash key if you want to remove yourself.

如果您想用中文提出問題，我會將其翻譯成英文，然後我們的管理層才會回答您的問題。對於通話中的各位，如果您想提問，請立即按下電話鍵盤上的星號，然後按下一。我們將按照收到問題的順序進行處理。如果您想隨時退出佇列，請按井號鍵或雜湊鍵。因此，如果您想提問，請加星號；如果您想刪除自己，請加哈希鍵。

All right. Now let's begin the Q&A session. I think we will have the pessimistic analyst from JPMorgan to ask the first question, Gokul?

好的。現在我們開始問答環節。我認為我們將讓摩根大通的悲觀分析師提出第一個問題，Gokul？

Thank you very much. First of all on smartphones, and growth coming from smartphones being half of the growth and computer also contributing to a quarter of the growth, could you talk about what is the growth picture for the whole Company? Are we going to maintain the 5% to 10% growth that we are predicting for this year into the next five years? Or how should we think about the growth pattern?

非常感謝。首先關於智慧型手機，智慧型手機的成長佔了成長的一半，而電腦也貢獻了四分之一的成長，您能談談整個公司的成長前景嗎？我們是否會將今年預測的5%至10%的成長率維持到未來五年？或者說我們應該如何思考成長模式？

And I have a follow up on the computer side as well.

我也跟進了計算機方面。

Okay. Thank you. You talk about the growth model, right? Okay. We do have a growth forecast within the Company, but let me share you with the big picture. In our model, we -- semiconductor has been staying on 0% growth for the past two years, but next five years we estimate about between -- still about between 2% or 2% plus to 3%.

好的。謝謝。您談論的是成長模式，對嗎？好的。我們公司內部確實有一個成長預測，但請讓我與你們分享一下整體情況。在我們的模型中，半導體在過去兩年保持 0% 的成長率，但我們估計未來五年的成長率仍將在 2% 或 2% 以上到 3% 之間。

And the fabless company, because of the business model advantages and the leading-edge technology advantages, they will grow about 5% per year in the next five years. And semiconductor -- and TSMC with this, not only the fabless company but also the system company and the -- and IDM outsourcing -- we estimate will grow -- our current estimate will be about between 5% to 10% depending on the macroeconomics and the semiconductor events.

而無晶圓廠公司因為商業模式優勢和領先的技術優勢，未來五年他們將以每年5%左右的速度成長。而半導體——包括台積電，不僅是無晶圓廠公司，還有系統公司和——以及IDM外包——我們估計將會成長——我們目前的估計將在5%到10%之間，具體取決於宏觀經濟和半導體事件。

This model is assuming that there is no killer application happen in the next five years. Okay? And as to the background of this growth model, we have -- we are focusing on four areas, as I presented to you earlier. First is the smartphone, mobile devices, mostly smartphones. And that will drive about the growth -- 50% of that growth in the next five years.

此模型假設未來五年內不會出現殺手級應用。好的？至於這個成長模式的背景，正如我之前向大家介紹的，我們將重點放在四個領域。首先是智慧型手機、行動設備，主要是智慧型手機。這將推動未來五年 50% 左右的成長。

And the high-performance computing, that will include the learning, artificial intelligence, the machine learning, AI, gaming, that will grow -- that will drive about 20% -- about a quarter of our driving growth in the next five years. And autonomous car and IoT and the rest will take up another quarter of the drive growth for the next five years. So this is the -- largely our growth model, yes.

高效能運算將包括學習、人工智慧、機器學習、人工智慧、遊戲，這些領域將會成長——這將推動我們未來五年約 20%——約四分之一的驅動成長。自動駕駛汽車、物聯網等將在未來五年佔據另外四分之一的驅動力。是的，這基本上就是我們的成長模式。

Just on the smartphone bit, are we -- I think we have seen smartphone estimates getting -- coming down for the last six quarters. Are we expecting that smartphone units stay at this 5% to 6% growth rate? Or could -- in think in most tech markets, once the saturation hits we get down to probably GDP growth rate, which is like 2% or something like that. Are we anticipating that? And is the future growth in smartphones primarily coming from content growth, which is still pretty decent?

就智慧型手機而言，我認為我們已經看到智慧型手機的估值在過去六個季度中有所下降。我們是否預期智慧型手機銷售成長率將維持在 5% 至 6% 之間？或者可以——想想在大多數科技市場中，一旦達到飽和，我們的 GDP 成長率可能就會下降到 2% 左右。我們預料到這一點嗎？未來智慧型手機的成長是否主要來自內容成長？內容成長是否仍相當可觀？

The -- indeed, the smartphone has been slowing down in the past six quarters, particularly for the high end. And actually -- but at the same time, the mid end, silicon content, is increasing very fast. And the unit number at the low end also increasing very fast. As far as the high end, we don't believe the trend for the last year drop will continue. Okay? Innovation will surface to drive the momentum of the unit growth.

事實上，過去六個季度智慧型手機的成長速度一直在放緩，尤其是高階智慧型手機。事實上 — — 但同時，中端矽含量正在快速增加。且低端的單位數量也增加得非常快。就高端而言，我們認為去年的下降趨勢不會持續下去。好的？創新將浮現，推動單位成長的動能。

So in total, we still estimate the growth rate will be about 5% in unit growth. Silicon content I mentioned is also about equally important. So that's the general model we have.

因此總體而言，我們仍然估計單位成長率將在5％左右。我提到的矽含量也同樣重要。這就是我們的通用模型。

Just a question on the compute side. Could you talk a little bit about the take off of the revenues, given that you're expecting tape-outs in first half next year? Typically the end market that you serve in compute, especially the datacenter compute, takes a bit longer for qualification, if you look at server market, for example. Are we anticipating revenues coming in with 7-nanometer in 2018 itself for compute, or could you talk about your revenue model for the compute part? Thanks.

這只是計算方面的一個問題。鑑於您預計明年上半年將推出新產品，您能否談談收入的成長？通常，如果您看一下伺服器市場，那麼您在計算領域服務的終端市場（尤其是資料中心運算）需要更長的時間來獲得資格。我們是否預期 2018 年 7 奈米科技本身就能為運算領域帶來收入，還是您能否談談計算部分的收入模式？謝謝。

The question is regarding the high-performance computing, how would that -- appears to be? At this point we think, first of all, many of the low-end servers has -- some of our smaller customer has penetrated already. But for the ballpark, the main portion of the server, I think it will wait for the 7-nanometer to get some share by our customers. But in the next -- at least in the next -- so 7-nanometer will happen in 2018 and afterwards, so it will start from 2019 and beyond. So it will -- for the datacenter I think it will be more a hockey stick beyond -- probably really bigger portion beyond 2020.

問題是關於高效能運算，它看起來是什麼樣的？在這一點上，我們認為，首先，許多低端伺服器已經——我們的一些較小的客戶已經滲透進來。但就大致而言，伺服器的主要部分，我認為需要等待 7 奈米才能從我們的客戶那裡獲得一些份額。但在接下來的——至少在接下來的——7 奈米將在 2018 年及之後出現，所以它將從 2019 年開始，甚至更久以後。所以對於資料中心來說，我認為到 2020 年以後，它的份額可能會更大。

So in the next five years, mostly are the computing of the cloud edge devices, of course including the networking, storage and other cloud edge devices I just mentioned. Okay. Thank you.

所以未來五年，大部分都是雲端邊緣設備的運算，當然也包括我剛才提到的網路、儲存等雲端邊緣設備。好的。謝謝。

Next we will have Credit Suisse, Randy Abrams, to raise the question.

接下來我們請瑞士信貸的蘭迪·艾布拉姆斯來提出這個問題。

Yes. Thank you. I wanted to ask the first one actually, another one on the growth drivers, just to get a feel for the base. The computing -- should we think of computing now just that computer end market that's 8% of revenue? Is that when you're thinking about computing, driving a quarter of the growth it's only 8% of revenue now? Like are we thinking the same definition?

是的。謝謝。實際上，我想問第一個人，另一個人關於成長動力的問題，只是為了了解基本狀況。計算－我們現在是否應該將計算視為僅佔收入 8% 的電腦終端市場？當您考慮計算時，它是否推動了四分之一的成長，而現在它只佔收入的 8%？就像我們思考的是同一個定義嗎？

And within computing, how much are you banking on ARM and IBM-based servers, versus some of the other things, like the deep learning, or if it's like the AR/VR graphics that you're banking on for most of that growth?

在運算領域，您對 ARM 和基於 IBM 的伺服器的依賴程度如何，相對於其他領域，例如深度學習，或者您是否依賴 AR/VR 圖形來實現大部分成長？

Can you repeat the question?

你能重複一下這個問題嗎？

Yes. So the question, the starting point -- is computing -- when you're referring to computing driving a quarter of the growth, is it 8% of revenue now we should think of your computing end market category? And for the growth, are you factoring most of that growth from the ARM IBM-based servers, or is most of it more from the VR/AR, AI type stuff?

是的。所以問題是，起點是計算——當您提到計算推動四分之一的成長時，它是否佔收入的 8% 現在我們應該考慮您的計算終端市場類別？對於成長，您是否認為大部分成長來自基於 ARM IBM 的伺服器，還是主要來自 VR/AR、AI 類型的東西？

Okay. When I talk about computing, it doesn't include a lot of PC or tablets or current computing. I am more category the high-performance computing part. Of course, datacenter, networking storage, but mostly it's in the next three years I think it will be mostly the machine learning, AI, augmented reality, gaming, those are -- those computing devices. Datacenter will not -- I don't think it will come out the big volume until 2018.

好的。當我談論計算時，它並不包括大量個人電腦或平板電腦或當前的計算。我更關注高效能運算部分。當然，還有資料中心、網路存儲，但我認為未來三年主要是機器學習、人工智慧、擴增實境、遊戲等運算設備。資料中心不會——我認為直到 2018 年它才會大規模推出。

Okay. The second question, I had a two-part question on the gross margin. For third quarter, if you could go into the factors. Sales are up 15% but the gross margin's flattish. If you could talk about the factors, say from InFO or ramp of 16-nanometer, what's driving the factors? You're not single leverage from Q2 to Q3 in gross margin with the higher sales?

好的。第二個問題，我對毛利率有兩個問題。對於第三季度，如果您可以深入分析這些因素。銷售額成長了 15%，但毛利率卻持平。如果您可以談論這些因素，例如從 InFO 或 16 奈米的提升來看，是什麼推動了這些因素？從第二季到第三季度，您的毛利率不是憑藉更高的銷售額實現的嗎？

And then the second part is as you ramp 10-nanometer next year -- this year you had the benefit of 16 being a more mature process, borrowing from 20, so would there be any margin impact on the first year of the 10-nanometer ramp in 2017?

然後第二部分是，當您明年開始採用 10 奈米工藝時——今年您受益於 16 奈米這一更成熟的工藝，借鑒了 20 奈米工藝，那麼 2017 年 10 奈米製程第一年的生產是否會對利潤產生影響？

So, Randy, you referred to the margin for the third quarter. As we are continual ramping 16-nanometer, so 16-nanometer will account for a bigger part of our revenue in third quarter versus the second quarter. As this year is only the second year of the 16 ramp, so it still has some dilution to corporate average gross margin. So this is a negative for third quarter.

那麼，蘭迪，你提到了第三季的利潤率。由於我們不斷推進 16 奈米技術，因此與第二季度相比，16 奈米技術將在第三季度佔據我們更大的收入份額。由於今年只是16項措施實施的第二年，因此對企業平均毛利率仍有一定稀釋作用。所以這對第三季來說是一個負面消息。

So most of it's just 16 and InFO?

所以大部分只有 16 和 InFO？

InFO is very small quantity, and the quantity comes on the line in fourth quarter.

InFO數量非常少，而且數量在第四季才會上線。

Okay.

好的。

C.C. was mentioning the fourth quarter will be bigger than $100m, with modest margin. So it will have some dilution as well, but it's very small.

C.C.提到第四季的銷售額將超過 1 億美元，利潤率也將保持適度。因此也會有一些稀釋，但幅度很小。

Okay. The second part was if any start-up impact on 10-nanometer next year, since this year 16 was second year and also helped by the 20 learning? So if 10 might have an impact?

好的。第二部分是，由於今年 16 是第二年，也得到了 20 年學習的幫助，那麼明年的 10 奈米是否會受到啟動影響？那麼 10 是否可能會產生影響？

Yes. The answer is yes. And we will start to mass produce 10-nanometer from the first quarter next year, so the whole year, the 10-nanometer margin will be below corporate average, so it will be a dilution factor for the next year, whole year.

是的。答案是肯定的。我們將從明年第一季開始量產10奈米，因此全年10奈米的利潤率將低於企業平均水平，這將成為明年全年的稀釋因素。

Okay. Thank you.

好的。謝謝。

Next question will be coming from Citigroup's Roland Shu.

下一個問題來自花旗集團的 Roland Shu。

Hi. Good afternoon, Mark, C.C. and Lora. The first question is on the high-performance computing. The onset for the ARM-based CPU for server won't be -- have a significant market share until 2020. At that time it's about 25% of the share. So that means on your -- for this ARM-based CPU in this high-performance computing probably won't be a very limited from now on to maybe 2018. And so that means on your -- for application processor point of view I think that you -- they actually will be using our 16-nanometer and even 10-nanometer, because our 7-nanometer I think will be in mass production from 2018.

你好。下午好，馬克，C.C.和洛拉。第一個問題是關於高效能運算的。基於 ARM 的伺服器 CPU 直到 2020 年才會開始佔據相當大的市場。屆時它的份額約為 25%。所以這意味著從現在到 2018 年，基於 ARM 的 CPU 在高效能運算方面可能不會受到太多限制。從應用處理器的角度來看，我認為他們實際上會使用我們的 16 奈米甚至 10 奈米，因為我認為我們的 7 奈米將從 2018 年開始大規模生產。

So my question is there any performance gap on the 16-nanometer or 10-nanometer in terms of this ARM-based CPU performance? So that's why -- for people cannot use -- adopt ARM-based CPU on the server or even on this high-performance computing quickly. Thank you.

所以我的問題是，就基於 ARM 的 CPU 性能而言，16 奈米和 10 奈米之間是否存在性能差距？這就是為什麼人們無法在伺服器上甚至在高效能運算上快速採用基於 ARM 的 CPU。謝謝。

On the ARM-based server, or anyway, the CPU chip for server indeed. To the main bulk of the CPU it will take, we will have to work with our customer on 7-nanometer and it is ongoing actively. Before that, I think there are customers working on 16 and even 28 to enter low-end server already also.

在基於ARM的伺服器上，或者無論如何，確實是用於伺服器的CPU晶片。對於所需的大部分 CPU，我們必須與客戶在 7 奈米上合作，而這項工作正在積極進行中。在此之前，我認為有些客戶已經在使用 16 甚至 28 進入低階伺服器。

But for the other high-performance computing application, really the entry technology is spread quite wide. Just take the ADAS, for example. 28-nanometer is prevailing entry for the ADAS technology in many of the high-end cars already. For machine learning, 16-nanometer, what you see already, high volume is on 16-nanometer in entry to developed market already. The gaming is already also entry in the 16-nanometer soon. It has just started in the 16-nanometer already.

但對於其他高效能運算應用來說，入門技術確實分佈得相當廣泛。就以 ADAS 為例。 28奈米已成為許多高端汽車中ADAS技術的主流技術。對於機器學習，16 奈米，正如您已經看到的，在進入已開發市場時，16 奈米的產量已經很高。遊戲也即將進入 16 奈米時代。 16奈米製程才剛起步。

So for other high-performance computing, the application will happen much earlier, already on 28 and 16, and 10 also. So that is different than the datacenter.

因此對於其他高效能運算來說，應用程式將會更早出現，已經在28和16上，還有10上。所以這與資料中心不同。

Okay. So for this high-performance computing will account for one-quarter of the -- on this five years' growth. So how big it will be from this high-performance CPU for server or for this data center?

好的。因此，高效能運算將佔未來五年成長的四分之一。那麼，用於伺服器或資料中心的高效能CPU會有多大？

Well that depends on how much growth we have, right? Right now I think it's currently -- because the forecast has a big range, between 5% to 10%, so it is very difficult to pin down a specific number. But it's about one-quarter of the growth portion.

嗯，這取決於我們的成長程度，對嗎？目前我認為——因為預測範圍很大，在 5% 到 10% 之間，所以很難確定一個具體的數字。但它約佔成長部分的四分之一。

On the ARM-based CPU in notebook or PC, I think the last quarter, Mark, you said you expect it will happen for maybe tablet first. So are you still seeing the same trend and how big it will contribute to our revenue for the next five years? I look at the transcript.

關於筆記型電腦或個人電腦中基於 ARM 的 CPU，馬克，我想上個季度您說過，您預計它可能會首先出現在平板電腦上。那麼您是否仍然看到同樣的趨勢以及它將在未來五年對我們的收入做出多大的貢獻？我看了看成績單。

Okay.

好的。

Yes, you (multiple speakers).

是的，你（多位發言者）。

Tablet, of course, the tablet has been -- application processor has been widely used in tablet already. It's only the tablet, the growth rate is not growing. The unit number is not growing. So you can calculate how much the revenue is already. So it's not a big number.

平板電腦，當然，應用處理器已經在平板電腦中廣泛應用。只是平板電腦，成長率沒有成長。單位數量沒有增加。所以你可以算一下收入已經是多少了。所以這不是一個很大的數字。

Okay. Thank you. My second question is I look at your second-quarter result. Your 65-nanometer revenue actually has been increased a lot. So I think there actually has been -- 65-nanometer revenue has been declined for continuous four quarters. And I think that will be a first quarter in maybe one or two years we see the growth. So can you elaborate me on why? What's the growth driver for this 65-nanometer increase in second quarter? Thank you.

好的。謝謝。我的第二個問題是查看您的第二季業績。你們的65奈米收入其實已經增加了很多。所以我認為實際上 65 奈米收入已經連續四個季度下降。我認為這可能是一兩年內第一個季度我們看到的成長。那你能詳細解釋一下原因嗎？第二季65奈米成長的動力是什麼？謝謝。

You are asking about 65-nanometer, why it's increased?

您問的是65奈米，為什麼要增加呢？

Yes.

是的。

It's because of some major customer, they have increased their demand in automotive area. I cannot say more than that.

這是因為一些主要客戶增加了對汽車領域的需求。我不能再多說了。

Will this be continue into second half or into next year?

這種狀況會持續到下半年或明年嗎？

I will believe so because the automotive business is a very steady business and it's increasing in the number of units and we enter into mass production since the beginning of this year. And that's why you see a sudden increase.

我會相信這一點，因為汽車業務是一個非常穩定的業務，其產量正在增加，而且我們從今年年初就開始了大規模生產。這就是你看到突然增加的原因。

Thank you.

謝謝。

Okay. Next question will be coming from Morgan Stanley, Charles. Charlie Chan.

好的。下一個問題來自摩根士丹利，查爾斯。陳查理。

Thanks for taking my question and congratulations for a great result. Very good execution. So first question is regarding your smartphone content per box. Last year you gave us some data points. I think this super helpful. So if you can quantify the absolute data of the contents in high end, mid and low end, I think that that would be very helpful. So last year a manager mentioned that the high-end content is around USD18 to USD19, mid end USD6 to USD6.4, low end is around USD3.4. So what do we see it today?

感謝您回答我的問題，並祝賀您取得了優異的成績。執行得非常好。所以第一個問題是關於每個盒子裡的智慧型手機容量。去年您給了我們一些數據點。我認為這非常有幫助。因此，如果您可以量化高端、中端和低端內容的絕對數據，我認為這將非常有幫助。去年一位經理提到高端內容約為 18 至 19 美元，中端約為 6 至 6.4 美元，低端約為 3.4 美元。那我們今天看到了什麼？

I probably cannot provide specific dollar, but what I can say is the high-end content will continue to increase even to the next year. And the mid end and low end is flattish.

我可能無法提供具體的金額，但我可以說的是，高端內容甚至到明年仍將繼續增加。中端和低端比較平坦。

Okay. And my next question is on CapEx spending. So you mentioned that increased CapEx for this year is actually for next-year demand. So is that more for 28-nanometer, 16-nanometer or 10-nanometer spending?

好的。我的下一個問題是關於資本支出。所以您提到今年增加的資本支出實際上是為了滿足明年的需求。那麼，28 奈米、16 奈米或 10 奈米的支出是否更多？

It's mainly for a 10-nanometer and 7-nanometer combined. We see a stronger demand than we earlier expect and we required to build more capacity next year.

主要針對10奈米和7奈米的結合。我們看到的需求比我們之前預期的要強勁，我們需要明年建造更多的產能。

Okay. Thanks. Just a very quick clarification about the management's comments. So firstly is on the cash dividend increase. You mentioned that your increase steady in coming years. How about next year? Is it a done deal?

好的。謝謝。我只是想對管理層的評論做一個非常快速的澄清。首先是現金股利增加。您提到未來幾年您的成長將保持穩定。明年怎麼樣？這事已經成定局了嗎？

I will not tell you how much. It's steadily increasing. You will know by then. Okay?

我不會告訴你有多少。它正在穩步增長。到時候你就會知道了。好的？

But will you start from next year? Will you start from next year?

但你會從明年開始嗎？你會從明年開始嗎？

Yes. We mean -- we have the increase in dividend quite a bit and we mean it. When we say steady increase we mean every year we'll consider to increase dividend.

是的。我們的意思是──我們的股利增加了不少，我們是認真的。當我們說穩定成長時，我們的意思是每年我們都會考慮增加股利。

Okay. Thanks. And Mark mentioned that you will --

好的。謝謝。馬克提到你會——

Well, Charlie, this is already going beyond two questions, please.

好吧，查理，這已經超出了兩個問題。

Okay. Sorry about that.

好的。很抱歉。

Sorry. Okay. The next question will be coming from Goldman Sachs, Donald Lu.

對不起。好的。下一個問題來自高盛的唐納德·陸。

(Spoken in foreign language). My first question is on EUV. I think TSMC and Mark has commented that TSMC plans to insert EUV at 7-nanometer if it is mature enough, before 2020, before 5-nanometer. My question is if another foundry, let's say, starts 7-nanometer with EUV versus TSMC insert EUV at 7-nanometer, what's the implications on performance and product? For example, will TSMC's customers have to redesign the 7-nanometer when you insert EUV in the second year of the technology ramp? So that's my first question.

（用外語說）。我的第一個問題是關於 EUV 的。我認為台積電和馬克已經評論說，如果足夠成熟的話，台積電計劃在 2020 年之前，在 5 奈米之前，在 7 奈米上引入 EUV。我的問題是，如果另一家代工廠以 EUV 開始 7 奈米工藝，而台積電在 7 奈米製程中插入 EUV，這對性能和產品有何影響？例如，當台積電在技術發展的第二年引入 EUV 時，台積電的客戶是否必須重新設計 7 奈米？這是我的第一個問題。

The second question is on demand. I think -- what is the smartphone as a percent of revenues in the third quarter? Will this be, let's say, 60% revenue or less? And also when you're saying in the next few years smartphone would be half of the growth, would you imply smartphone and non-smartphone will grow at about the same pace?

第二個問題是關於需求的。我認為——智慧型手機在第三季的收入中所佔百分比是多少？這會占到收入的 60% 或更少嗎？另外，您說未來幾年智慧型手機將佔成長的一半，您是否意味著智慧型手機和非智慧型手機將以大致相同的速度成長？

Okay. On the first question, on EUV, our 7-nanometer will be qualified first quarter next year, so it's only three quarters from now. Definitely EUV will not be ready. And our customer product tape-out will happen in the first half next year. Definitely we cannot put our customer at risk using EUV. So this is because we are very aggressive in delivering 7-nanometer, and indeed, adoption is very wide range.

好的。關於第一個問題，關於 EUV，我們的 7 奈米將於明年第一季通過認證，所以從現在起只有三個季度了。 EUV 肯定還沒準備好。我們的客戶產品將於明年上半年投產。我們絕對不能讓客戶面臨使用 EUV 的風險。這是因為我們非常積極地推出 7 奈米技術，而且其應用範圍確實非常廣泛。

Our plan to aggressively using EUV will be in 5-nanometer, where the 5-nanometer will start -- we'll finish qual (qualification) in the first half of 2019, and so we're already starting 5-nanometer development. And EUV at this time, we cannot use that as a volume for R&D, because doing R&D, a lot of activity, a lot of activity going on. So we choose that we aggressively get into 7-nanometer without EUV. And we extensively target EUV on 5-nanometer.

我們計劃在 5 奈米階段積極使用 EUV，5 奈米階段將從這裡開始——我們將在 2019 年上半年完成資格認證，因此我們已經開始了 5 奈米的開發。目前，我們不能將 EUV 作為研發的規模，因為進行研發需要進行大量的活動。因此，我們選擇在沒有 EUV 的情況下積極進入 7 奈米領域。我們廣泛瞄準 5 奈米的 EUV。

Yes, indeed, some of our customer -- one of our customer planned the EUV on their 7-nanometer. But that is only very -- schedule-wise it's very similar to our -- maybe a little bit ahead of our 5-nanometer, a few quarters. But our 5-nanometer is two steps down. The density is very aggressive, using EUV, and learning after 7-nanometer will be very safe on the 5-nanometer.

是的，我們的一些客戶——我們的一個客戶確實計劃在他們的 7 奈米上使用 EUV。但從時間表來看，這只是非常相似——可能比我們的 5 奈米提前了幾個季度。但我們的 5 奈米卻落後了兩步。密度非常激進，使用EUV，在7奈米之後學習在5奈米上將非常安全。

Had the EUV available before 2020, we consider using our 7-nanometer technology as a base to adopt an EUV for probably the second-wave products. But as far as -- but we want to minimize the design changes so that all the customers coming to our 7-nanometer will be easily adopt what we can reap from the EUV on 7-nanometer.

如果 EUV 在 2020 年之前就已面世，我們會考慮以我們的 7 奈米技術為基礎，在第二波產品中採用 EUV。但就目前而言——但我們希望盡量減少設計變更，以便所有使用我們 7 奈米的客戶都能輕鬆採用我們在 7 奈米 EUV 上所能獲得的優勢。

So that is our plan. I think we develop our technology at the best timing for our customers' products. So that is our current plan.

這就是我們的計劃。我認為我們在最適合客戶產品的時機來開發我們的技術。這就是我們目前的計劃。

Second question is on smartphone as a percent of revenue in third quarter after Apple ramp. And also would you imply smartphone/non-smartphone will grow at the same rate?

第二個問題是蘋果銷售成長後，智慧型手機在第三季的營收中所佔百分比。您是否也暗示智慧型手機/非智慧型手機將以相同的速度成長？

I don't know about the third quarter, but generally we -- currently the smartphone is about 55% of the corporate revenue -- wafer revenue, okay? And yes, if -- the growth in the next five years, smartphone-related, will be half of that. Yes.

我不知道第三季的情況，但總的來說，目前智慧型手機約占公司收入的 55%——晶圓收入，好嗎？是的，如果——未來五年智慧型手機相關的成長將是這個數字的一半。是的。

Related to this, what about earnings volatility, because, for 2016 or especially 10-nanometer, your largest customer will be essentially dominating this particular node? So if this customer has a seasonal or inventory issues, how can TSMC fill the leading-edge capacity with very limited number of customers?

與此相關，獲利波動如何？因為對於 2016 年或特別是 10 奈米，您的最大客戶基本上將主導這個特定節點？那麼，如果這個客戶有季節性或庫存問題，台積電如何才能在客戶數量非常有限的情況下填補前沿產能呢？

I think, first of all, we are everyone's foundry. Our customer covers all areas of the application. We do have big customers. That is not new. I think your question is the volatility of the big customers (multiple speakers)?

我認為，首先我們是大家的代工廠。我們的客戶涵蓋了應用的所有領域。我們確實有大客戶。這並不是什麼新鮮事。我認為您的問題是大客戶的波動性（多位發言者）？

Yes. For 10-nanometer, let's say, your largest customer takes 80% of the capacity. And if he has two seasonal or inventory issues then you will then fillit.

是的。對於 10 奈米，假設您的最大客戶佔用了 80% 的產能。如果他有兩個季節性或庫存問題，那麼你就會填補。

I see. Well that's why we design our 7-nanometer, equipment-wise, is 95% convertible. So ballpark is -- can consider, investment-wise, 10-nanometer and 7-nanometer can be converted easily. So that's how we minimize the volatility of the 10-nanometer.

我懂了。這就是我們設計 7 奈米的原因，從設備角度來看，它是 95% 可轉換的。所以大概是——從投資角度考慮，10 奈米和 7 奈米可以輕鬆轉換。這就是我們將 10 奈米的波動性降至最低的方法。

Next question will come from Deutsche Bank's Michael Chou.

下一個問題來自德意志銀行的 Michael Chou。

Hey, Lora. One question. Do you expect the ASP increase for this year? ASP increase for this year?

嘿，洛拉。一個問題。您預計今年的平均售價會上漲嗎？今年的平均售價會上漲嗎？

You're asking ASP?

你問的是 ASP 嗎？

Yes, ASP increase for this year, for whole year.

是的，今年、全年的平均售價都會上漲。

You're talking about a blended ASP?

您說的是混合 ASP？

Blended ASP.

混合 ASP。

Yes. We expect blended ASP will go up this year.

是的。我們預計今年混合平均售價將會上漲。

Would it be low single digit or --?

它會是低個位數還是--？

I prefer not to quantify that.

我不想量化這一點。

Thanks. Second question. C.C., you mentioned the second generation of InFO for next-year product. Would that be for 7-nanometer product or 10-nanometer?

謝謝。第二個問題。 C.C.，您提到了明年產品的第二代 InFO。這是針對 7 奈米產品還是 10 奈米產品？

Starting with 10.

從 10 開始。

Starting with 10. Right. So it will start to have revenue contribution next year, second stage?

從 10 開始。對。那麼，第二階段，明年它就會開始貢獻收入嗎？

It should have.

應該有。

The first half or second half?

上半場還是下半場？

Second half probably more probably.

下半場的可能性更大。

Thank you.

謝謝。

All right, I think we will start questions that has been queuing in the line for quite some time. Operator, could you please have the first caller on the line?

好的，我想我們可以開始回答那些已經排隊很久的問題了。接線生，請您讓第一位來電者接通電話好嗎？

Brett Simpson, Arete Research.

布雷特·辛普森（Brett Simpson），Arete Research。

Thanks very much. With regards to InFO and the CoWoS, as I see it, you're moving from selling wafers to selling turnkey chips on a good die, which is a big change in your business model. If you look out over the next few years when you ramp 7-nanometer, what portion of your leading-edge sales might be adopting this new turnkey model? And when it comes to DRAM memory in package, does TSMC take responsibility for sourcing and holding inventory for memory, or do you expect your customers to fix this? Thank you.

非常感謝。關於 InFO 和 CoWoS，在我看來，你們正在從銷售晶圓轉向銷售優質晶片上的交鑰匙晶片，這對你們的商業模式來說是一個巨大的轉變。如果您展望未來幾年在 7 奈米製程上的進展，那麼您的尖端銷售額中有多少部分可能會採用這種新的交鑰匙模式？當涉及封裝中的 DRAM 記憶體時，台積電是否負責採購和持有記憶體庫存，或者您是否希望您的客戶解決這個問題？謝謝。

Okay. Let me repeat Brett's question. He's asking how much of our 7-nanometer business will also be using either InFO or CoWoS that TSMC's providing a turnkey solution? What's the proportion of our 7-nanometer business that will be of this type of business model?

好的。讓我重複一下布雷特的問題。他問，我們的 7 奈米業務中有多少將使用台積電提供的交鑰匙解決方案的 InFO 或 CoWoS？在我們的7奈米業務中，這種商業模式的比例是多少？

And then the second part is about memory in the packaging solution. If memory has any problem, whether it will be TSMC or the customer who is responsible for that problem.

第二部分是關於封裝解決方案中的記憶體。如果記憶體出了問題，到底是台積電的責任還是客戶的責任。

Well let me answer the 7-nanometer, that how much of the percentage who use CoWoS and the InFO together, or it's just the CoWoS?

那麼讓我來回答一下 7 奈米，有多少比例的人同時使用 CoWoS 和 InFO，或者只是 CoWoS？

Just turnkey solution.

只是交鑰匙解決方案。

Just turnkey solution. Probably quite a big portion because of -- we offer InFO for very cost-effective packaging service and that we are here to improve the total packaging, the efficiency in terms of chip area or in terms of a thickness.

只是交鑰匙解決方案。可能很大一部分原因是——我們提供 InFO 來進行非常經濟高效的封裝服務，並且我們致力於改善整體封裝、提高晶片面積或厚度方面的效率。

For CoWoS, you are here up to 7-nanometer high computation space to compete in a very high-performance area. That would be a smaller percentage, but we see the potential. That's what I just mentioned in my presentation. So put altogether, I would expect quite a significant amount of 7-nanometer product will be using either CoWoS or InFO. That's one thing.

對於 CoWoS，您可以在高達 7 奈米的高運算空間中在非常高效能的領域中競爭。這個比例可能較小，但我們看到了潛力。這就是我剛才在演講中提到的。所以總的來說，我預計相當一部分 7 奈米產品將使用 CoWoS 或 InFO。這是一回事。

Talking about the memory, stacking together with 7-nanometer chips, we -- certainly we offer the turnkey solution. But we are very flexible in working with the customer that all the possible combinations are all possible.

說到內存，與 7 奈米晶片堆疊在一起，我們——當然我們提供交鑰匙解決方案。但我們與客戶合作時非常靈活，所有可能的組合都是可能的。

Does that mean that you would purchase the memory and book the memory sale within the overall package, or would you leave your customers to purchase the memory and take inventory risk?

這是否意味著您會購買內存並在整個包裝內預訂內存銷售，還是會讓您的客戶購買內存並承擔庫存風險？

Well let me see if I hear you correctly. You are asking whether or not we are paying for the memory and then charge the customer as part of the revenue that we obtain from InFO or it is separated?

好吧，讓我看看我是否聽清楚了。您問的是，我們是否先支付內存費用，然後向客戶收取費用，作為我們從 InFO 獲得的收入的一部分，還是將其分開？

Exactly. Yes.

確切地。是的。

Okay.

好的。

Okay. We don't buy the memory per se. We work with the memory supplier so that their spec, in terms of mechanical stress, in terms of a lot of things the flatness or those kind of things. We work with them but we don't buy memory and resell to the customer. However, we are responsible to stacking them together and as a whole packaging to our customer.

好的。我們並不購買內存本身。我們與記憶體供應商合作，以便了解他們的規格，包括機械應力、平整度或諸如此類的許多方面。我們與他們合作，但我們不會購買內存並轉售給客戶。但是，我們有責任將它們堆疊在一起並作為整體包裝交給我們的客戶。

Thank you. And maybe just one final question. When you look at TSMC 7-nanometer for high-performance compute, can you give us your perspective? How would you technically compare them to Intel's 10-nanometer, which will be in production relatively similar timescales? Yes. Thank you.

謝謝。也許還有最後一個問題。當您考慮台積電 7 奈米高效能運算時，您能為我們提供您的看法嗎？從技術角度來說，您如何將它們與英特爾的 10 奈米進行比較？它們的生產時間表相對相似。是的。謝謝。

Can you repeat the question?

你能重複一下這個問題嗎？

Yes. How do we compare our 7-nanometer performance and whatever the characteristics versus Intel's 10-nanometer, which Brett believes that timeframe-wise we are about to offer in these two technologies about the same time.

是的。我們如何比較我們的 7 奈米性能和特性與英特爾的 10 奈米，Brett 認為從時間角度來看，我們將在大約同一時間推出這兩種技術。

Well you have to ask our customers. I cannot speak for them. They have -- they definitely have their plan and we deliver our technology. And of course, as you know, they deliver their architecture differentiations. So really the end product performance depends on multiple factors. So I cannot speak for my customers at this point on this.

嗯，你必須問我們的客戶。我不能代表他們發言。他們肯定有他們的計劃，我們提供我們的技術。當然，正如您所知，他們提供了其架構差異化。因此最終產品的性能實際上取決於多種因素。因此，目前我無法代表我的客戶談論此事。

Okay. Let's move to the next caller on the line. Operator, please.

好的。讓我們接聽下一位來電者。接線員，請說。

Steven Pelayo, HSBC.

匯豐銀行的史蒂文‧佩拉約 (Steven Pelayo)。

Yes, first question on 28-nanometer. It's still your largest segment, but it did decline last year, yet the total Company still managed to grow about 10% or more in 2015. What do you think for 28-nanometer this year? What type of growth -- I assume you think it's going to grow this year -- are you expecting?

是的，第一個問題是關於 28 奈米的。它仍然是你們最大的業務部門，但去年確實下滑了，而整個公司在 2015 年仍然實現了約 10% 或更多的成長。您認為今年 28 奈米的發展如何？我猜您認為今年會出現什麼類型的成長？您預計會是什麼類型的成長？

Steven, we really cannot hear you that well. Can you move a little bit away from the microphone? You're asking about revenue contribution from different geometries.

史蒂文，我們確實聽不清楚。你能離麥克風稍遠一點嗎？您詢問的是不同幾何形狀的收入貢獻。

Maybe you can hear me a little better now.

現在你也許可以聽清楚一點了。

Yes. Please.

是的。請。

No, I was asking specific to 28-nanometer node. It's still your largest node and yet it declined last year. And I was asking for this year, do you expect it to grow and by how much?

不，我問的是具體 28 奈米節點的問題。它仍然是最大的節點，但去年卻有所下降。我想問的是，您預計今年它會成長嗎？增長多少？

Okay. Whether or not we will grow 20-nanometer and by how much in this year?

好的。今年我們是否會發展20奈米，發展多少？

Correct.

正確的。

Well, Steven, in fact, we deliberately combine 16-nanometer with 20-nanometer and we report that as one node, so we do not separate that. Sorry.

嗯，史蒂文，事實上，我們故意將 16 奈米與 20 奈米結合起來，並將其報告為一個節點，所以我們不會將它們分開。對不起。

I was saying specifically 28-nanometer. That's your largest node. Do you expect that to grow?

我具體說的是 28 奈米。這是最大的節點。您預計這一數字還會成長嗎？

28-nanometer? I see. Sorry. 28.

28奈米？我懂了。對不起。 28.

Yes.

是的。

28-nanometer. Do we grow 28-nanometer and by how much this year?

28奈米。今年我們會在 28 奈米方面有所發展嗎？會發展多少？

Correct.

正確的。

While Lora is checking with the number, all I can say is our revenue this year slightly lower than last year. Slightly. But percentage-wise, because our revenue increased, so the percentage of the 28-nanometer revenue --

當 Lora 核對數字時，我只能說我們今年的收入比去年略低。輕微地。但從百分比來看，由於我們的收入增加了，所以 28 奈米收入的百分比——

C.C., actually, according to our forecast, 28-nanometer, dollar-wise, will be higher this year than last year.

C.C.，實際上，根據我們的預測，今年 28 奈米的價格將高於去年。

Will be higher?

會更高嗎？

Yes.

是的。

Okay. Good. Okay. As I said, stronger demand in the second half.

好的。好的。好的。正如我所說，下半年需求會更強勁。

So I confirm that. Okay.

所以我確認了這一點。好的。

I apologize.

我很抱歉。

Okay. Slight growth. That's fine. The reason why I'm asking the question is really to talk a little bit about above 28-nanometer. Competitors like SMIC are growing very fast this year and their capacity constraint, they don't really have any 28-nanometer really to speak of. So what's going on with the above 28-nanometer nodes? So above 28-nanometer, it seems like maybe TSMC's a big share. Is that right? Is that just China's influence? How would you respond to that question?

好的。略有增長。沒關係。我問這個問題的原因實際上是想談談 28 奈米以上的事情。中芯國際等競爭對手今年發展非常快，但由於產能限制，他們實際上沒有任何 28 奈米技術可言。那麼上述28奈米節點的情況如何呢？因此，在 28 奈米以上領域，台積電似乎佔有很大的份額。是嗎？這僅僅是中國的影響嗎？您會如何回答這個問題？

All right. His question is for bigger nodes, bigger than 28-nanometer, how does TSMC -- what's our strategy compared to other foundries who are growing shares in those bigger nodes?

好的。他的問題是，對於更大的節點，大於 28 奈米，台積電如何——與其他在更大節點中份額不斷增長的代工廠相比，我們的策略是什麼？

Okay. For the older generations, our strategy is simple. We don't particularly to increase the capacity. We -- instead, we develop some derivative technology, such as in the CMOS image sensor, embedded Flash, power management IC. So to keep that whole capacity fully loaded, that's our strategy right now. We don't substantially increase the capacity as other foundry peers do it.

好的。對於老一輩來說，我們的策略很簡單。我們並不特別想增加產能。相反，我們開發了一些衍生技術，例如CMOS影像感測器、嵌入式快閃記憶體、電源管理IC。因此，保持整個產能滿載運轉，這就是我們目前的策略。我們不會像其他代工廠同行那樣大幅增加產能。

And maintain good profitability.

並保持良好的獲利能力。

Okay. That's great.

好的。那太棒了。

Thank you. Okay.

謝謝。好的。

My last question, if I can just sneak in here, is about the cap -- the dividend. You're raising your dividend yet you're generating more free cash flow every year so you're growing your cash balance. And seriously, when does this become too much? When does it start to impact your goal of sustaining greater than 20% ROE? Is there an optimal cash level and an optimal capital structure we could talk about instead of focusing on a dividend payout ratio?

我的最後一個問題（如果我可以偷偷地問一下的話）是關於上限——股息。您正在提高股息，但每年都會產生更多的自由現金流，因此您的現金餘額也在增加。說真的，什麼時候這才算太多了？它什麼時候開始影響您維持 20% 以上的 ROE 的目標？我們是否可以討論最佳現金水準和最佳資本結構，而不是專注於股利支付率？

So Steven's question is we have been growing free cash flow every year and our cash balance continues to go up. What would be a capital structure of TSMC or a payout ratio?

所以史蒂文的問題是我們的自由現金流每年都在成長，而且我們的現金餘額也持續上升。台積電的資本結構或派息率是多少？

Steven, we don't use payout ratio. You know our dividend policy has alluded as sustainability and we have started to pay dividend since 2008 -- since 2004 actually. And there's a very long period of time we pay TWD3 every year for consecutive eight years, and then we significantly increased the dividend to TWD4.50 a year ago and then to TWD6 today. So if I look at from today's forecast, and we have confidence we can continue to grow our free cash flow every year, that is why I say the dividend policy will change from sustainable to sustainable and increasing. So that's the thinking that we have in mind.

史蒂文，我們不使用派息率。您知道我們的股息政策被稱為可持續性，我們從 2008 年就開始支付股息——實際上從 2004 年就開始了。很長一段時間裡，我們連續八年每年支付3新台幣的股息，然後我們在一年前將股息大幅提高到4.50新台幣，現在又提高到6新台幣。因此，如果我從今天的預測來看，我們有信心每年都能繼續增加我們的自由現金流，這就是為什麼我說股息政策將從可持續變為可持續和增加。這就是我們的想法。

The current TWD660b in cash, is that an excess amount that you need or what is an optimal cash level to run your business? That's my last question.

目前的 6,600 億新台幣現金，是您需要的超額金額嗎？還是經營業務的最佳現金水準是多少？這是我的最後一個問題。

The optimal cash position depends on what you do with your cash. I think for now our cash is mainly to support our organic growth. We may have some M&A but we don't know at this moment. So we will try to be a little bit conservative in keeping enough cash to do the both. One way to support a sustainable increase in dividend, on the other hand to have some buffer if there's M&A case.

最佳現金狀況取決於您如何使用現金。我認為目前我們的現金主要用於支持我們的有機成長。我們可能有一些併購，但目前我們還不知道。因此，我們會盡量保守一點，保留足夠的現金來同時完成這兩項任務。一方面可以支持股利的持續成長，另一方面，如果發生併購，也可以有一定的緩衝。

Thank you.

謝謝。

All right. Operator, let's move on to the next caller on the line, please.

好的。接線員，請讓我們接聽下一位來電。

Mehdi Hosseini, SIG.

邁赫迪·胡賽尼（Mehdi Hosseini），SIG。

Yes. Thanks for taking my question. Can you hear me okay?

是的。感謝您回答我的問題。你聽得到我說話嗎？

Yes, we can.

是的，我們可以。

Thank you. I have two questions, one on CapEx. A couple of years ago when you first started investing in 20-nanometer, there was a surge in CapEx as you were preparing 20-nanometer. Now it seems like 10-nanometer and 7-nanometer are pretty much comparable to 20-nanometer and 16-nanometer. And back then, a couple of years ago, after significant spending in 20-nanometer, then there was a period where your CapEx came in flat, or even last year it declined. Should we assume the same kind of CapEx spending looking forward, especially since 10-nanometer and 7-nanometer are comparable to 20-nanometer and 16-nanometer?

謝謝。我有兩個問題，一個是關於資本支出的。幾年前，當您第一次開始投資 20 奈米時，在準備 20 奈米時，資本支出激增。現在看來，10 奈米和 7 奈米與 20 奈米和 16 奈米相當。幾年前，在 20 奈米上投入大量資金之後，有一段時間資本支出持平，甚至去年還下降了。我們是否應該假設未來的資本支出是相同的，特別是因為 10 奈米和 7 奈米與 20 奈米和 16 奈米相當？

Can you repeat the question, please?

您能重複一下這個問題嗎？

Mehdi's question is when last time he saw TSMC having a surge in CapEx, that was the time when we built 20-nanometer, when we ramped 20-nanometer. He's asking whether same type of CapEx pattern will be repeated in the future when we ramp, say, for example, 10-nanometer.

Mehdi 的問題是，他上次看到台積電的資本支出激增是在我們建造 20 奈米、加速 20 奈米的時候。他問的是，當我們在未來提升製程水準（比如說 10 奈米）時，是否會重複相同類型的資本支出模式。

We don't believe so because, as Mark was mentioning, there's a very high percentage of conversion rate. So when we roll to the next generation of technology, a big part of it will be converted from the previous generation. So you will not see a step up type of things that we have experienced in the past; it will be gradually increase.

我們不這麼認為，因為正如馬克所提到的，轉換率非常高。因此，當我們轉向下一代技術時，很大一部分技術將從上一代技術轉換而來。所以你不會看到我們過去經歷過的那種升級的事情；將會逐漸增加。

Right. The step up is happening in 2016. So in 2017 your CapEx may not increase, actually may be flat or down as the conversion starts to take place. Is that correct?

正確的。這一增長發生在 2016 年。因此，隨著轉換的開始，2017 年您的資本支出可能不會增加，實際上可能會持平或下降。那正確嗎？

Whether 2017 CapEx will be flat or down compared to this year because of conversion.

由於轉換，2017 年的資本支出與今年相比是否會持平或下降。

It will not. It will not. As I just said earlier, I think you will not see a step up kind of things. But we will look at the business every year. And depending on how much leading-edge capacity we want to build in that year, also depending on the profile of the ramping, that's also another factor that will affect our CapEx. It's probably better to follow my earlier guidance that we believe in the next five years our CapEx intensity will be in the range of mid 30s.

不會。不會。正如我剛才所說，我認為你不會看到事情有所進展。但我們每年都會關注業務。並且取決於我們想要在那一年建造多少前沿產能，也取決於產能提升的概況，這也是影響我們資本支出的另一個因素。最好遵循我先前的指導，我們相信未來五年我們的資本支出強度將在 30% 左右。

Okay, now --

好的，現在——

Okay. Great. I have a follow-up question regarding the near-term trend. You said that the customer days of inventory is going to increase in Q3 and you're not sure about the sell-through. Is it going to take a couple more months to better determine if customers are over-building, or do we have to wait till January/February timeframe? How do you assess this because your commentary is a little bit confusing, especially regarding days of inventory?

好的。偉大的。我有一個關於近期趨勢的後續問題。您說第三季客戶庫存天數將會增加，但您不確定銷售率會如何。是否需要幾個月的時間才能更好地確定客戶是否過度建設，還是我們必須等到一月/二月的時間？您如何評價這一點，因為您的評論有點令人困惑，特別是關於庫存天數？

All right. Mehdi's question is how do we know whether or not the inventory that we are seeing today will be too much? Do we have to wait until next January or February to know, or do we have a method to assess?

好的。 Mehdi 的問題是，我們如何知道今天看到的庫存是否過多？是不是要等到明年一二月才能知道，還是有方法可以評估？

Well, indeed, we cannot see crystal about sell-through. What we have told you about the unit growth is really the sell-in, sell-in to the phone service providers. So sell-through, indeed, there are uncertainties. But we see the growth of -- we assume the growth of 6% increase. And the model we -- the inventory level we cited is assuming the sell-through is also a 6% increase. If this differs then the inventory level will also differ accordingly.

嗯，確實，我們無法清楚地了解銷售情況。我們告訴您的相關單位增長實際上是指銷售，即向電話服務提供者的銷售。所以銷售率確實存在不確定性。但我們看到了成長——我們假設成長率為 6%。我們引用的庫存水準模型假設銷售量也增加了 6%。如果情況不同，那麼庫存水準也會相應不同。

Thank you.

謝謝。

All right. Thank you, Mehdi. Now let's come back to the floor. The next question will be from Credit Lyonnais, Sebastian Hou.

好的。謝謝你，邁赫迪。現在讓我們回到正題。下一個問題來自里昂信貸銀行的 Sebastian Hou。

Thanks for taking my questions. My first question is to follow on the advanced backend technology. So C.C. guided this year fourth-quarter revenue of InFO will be above at least $100m. Can you give us some guidance for fourth quarter next year, and also the fourth quarter 2018 when InFO and CoWoS combined?

感謝您回答我的問題。我的第一個問題是跟進先進的後端技術。所以 C.C.預計今年InFO第四季營收將至少達到1億美元以上。您能否為我們提供明年第四季以及 InFO 和 CoWoS 合併時的 2018 年第四季的一些指導？

The fourth quarter this year is high-volume ramping. Following next year it's supposed to continue this kind of production, I believe. So next year, the whole year will be much better than just this quarter times four. You are talking about in 2018 CoWoS and InFO together, or 2017?

今年第四季是產量大幅提升的時期。我相信，明年之後它應該會繼續這種生產。因此，明年全年的表現將比本季的四個季度好得多。您說的是 2018 年的 CoWoS 和 InFO 一起舉辦，還是 2017 年的？

2018.

2018年。

2018. I believe CoWoS has a high potential but is still a small volume as compared with InFO. InFO is much more high-volume production, so most of the revenue will come from InFO.

2018. 我相信 CoWoS 具有很大的潛力，但與 InFO 相比規模仍然較小。 InFO 的生產量更大，因此大部分收入將來自 InFO。

Okay. So based on your fourth-quarter 2016 guidance, it will probably account for 1% to 2% of your 4Q revenue for InFO. So is there any -- in terms of revenue contribution percentage for 2018 in terms of InFO and CoWoS combined, would it be higher than this 1% to 2% run rate?

好的。因此，根據您 2016 年第四季的指導，它可能會佔 InFO 第四季營收的 1% 到 2%。那麼，就 2018 年 InFO 和 CoWoS 合併的收入貢獻百分比而言，是否會高於 1% 到 2% 的運行率？

I would hope so, but I don't know the 2018 revenue yet.

我希望如此，但我還不知道 2018 年的收入。

Okay. Thank you. And my second question is on the 7-nanometer and 10-nanometer. Six months ago, I remember I asked the questions and Mark and C.C. answered me that the 10-nanometer revenue contribution in 4Q next year will be higher than the revenue contribution of 20-nanometer back in fourth quarter 2014. So I wonder, does that still hold?

好的。謝謝。我的第二個問題是關於 7 奈米和 10 奈米的。我記得六個月前我問過這些問題，馬克和 C.C.回答我說，明年第四季 10 奈米的收入貢獻將高於 2014 年第四季 20 奈米的收入貢獻。所以我想知道，這種說法仍然成立嗎？

Elizabeth, can you repeat the question? I don't quite get it.

伊莉莎白，你能重複這個問題嗎？我不太明白。

Yes. Okay. Sebastian's question is compared to 2014 fourth-quarter revenue from 20-nanometer with 2017 fourth-quarter revenue from 10-nanometer, which one will be bigger?

是的。好的。 Sebastian 的問題是，2014 年第四季 20 奈米的收入與 2017 年第四季 10 奈米的收入相比，哪一個會更大？

Right now we -- the dollar-wise, we think it's bigger, but the percentage-wise is next year's business. So those numbers are too early to predict at this point. But 10-nanometer is very strong and we cannot give you a specific number for that. It would be around similar level, I think.

目前，從美元角度來看，我們認為規模更大，但從百分比角度來看，那是明年的業務。因此，現在預測這些數字還為時過早。但是 10 奈米非常強大，我們無法給出具體的數字。我認為，大概是類似的水平。

I think 4Q 2014, our 20-nanometer was 21%.

我認為 2014 年第四季我們的 20 奈米佔 21%。

Yes.

是的。

But 2014 compared to 2017 will be a smaller year overall-wise.

但從整體來看，2014 年與 2017 年相比規模較小。

Okay. I understand. And given that you have more tape-outs on the end design -- tape-outs on the 7-nanometer compared to 10-nanometer, so we could assume that by fourth quarter 2018, the 7-nanometer revenue contribution, or in dollar amounts, should be a lot higher than 10-nanometer contribution fourth quarter 2017.

好的。我明白。考慮到最終設計的流片數量更多——7 奈米的流片數量比 10 奈米的多，因此我們可以假設，到 2018 年第四季度，7 奈米的收入貢獻（或以美元金額計算）應該比 2017 年第四季的 10 奈米貢獻高得多。

This is 2018 and we are middle of 2016, Sebastian.

塞巴斯蒂安，現在是 2018 年，而我們正處於 2016 年中。

Yes, but --

是的，但是——

Whatever the guidance we can give you may not be reliable.

無論我們給您什麼指導都可能不可靠。

But you guys have a very long visibility, I thought so.

但你們的能見度非​​常高，我是這麼認為的。

Not that long. Not two and a half years.

沒那麼久。還不到兩年半。

Okay.

好的。

But I think we will going through ramp, 10-nanometer going through ramp next year. And 7-nanometer will -- 7-nanometer and 10-nanometer will continue the ramp in 2018. Okay? Thank you.

但我認為我們明年將迎來發展高峰，10奈米將迎來發展高峰。 7 奈米和 10 奈米將在 2018 年繼續成長。對嗎？謝謝。

Okay. Thanks.

好的。謝謝。

Okay. Next question will be a follow-up from Morgan Stanley's Charlie Chan.

好的。下一個問題將由摩根士丹利的 Charlie Chan 提出。

Thanks for taking my question again. I just want to clarify Mark's comments on smartphone market share. So you mentioned that you believe you can continue to gain market share in smartphone semiconductors. But now you essentially have very high market share now, except for those in-house production from Samsung. So where is the upside for this market share in smartphone?

感謝您再次回答我的問題。我只是想澄清馬克對智慧型手機市場份額的評論。所以您提到您相信自己能夠繼續在智慧型手機半導體領域獲得市場份額。但現在你們的市佔率基本上已經很高了，除了三星的內部生產。那麼，智慧型手機市場佔有率的優勢在哪裡呢？

Where? Well, we and our customers work together to increase their shares. Yes, currently our smartphone with our customer market share is already very high. But we will gradually increase. We think we will gradually increase further. Many of our customers today in mid end were also attempting to get into the high end, particularly the silicon content of high end and mid end also increasing, which favors leading-edge technology that we provide. So those are the reasons -- those are the advantages that we have with our customer to be able together increase the market share we have.

在哪裡？嗯，我們和我們的客戶一起努力增加他們的份額。是的，目前我們的智慧型手機在我們的客戶市場佔有率已經很高了。但我們會逐漸增加。我們認為我們將會進一步逐步增加。我們今天許多中端客戶也在嘗試進入高端，特別是高端和中端的矽含量也在增加，這有利於我們提供的尖端技術。這就是原因—這些是我們與客戶共同擁有的優勢，可以共同增加我們的市場佔有率。

Okay. That's very clear. So gain market share along with your customers. Okay. So I just want to follow Donald's question on this short-term volatility because you risk CapEx for next year 10-nanometer demand. But I think the fact is that you disclosed in your 20-F, Apple and Qualcomm each accounts for 15% of your 2015 revenue. And we all know that Qualcomm may walk away to Samsung temporarily. And for Apple you also mentioned that you cannot predict that sales of, let's say, iPhone 7. So how can you be that confident to spend that CapEx for 2017 10-nanometer demand? Thanks.

好的。這非常清楚。因此，與您的客戶一起獲得市場份額。好的。因此，我只想回答唐納德關於這種短期波動的問題，因為你將面臨明年 10 奈米需求的資本支出風險。但我認為事實是，您在 20-F 中披露，蘋果和高通各佔您 2015 年收入的 15%。我們都知道高通可能會暫時轉向三星。對於蘋果，您也提到無法預測 iPhone 7 的銷售量。那麼您如何有信心將資本支出用於 2017 年的 10 奈米需求呢？謝謝。

We cannot give you a specific number. It doesn't mean we are not confident. I think, of course, we want to support our customer for any growth opportunities they can possibly achieve. At the same time, we manage carefully about our capacity buildup. So this is a very complicated discussion with our customers. So at this point I think we will -- those capacities we built will be needed by our customers.

我們無法給您一個具體的數字。這並不意味著我們沒有信心。我認為，當然，我們希望支持我們的客戶獲得任何可能的成長機會。同時，我們也謹慎管理產能建設。因此，這是我們與客戶進行的非常複雜的討論。所以現在我認為我們會——我們所建立的那些能力將會被我們的客戶所需要的。

Is there any early indicator you will win -- keep very high market share as a 10-nanometer project for big customer?

是否有任何早期跡象表明您會獲勝——作為大客戶的 10 奈米專案保持非常高的市場份額？

Yes. We have been working with customer for a long time for 10-nanometer and we believe our market share will be more than 70% next year.

是的。我們在10奈米領域已經與客戶進行了長期合作，我們相信明年我們的市佔率將超過70％。

Okay. Thanks.

好的。謝謝。

Okay. Follow-up questions from Citigroup's Roland Shu.

好的。花旗集團的 Roland Shu 提出了後續問題。

Thanks. I just want to take your assumption for 16-nanometer gross margin to be about 1 percentage point dilution of the corporate average in second quarter and 3Q. So I just did the calculation. It seems like in 3Q actually we don't have any benefit for the higher utilization on the gross margin point of view. So does that mean that in 3Q the average of 16% revenue growth in mainly from the product mix change?

謝謝。我只是想將您對 16 奈米毛利率的假設視為第二季和第三季公司平均水平的約 1 個百分點的稀釋。所以我只是做了計算。從毛利率的角度來看，第三季我們似乎實際上並沒有從更高的利用率中獲得任何好處。那麼這是否意味著第三季平均16%的營收成長主要來自於產品結構的變化？

I think my question, just to repeat my question. I just take your assumption, 16-nanometer gross margin to be 1 percentage point dilution of the corporate average in second quarter and 3Q. My calculation showed in 3Q, even though we have about 16% revenue growth, however we don't -- it seems that we don't have any gross margin benefit on the higher utilization. Does that mean this 16% revenue increase is mainly from the product mix change, or in 3Q we have a higher depreciation to have a drag of the gross margin? Thank you.

我想我的問題只是重複我的問題。我只是接受你的假設，16奈米毛利率將比第二季和第三季的公司平均降低1個百分點。我的計算表明，在第三季度，儘管我們的收入增長了約 16%，但我們並沒有——似乎我們在更高的利用率上並沒有獲得任何毛利率收益。這是否意味著16%的營收成長主要來自於產品結構的變化，還是第三季更高的折舊費用拖累了毛利率？謝謝。

So basically, Roland, your question is whether or not we will have a higher utilization rate or a lower utilization rate in the third quarter compared to the second quarter, and that's the reason for not giving you a 55% gross margin, right?

所以基本上，羅蘭，你的問題是，與第二季相比，我們第三季的利用率是更高還是更低，這就是我沒有給你 55% 毛利率的原因，對嗎？

Yes. And if the depreciation is much higher than second quarter.

是的。如果貶值幅度遠高於第二季。

Higher depreciation, yes.

是的，折舊率更高。

It's a combination of many factors. We do have higher depreciation. Just imagine, we have back-end-loaded CapEx, so it's natural depreciation would go up from second half, that's one thing. And also we are ramping 16-nanometer, which we still have some dilutions. And we have a better utilization in third quarter as well. So if you took all those three factors together, that's the guidance that was provided, broadly based on those.

這是多種因素共同作用的結果。我們的折舊確實較高。試想一下，我們有後端加載的資本支出，因此從下半年開始它的自然折舊將會上升，這是一回事。而且我們正在推進 16 奈米技術，但仍存在一些稀釋。而且我們在第三季的利用率也更高。因此，如果將這三個因素綜合起來，這就是所提供的指導，大致上是基於這些因素。

Yes. So can we have a rough number for how high the depreciation in 3Q it will be?

是的。那我們能否粗略估計一下第三季的貶值幅度是多少？

I think it's TWD2.5b more.

我認為還要多25億新台幣。

Yes. It's about TWD2.5b quarterly depreciation.

是的。每季貶值約25億新台幣。

So it's about 1 percentage point lower in gross margin.

因此毛利率下降了約 1 個百分點。

Roughly.

大致。

Yes. Okay. And the whole year depreciation is still increased about mid to high single digit, is that the same?

是的。好的。而且全年折舊額還是在中高個位數左右成長，是一樣的嗎？

It's in the range of mid teens year over year. Mid teens.

與去年同期相比，這一數字一直處於十幾歲的水平。十幾歲。

Mid teens?

十幾歲？

Mid teens, yes.

是的，十幾歲。

That is very different from the number you talked.

這和您所說的數字有很大不同。

No, I was talking about the same thing. Depreciation year over year will increase by mid teens. I didn't change that.

不，我說的是同一件事。折舊率將逐年增加十五六個百分點。我沒有改變這一點。

Okay. No? I think it's not. Mid to high single digit.

好的。不？我認為不是。中高個位數。

I'm sorry. I was looking at the wrong line. Yes, mid single digit. You're right.

對不起。我看錯那一行了。是的，中個位數。你說得對。

Okay. Yes. Thank you for the clarification. And last question, for the DoI inventory, you said in 3Q we are still -- customers are still restocking in 3Q and in 4Q will be destocking and inventory days will be back to seasonal level. So does that mean that from first quarter next year, are we going to see a normal seasonality, normal quarter in first quarter or customers are going to restocking again from first quarter next year? Thank you.

好的。是的。感謝您的澄清。最後一個問題，關於 DoI 庫存，您說在第三季度我們仍然 - 客戶仍在補充庫存，而在第四季度將會去庫存，庫存天數將恢復到季節性水平。那麼，這是否意味著從明年第一季開始，我們將看到正常的季節性，第一季的正常季度，還是客戶將從明年第一季開始再次補​​貨？謝謝。

I think there are still uncertainties depending on how the inventory situation in the fourth quarter and over-sentiment in the fourth quarter, so it's a little bit too early to say that.

我認為第四季度的庫存情況以及第四季度的過度情緒仍然存在不確定性，所以現在說這個還為時過早。

A follow-up question from Credit Suisse, Randy Abrams.

瑞士信貸的蘭迪·艾布拉姆斯 (Randy Abrams) 提出了後續問題。

Thank you. Just to follow up on Roland's question, to pull it back to fourth quarter, where you talked about the inventory and the high base, is there a way to think about it relative to seasonal? What's the seasonal fourth quarter and then if you're thinking it's normal or below seasonal?

謝謝。只是為了跟進羅蘭的問題，將其拉回到第四季度，您談到了庫存和高基數，有沒有辦法將其與季節性聯繫起來考慮？第四季的季節性如何？您是否認為這是正常的或低於季節性的？

The question is fourth quarter, what you would expect normal seasonal, because you mentioned it's normally a correction quarter. So what's the normal magnitude and then how you see, at this stage, it could change, but at this stage how you see it relative to seasonal?

問題是第四季度，您預期會出現正常的季節性變化，因為您提到這通常是一個調整季度。那麼正常的幅度是多少呢？您如何看待，在現階段，它可能會發生變化，但在此階段，您如何看待它相對於季節性的變化？

Fourth quarter is seasonally will correct. It will correct. What we say from third quarter, a little bit higher than seasonal going to fourth quarter seasonal, including both factors, correcting the deviation of seasonal. And also between third quarter and fourth quarter, seasonal will be corrected. The days will decrease.

第四季將出現季節性調整。它會糾正的。我們說從第三季開始，到第四季度，季節性因素會稍微高一些，包括這兩個因素，以糾正季節性的偏差。並且在第三季和第四季之間，季節性將得到修正。日子會越來越少。

Okay. But do you think the decline -- because it was above seasonal in third quarter and inventory above, we could see below seasonal fourth quarter? Do you expect you could see a below-seasonal fourth quarter?

好的。但是您是否認為，由於第三季的銷售額高於季節性水平，且庫存量也高於季節性水平，我們可能會看到第四季度的銷售額低於季節性水平？您是否預期第四季的業績將低於季節性？

No, no. We see it's close to seasonal.

不，不。我們發現它接近季節性。

Okay. My follow-up question, IoT is one of your growth drivers. Your competitors, like Samsung and GlobalFoundries, have been pitching FD-SOI. Do you see any merits to that track or how do you see customer interest in that relative to the strategy that you're adopting, and any need to consider that in the future?

好的。我的後續問題是，物聯網是您的成長動力之一。您的競爭對手，如三星和 GlobalFoundries，一直在推廣 FD-SOI。您是否認為該軌道有任何優點，或者您如何看待客戶對此的興趣，以及未來是否需要考慮這一點？

Well let me answer that question. For the FD-SOI, the main merit is low power consumption, which I think TSMC has offered a complete set of technology roadmap for the low-power applications. We started from 40-nanometer low power and enter into 28-nanometer, now even 16 FinFET, we offer down to 0.5-volt operation voltage. Our experience, we're talking and working with our customers, the roadmap has been very satisfactory to their product needs. So we expect we are very well positioned to capture all the opportunities.

好吧，讓我來回答這個問題。對於FD-SOI來說，主要的優點是低功耗，我認為台積電已經為低功耗應用提供了一套完整的技術路線圖。我們從40奈米低功耗開始，進入28奈米，現在甚至是16 FinFET，我們提供低至0.5伏特的工作電壓。我們的經驗是，我們正在與客戶交談和合作，路線圖非常滿足他們的產品需求。因此，我們期望我們能夠抓住所有機會。

Let me add to that. I think FD-SOI may be useful for specific products, but our bulk CMOS ultra low power has a much bigger design ecosystem. And IoT is a very fragmented design. And many, many customers are trying to enter that. So we think the ecosystem of bulk CMOS is much, much useful for our customers than niche FD-SOI application.

讓我補充一下。我認為 FD-SOI 可能對特定產品有用，但我們的體矽 CMOS 超低功耗擁有更大的設計生態系統。物聯網是一個非常分散的設計。很多客戶都試圖進入這個領域。因此，我們認為體矽 CMOS 生態系統對我們的客戶來說比小眾 FD-SOI 應用更有用。

Thank you.

謝謝。

Okay. There's a question in the back. I think you are Merrill Lynch sales, right? No, you are not. UBS, sorry. The lady in the back is sales from UBS.

好的。後面有一個問題。我想你是美林證券的銷售吧？不，你不是。瑞銀，抱歉。後面的女士是瑞銀的銷售人員。

Thank you, Dr. Sun. This is

謝謝您，孫醫師。這是

Julie from UBS. My question will be actually more simple than the analysts'. I'm actually quite interested regarding to the market share comment that Mark has made. I'm just wondering, regarding to the market share gain, would that be coming in from, let's say, your existing clients making into higher end of smartphone, tapping into areas they never have been before? That's one thing that's called market share gain, right?

瑞銀的朱莉。我的問題實際上比分析師的問題更簡單。我實際上對馬克所發表的市場份額評論非常感興趣。我只是想知道，關於市場佔有率的成長，這是否來自於，比如說，您現有的客戶進入高階智慧型手機，進入他們從未涉足的領域？這就是所謂的市佔率增加，對吧？

Secondly, is it existing clients coming back to you that's also a market share gain? So which one would that be?

其次，現有客戶回頭是否也意味著市場佔有率的成長？那麼會是哪一個呢？

Both.

兩個都。

Okay.

好的。

Yes.

是的。

So which one is happening faster?

那麼哪一個發生得比較快？

They happen at the same time.

它們同時發生。

Okay. And would you be able to quantify the market share of TSMC in smartphone?

好的。您能量化一下台積電在智慧型手機市場的佔有率嗎？

Currently we're about 55% and we expect to increase from that number further up gradually.

目前我們的比例約為 55%，我們預期這一比例將逐步上升。

Okay. My second question is actually what's TSMC's view on ASML buying Hermes? Does that help you going forward in terms of tools for procurement, or could you comment on that?

好的。我的第二個問題其實是台積電對 ASML 收購 Hermes 有何看法？這對您在採購工具方面取得進展有幫助嗎？或者您能對此發表評論嗎？

HMI Hermes has this defect inspection tool. It can detect very fine feature on wafers. And ASML and HMI merger intends to be able to develop the lithography more precisely controlled according to the wafer images. So I can only speak from industry or technical perspective. That definitely will help the capability of lithography tools and therefore help the technology capability and help the technology development for their customers. That's my comment.

HMI Hermes 有這個缺陷檢查工具。它可以檢測晶圓上非常精細的特徵。而ASML與HMI的合併意在能夠開發出更精確地根據晶圓影像進行控制的微影技術。所以我只能從產業或技術角度來談。這肯定有助於提高光刻工具的能力，從而有助於提高技術能力並幫助客戶的技術開發。這是我的評論。

All right. Last question, coming from Credit Lyonnais, Sebastian Hou.

好的。最後一個問題，來自里昂信貸公司的 Sebastian Hou。

Thank you, Dr. Sun. Just two quick follow-ups. The first one is that we noticed the consumer application in second quarter increased significantly, both from quarter-and-quarter and year-on-year perspective. Can you, C.C. or Mark, comment on that?

謝謝您，孫醫師。只需快速跟進兩個問題。第一個是我們注意到第二季的消費者應用無論是從環比還是同比來看都有顯著的成長。你能嗎，C.C.或馬克對此有何評論？

Video games.

電子遊戲。

Okay. Thank you. And a very quick one. The last one is on the CapEx increase, about $500m, so I wonder whether that suggests some pull-in of the 10-nanometer expansion.

好的。謝謝。而且非常快。最後一個是關於資本支出的增加，大約 5 億美元，所以我想知道這是否意味著 10 奈米擴張的某種拉動。

Yes, it is. It's for 10-nanometer because we need a bigger capacity next year.

是的。這是針對 10 奈米的，因為我們明年需要更大的產能。

But he's asking whether it's a pull-in, which is a schedule issue.

但他詢問這是否是一次拉入，這是時間安排問題。

For next year it's not; it's just higher demand so we need more capacity.

明年則不然；需求越來越大，所以我們需要更多的容量。

So that doesn't have any correlation with the mass production schedule?

那麼這與量產計劃沒有任何關聯嗎？

The schedule stays the same.

時間表不變。

Okay. So a follow-up on that one is that the -- does the CapEx mix still about 10% go to back end within the -- in terms of the new CapEx? Or they were skewed more towards the advanced packaging -- sorry, advanced technology, mostly on 10 nanometers and 7 nanometers for this year?

好的。那麼，這個問題的後續問題是──就新的資本支出而言，資本支出組合中是否仍有約 10% 用於後端？或者他們更傾向於先進的封裝——抱歉，是先進的技術，今年主要是 10 奈米和 7 奈米？

The back-end CapEx for next year probably will be much smaller than this year, because we build up InFO capacity already. Next year we are going to be the second generation, probably just improve some features, that's all.

明年的後端資本支出可能比今年小得多，因為我們已經建立了 InFO 容量。明年我們會出第二代，可能只是改進一些功能，僅此而已。

Thank you.

謝謝。

Okay. I think it's about time. And thank you very much for coming to our quarterly conference. I hope you will join us next quarter. Our transcript will be available very shortly, as well as the video replay. Thank you.

好的。我認為是時候了。非常感謝您參加我們的季度會議。我希望您下個季度能加入我們。我們的文字記錄和視頻回放將很快發布。謝謝。