台積電 ADR (TSM) 2016 Q4 法說會逐字稿

Happy New Year, everyone.

祝大家新年快樂。

Welcome to TSMC's fourth quarter 2016 earnings conference and conference call.

歡迎來到台積電 2016 年第四季度財報電話會議。

This is Elizabeth Sun, TSMC's Senior Director of Corporate Communications and your host for today.

我是台積電企業傳播高級總監 Elizabeth Sun，也是今天的主持人。

Today's event is webcast live through TSMC's website at www.tsmc.com.

今天的活動通過台積電網站 www.tsmc.com 進行網絡直播。

If you are joining us via the conference call, your dial-in lines are in listen-only mode.

如果您通過電話會議加入我們，您的撥入線路將處於只聽模式。

As this conference is being viewed by investors around the world, we will conduct this event in English only.

由於世界各地的投資者都在觀看這次會議，我們將僅以英語進行此次活動。

The format for today's event will be as follows.

今天活動的形式如下。

First, TSMC's senior vice president and CFO, Ms. Lora Ho, will summarize our operations in the fourth quarter of 2016 followed by our guidance for the first quarter of 2017.

首先，台積電高級副總裁兼首席財務官 Lora Ho 女士將總結我們 2016 年第四季度的運營，然後是我們對 2017 年第一季度的指導。

Afterwards, TSMC's chairman, Dr. Morris Chang, will provide our key messages and conduct the Q&A session where TSMC's two presidents and co-CEOs, Dr. Mark Liu, and Dr. CC Wei, will be joining Chairman Chang and Ms. Ho in answering your questions.

之後，台積電董事長張忠謀博士將提供我們的關鍵信息並進行問答環節，台積電的兩位總裁兼聯席首席執行官劉馬克博士和魏建軍博士將與張董事長和何女士一起回答你的問題。

For those participants on the call, if you do not yet have a copy of the press release, please, you may download it from TSMC's website at www.tsmc.com.

對於電話會議的參與者，如果您還沒有新聞稿的副本，請從台積電的網站 www.tsmc.com 下載。

Please also download the summary slides in relation to today's earnings conference presentation.

另請下載與今天的收益會議演示相關的摘要幻燈片。

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.

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，這些陳述存在重大風險和不確定性，可能導致實際結果與前瞻性陳述中包含的結果存在重大差異。

Please refer to the Safe Harbor notice that appears on our press release.

請參閱我們新聞稿中出現的安全港通知。

Now, I would like to turn the podium to TSMC's CFO, Ms. Lora Ho, with the summary of operations and current quarter guidance.

現在，我想請台積電的首席財務官 Lora Ho 女士講講台積電的運營總結和當前季度的指導意見。

Good afternoon, you hear me okay?

下午好，你聽到我說的好嗎？

Okay.

好的。

Thank you for joining us today.

感謝您今天加入我們。

My presentation will start with financial highlights for the fourth quarter, the recap of our 2016 performance, followed by the guidance of the current quarter.

我的演講將從第四季度的財務亮點開始，回顧我們 2016 年的業績，然後是本季度的指導。

Fourth quarter revenue rose 0.7% sequentially to TWD262 billon, exceeding the high end of our guidance given in October due to a stronger demand for TSMC's 16 nanometer technology and the more favorable foreign exchange rate than our original forecast.

第四季度收入環比增長 0.7% 至 262 億新台幣，超過了我們 10 月份給出的指引的上限，這是由於對台積電 16 納米技術的需求強勁以及比我們最初預測更有利的匯率。

Gross margin increased by 1.6 percentage point quarter-over-quarter to 52.3%, mainly driven by continued cost improvement efforts.

毛利率環比增長 1.6 個百分點至 52.3%，主要受成本改善措施持續推動。

Operating margin also increased at 1.1 percentage point sequentially to 41.9%, while R&D expense continued to grow, reflecting a higher level of 7 nanometer and 10 nanometer development activities.

營業利潤率也環比增長 1.1 個百分點至 41.9%，而研發費用繼續增長，反映出更高水平的 7 納米和 10 納米開發活動。

Overall, our fourth quarter EPS reached TWD3.86, and ROE was 30% for the quarter.

總的來說，我們第四季度的每股收益達到了 TWD3.86，本季度的淨資產收益率為 30%。

Now, let's take a look at wafer revenue contribution by application.

現在，讓我們來看看按應用劃分的晶圓收入貢獻。

During the fourth quarter, communication and computer increased 11% and 7% on the prior quarter respectively while consumer and industrial standard decreased by 43% and 6% respectively.

第四季度，通信和計算機分別比上一季度增長 11% 和 7%，而消費和工業標準分別下降 43% 和 6%。

On full year basis, all four segments experienced year-on-year growth.

從全年來看，所有四個部門都實現了同比增長。

Communication increased 16% YoY and represented 62% of our total wafer revenue, the computer increased 15%, consumer grew 32%, industrial/standard rose 1%.

通信同比增長 16%，占我們晶圓總收入的 62%，計算機增長 15%，消費增長 32%，工業/標準增長 1%。

Now, let us take a look at the revenue by technology.

現在，讓我們來看看技術收入。

Combined revenue from 16 nanometer and 20 nanometer reached 33% of wafer revenues in the fourth quarter, up from 31% in the third quarter.

第四季度 16 納米和 20 納米的合併收入佔晶圓收入的 33%，高於第三季度的 31%。

Our 28 nanometer contribution remains strong at 24% of revenue.

我們的 28 納米貢獻仍然強勁，佔收入的 24%。

Advanced technology, meaning 28 nanometer and below, accounted for 57% of total wafer revenue in the fourth quarter.

先進技術，即 28 納米及以下，佔第四季度晶圓總收入的 57%。

On a full year basis, the combined 16/20 nanometer contribution increased by 8 percentage points, and reached 28% of total wafer revenue in 2016.

從全年來看，16/20 納米的綜合貢獻增加了 8 個百分點，在 2016 年達到晶圓總收入的 28%。

Advanced technologies, 28 nanometer and below, accounted for 54% of total wafer revenue, up from 48% in 2015.

28 納米及以下的先進技術佔晶圓總收入的 54%，高於 2015 年的 48%。

Moving on to the balance sheet, we ended the fourth quarter with cash and marketable securities of TWD632 billion, an increase of TWD115 billion.

轉到資產負債表，我們在第四季度結束時現金和有價證券為 6320 億新台幣，增加了 1150 億新台幣。

On the liability side, current liabilities increased by TWD61 billion.

負債方面，流動負債增加新台幣610億元。

On the financial ratios, accounts receivable turnover days increased three days to 45 days.

財務比率方面，應收賬款周轉天數增加3天至45天。

For inventory, our days of inventory decreased three days to 41 days, mainly driven by the reduction of work-in-process.

對於存貨，我們的存貨天數減少了三天至 41 天，主要是由於在製品減少所致。

Now let me make a few comments on cash flow and CapEx.

現在讓我對現金流和資本支出發表一些評論。

During the fourth quarter, we generated about TWD185 billion cash from operations, and spent TWD113 billion in capital expenditure.

第四季度，我們從運營中產生了約 1850 億新台幣的現金，並花費了 1130 億新台幣的資本支出。

As a result, we generated free cash flow of TWD73 billion and our overall cash balance increased TWD77 billion, to reach TWD541 billion at the end of the quarter.

因此，我們產生了 730 億新台幣的自由現金流，我們的整體現金餘額增加了 770 億新台幣，在本季度末達到 5410 億新台幣。

In US dollar terms, our fourth quarter capital expenditure reached $3.5 billion and the total year CapEx was $10.2 billion.

以美元計算，我們第四季度的資本支出達到 35 億美元，全年資本支出為 102 億美元。

This is a bit higher than our prior guidance of slightly above $9.5 billion, mainly due to accelerated delivery of advanced technology tools.

這比我們之前略高於 95 億美元的指導略高，這主要是由於先進技術工具的加速交付。

Now, I would like to give you a recap of our performance in 2016.

現在，我想給大家回顧一下我們在2016年的表現。

2016 was a good year for TSMC as once again, we set new records in terms of revenue and earnings.

2016 年對台積電來說是個好年頭，我們在收入和盈利方面再次創下新紀錄。

Our revenue grew 12.4% year-over-year, and reached TWD948 billion, or up 10.6% to $29.4 billion in US dollar term.

我們的收入同比增長 12.4%，達到新台幣 9,480 億元，按美元計算增長 10.6% 至 294 億元。

As a result, wafer shipment increased across nearly all technology nodes.

結果，幾乎所有技術節點的晶圓出貨量都增加了。

Gross margin increased 1.4 percentage points to 50.1% in 2016, mainly due to continued cost reduction efforts and to a lesser extent, the more favorable foreign exchange rate.

2016 年毛利率上升 1.4 個百分點至 50.1%，主要是由於持續的成本削減工作，其次是更有利的匯率。

Our operating margin also increased 2 percentage points to reach 39.9%.

我們的營業利潤率也增長了 2 個百分點，達到 39.9%。

Our effective tax rate was 13.5% in 2016, same as in 2015 and full year earnings per share was TWD12.89, an increase of 9% year-over-year.

2016 年有效稅率為 13.5%，與 2015 年相同，全年每股收益為新台幣 12.89 元，同比增長 9%。

Excluding major one off items, namely share disposal gains and a closure of our Solar operations in 2015, and the negative impact from the earthquake in 2016, our EPS would have grown 17.4% year-over-year in 2016.

剔除主要的一次性項目，即 2015 年股權處置收益和關閉我們的太陽能業務，以及 2016 年地震的負面影響，我們 2016 年的每股收益將同比增長 17.4%。

On cash flow, we spent TWD328 billion in capital expenditure.

在現金流方面，我們的資本支出為新台幣 3,280 億元。

While we generated TWD540 billion in operating cash flow, and TWD212 billion in free cash flow.

同時我們產生了 5400 億新台幣的運營現金流和 2120 億新台幣的自由現金流。

We also paid TWD156 billion in cash dividend, an increase of 33% from the 2015.

我們還支付了新台幣 1,560 億元的現金股息，比 2015 年增加了 33%。

From a semiconductor industry standpoint, we estimate that the semiconductor market is likely to have remained flat year-on-year.

從半導體行業的角度來看，我們估計半導體市場可能同比持平。

While fabless grew 5% and foundry rose 8%, the outperformance of foundry over the overall semiconductor industry was mainly driven by the strong demand from 4G powered smartphones in the China market, the replacement upgrade of gaming and emergence of artificial intelligence.

Fabless 增長 5%，Foundry 增長 8%，而 Foundry 的表現優於整體半導體行業，主要是受中國市場 4G 智能手機的強勁需求、遊戲換代升級和人工智能的出現所推動。

Compared to foundry's 8% growth, TSMC's 11% growth in US dollar underscore our further market segment share gain of 55% in 2015 to 56% in 2016, which is mainly propelled by our leadership in 16 nanometer and 20 nanometer.

與晶圓代工業務的 8% 增長相比，台積電以美元計算的 11% 增長突顯了我們的細分市場份額從 2015 年的 55% 進一步增長到 2016 年的 56%，這主要得益於我們在 16 納米和 20 納米領域的領先地位。

We estimated fabless days of inventory ended 2016 at slightly above seasonal level by about two days.

我們估計 2016 年底的無晶圓廠庫存天數略高於季節性水平約兩天。

I have finished my remark on the financial summary, now let me turn on to the first quarter outlook.

我對財務摘要的評論已經結束，現在讓我談談第一季度的展望。

Moving on to the first quarter 2017, we forecast the demand is weaker than the prior quarter due to mobile product seasonality and slightly above seasonal supply chain inventory at the end of 2016.

轉到 2017 年第一季度，我們預測由於移動產品季節性和略高於 2016 年底的季節性供應鏈庫存，需求將弱於上一季度。

Based on our current forecast an exchange rate assumption of $1 to TWD32, we expect the first quarter revenue to be between TWD236 billion and TWD239 billion, which represents 8.9% to 10% sequential decline.

根據我們目前的預測，假設匯率為 1 美元兌 32 新台幣，我們預計第一季度收入將在 2360 億新台幣和 2390 億新台幣之間，環比下降 8.9% 到 10%。

Gross profit margins will be between 51.5% and 53.5%, and operating margin will be between 40.5% and 42.5%.

毛利率將在 51.5% 至 53.5% 之間，營業利潤率將在 40.5% 至 42.5% 之間。

This concludes my remarks.

我的發言到此結束。

Now, I would like to turn the podium to the chairman for his comments.

現在，我想把主席台轉給主席發表意見。

Ladies and gentlemen, I first want to wish you a very happy, care free, healthy, and profitable, and hopeful new year.

女士們先生們，首先我要祝你們新年快樂、無憂無慮、身體健康、盈利豐厚、充滿希望。

And Lora has just given her report on the last quarter and also she gave her outlook for the first quarter.

Lora 剛剛給出了上一季度的報告，還給出了第一季度的展望。

I will just spend a few minutes to talk about 2017, the whole year.

我會花幾分鐘來談談 2017 年，全年。

For 2017, we expect smartphone unit growth of 6%, from 1.47 billion units to 1.55 billion units.

2017 年，我們預計智能手機出貨量增長 6%，從 14.7 億部增至 15.5 億部。

Of this smartphone growth, we expect the high end of smartphone will grow 3%, the mid end will grow 5% and the low end will grow 8%.

在智能手機增長中，我們預計智能手機高端將增長 3%，中端將增長 5%，低端將增長 8%。

For 2017, we also expect that PC units will decline 5%, tablets will decline 7%, DCE units will decline 5%, and IOT units will grow 34%.

對於 2017 年，我們還預計 PC 出貨量將下降 5%，平板電腦出貨量將下降 7%，DCE 出貨量將下降 5%，IOT 出貨量將增長 34%。

Again, for 2017, we expect semiconductor market will grow 4%, foundry revenue will grow 7%.

同樣，對於 2017 年，我們預計半導體市場將增長 4%，晶圓代工收入將增長 7%。

We expect TSMC revenue will grow 5% to 10% in US dollars.

我們預計台積電的收入將以美元計算增長 5% 至 10%。

TSMC revenue, we expect to grow 5% to 10% in US dollars.

台積電的收入，我們預計以美元計算將增長 5% 至 10%。

We believe that in the first half of 2017, our growth over the same period last year will be close to 10% [based on NT dollar](corrected by company after the call).

我們相信在2017年上半年，我們比去年同期的增長將接近10%[以新台幣計算]（電話會議後公司修正）。

And in the second half of 2017, our growth over the same period last year will be close to 5%[based on NT dollar] (corrected by company after the call).

而在2017年下半年，我們的同比增長將接近5%[以新台幣計算]（電話會議後公司修正）。

We expect to continue to increase our R&D investments both in dollars and moderately in its percent of revenue.

我們希望繼續增加我們的研發投資，無論是美元還是適度的收入百分比。

We also reaffirm our long-term growth projection which was made a couple of years ago.

我們還重申了幾年前做出的長期增長預測。

We think that in the 2015 to 2020 time period, TSMC revenue and operating profit will grow at a compound annual average rate of 5% to 10%, I'm sorry, 5% to 10%.

我們認為在2015年到2020年的時間段內，台積電的收入和營業利潤將以5%到10%的年復合增長率增長，對不起，5%到10%。

And TSMC will maintain an ROE of above 20%.

而台積電將維持20%以上的ROE。

That concludes my outlook for 2017 and I believe we are now open for questions.

我對 2017 年的展望到此結束，我相信我們現在可以接受提問了。

So this concludes our prepared statements.

我們準備好的陳述到此結束。

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.

在我們開始問答環節之前，我想提醒大家一次將問題限制在兩個以內，以便所有參與者都有機會提問。

Questions will be taken both from the floor and from the line, and should you wish to raise your question in Chinese, I will translate it to English before our management answers your questions.

會場和線上都會提出問題，如果您想用中文提出問題，我會在我們的管理層回答您的問題之前將其翻譯成英文。

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.

對於通話中的那些人，如果您想提問，請按電話鍵盤上的星號，然後按一個。

Now, star and one.

現在，明星和一個。

Questions will be taken in the order in which they were received.

問題將按照收到問題的順序進行處理。

If at any time you would like to remove yourself from the questioning queue, please press the pound or the hash key.

如果您想在任何時候將自己從提問隊列中移除，請按井號或井號鍵。

Now, we will start the Q&A session.

現在，我們將開始問答環節。

First, we will have Deutsche Bank, Michael Chou.

首先，我們將請德意志銀行 Michael Chou 發言。

Hi, Chairman, Co-CEOs, CFO, and Dr. Chang.

嗨，董事長、聯席首席執行官、首席財務官和張博士。

My first question is regarding the outlook in the first half, given Q1 could be down 8% to 10% so in your guidance for the first half to be up 10% year-on-year.

我的第一個問題是關於上半年的前景，鑑於第一季度可能下降 8% 至 10%，因此在您對上半年的指導中同比增長 10%。

So does that imply you still expect your (inaudible) or we can say sequential growth for Q2 or Q3 going forward.

那麼這是否意味著您仍然期望您的（聽不清）或者我們可以說第二季度或第三季度的連續增長。

Maybe I will take the question.

也許我會回答這個問題。

Right.

正確的。

Michael, you are asking what is going to be our Q2 and Q3 sequential growth QoQ.

邁克爾，你問的是我們第二季度和第三季度的環比增長。

Assuming not the --

假設不是——

What is the question, repeat the question?

問題是什麼，重複問題？

You are asking us about the second quarter and third quarter quarter-over-quarter revenue growth outlook?

您是在問我們第二季度和第三季度的環比收入增長前景嗎？

We expect it to be a very significant positive number.

我們預計這是一個非常重要的正數。

[referring to 3Q over 2Q only](corrected by company after the call).

[僅指 3Q over 2Q]（電話後由公司更正）。

So maybe a follow up question for inventory.

所以也許是庫存的後續問題。

Given the Q1 outlook seems to be slightly below our estimate, so do you see the demand outlook for Q1 is weaker than you expected three months ago?

鑑於第一季度的前景似乎略低於我們的預期，那麼您是否認為第一季度的需求前景比您三個月前的預期要弱？

Did you hear the question, Lora?

你聽到這個問題了嗎，勞拉？

Michael was asking, do we see the Q1 as weaker than we anticipated three months ago.

邁克爾問，我們是否認為第一季度比我們三個月前預期的要弱。

Lora, will you -- could you answer?

Lora，你能——你能回答嗎？

Yes, it was weaker than we have anticipated a couple of months ago.

是的，它比我們幾個月前預期的要弱。

But could you specify which segment or what kind of applications?

但是您能否指定哪個細分市場或哪種應用程序？

Basically, it's mobile products as we have stated in the press release.

基本上，正如我們在新聞稿中所述，它是移動產品。

Okay.

好的。

All right.

好的。

Now the question will go to Credit Suisse, Randy Abrams.

現在問題將交給瑞士信貸，Randy Abrams。

Yes, thank you.

是的，謝謝。

The first question, I wanted to ask your outlook is more in line with the industry where you are guiding 5% to 10% for foundry near similar levels.

第一個問題，我想問你的前景更符合你指導類似水平附近代工 5% 到 10% 的行業。

Could you talk about the factors to be more inline after gaining the last few years.

你能談談在過去幾年獲得成功後更加內聯的因素嗎？

And can you also address the China business, we are seeing the China foundries grow faster.

您能否也談談中國業務，我們看到中國鑄造廠增長更快。

SMIC is growing 20% to 30%, how does TSMC combat or defend share more on the mature nodes, where they're starting to grow faster?

中芯國際增長20%到30%，台積電如何在成熟節點上爭取或捍衛更多份額，他們開始增長更快？

Can you repeat the question?

你能重複這個問題嗎？

All right, Randy, your first question is made with respect to TSMC's 2017 growth outlook, where the chairman has just mentioned that 5% to 10%, which is very much in line with the semiconductor industry.

好吧，Randy，你的第一個問題是關於台積電2017年的增長前景，主席剛才提到5％到10％，這非常符合半導體行業。

With the fab -- I'm sorry, with the foundry industry, yes.

對於晶圓廠——對不起，對於鑄造行業，是的。

So he would like to know the underlying reasons why we are only growing sort of in line with the foundry.

所以他想知道為什麼我們只在某種程度上與鑄造廠保持一致的根本原因。

Why we are only in line with the foundry?

為什麼我們只與代工廠接軌？

And then China, where the Chinese foundry appear to be growing faster than the foundry industry and what is going to be our strategy in defending our market share or growing -- competing against them?

然後是中國，中國鑄造廠的增長速度似乎快於鑄造業，我們將採取什麼戰略來捍衛我們的市場份額或增長 - 與他們競爭？

Well, yes, I think that -- I really don't know how fast the Chinese foundries are going to grow but I do agree that their ambition is certainly to grow faster than the foundry average.

嗯，是的，我認為——我真的不知道中國鑄造廠的增長速度有多快，但我同意他們的雄心壯志肯定是比鑄造廠的平均增長速度更快。

Now, as to why we are only -- why I put -- projected just now that we are only going to grow the same rate as the foundry growth.

現在，至於為什麼我們只是 - 為什麼我說 - 剛剛預測我們只會以與代工增長相同的速度增長。

Well, first of all, we may well be conservative, it's a little too early to say because I said it's now in answer to this gentleman's question that -- actually, I said when I was giving the message, that the second half -- the first half year-over-year will be 10% -- about 10% growth.

好吧，首先，我們可能很保守，現在說還為時過早，因為我說過現在要回答這位先生的問題——實際上，我在發表信息時說過，下半場——上半年同比將增長 10%——大約 10%。

And the second half will be around 5%, and well, you know, the second half is farther away again, but that always makes it more difficult to predict and rather than erring on the high side, we would rather err on the low side.

下半場將在 5% 左右，嗯，你知道，下半場又更遠了，但這總是讓預測變得更加困難，與其在高位犯錯，不如在低位犯錯.

So that is the first reason.

這是第一個原因。

And there is another reason, that is -- this year, I think 2017 will be pretty strong in terms of technology, it will be a pretty strong 16 or 14 FinFET year, and our market share in 16, while it's quite high, is not as high as I would like, it's actually close to 70% or 65% to 70%.

還有另一個原因，那就是 - 今年，我認為 2017 年在技術方面會非常強勁，這將是 16 或 14 FinFET 非常強勁的一年，我們在 16 年的市場份額雖然很高，但沒有我想要的那麼高，它實際上接近 70% 或 65% 到 70%。

Now that is not quite as high as our 28 nanometer, which even now, you know, like almost 80% and now, 2017 is -- I think it's a pretty -- we think will be a pretty strong year.

現在這還不如我們的 28 納米那麼高，即使是現在，你知道，幾乎是 80%，現在，2017 年是——我認為這是一個漂亮的——我們認為將是非常強勁的一年。

And so we are running into a little air pocket here, if you call this staying par with the rest of the foundry air pockets, we call that an air pocket, well, we are running into a little air pocket.

因此，我們在這裡遇到了一個小氣穴，如果您稱其與其他鑄造氣穴保持一致，我們稱之為氣穴，好吧，我們遇到了一個小氣穴。

But then, the next steps, after of course is the 10 and 7 now.

但是，接下來的步驟，當然是現在的 10 和 7。

We see clear sky, we see clear sky anyway there.

我們看到晴朗的天空，無論如何我們在那裡看到晴朗的天空。

So those two reasons.

所以這兩個原因。

First, possible a little conservatism, and second, there's a little concern, that our 16 does not have as high a market share as I like, as I would like, and 2017 happens to be a very strong, we think, a very strong 16 FinFET year.

首先，可能有點保守，其次，有一點擔心，我們的 16 家市場份額沒有我希望的那麼高，而 2017 年恰好是一個非常強勁的市場，我們認為，非常強勁16 FinFET 年。

Now, having said all of that, I will say that we certainly do not think we will lose market share.

現在，說了這麼多，我要說的是，我們當然不認為我們會失去市場份額。

So, why I said that foundry will grow at 7% and we are going to grow at between 5% and 10%, which was further clarified that statement by saying that we're going to grow -- we're not going to grow less than foundry.

所以，為什麼我說代工廠將以 7% 的速度增長，而我們將以 5% 到 10% 的速度增長，這進一步澄清了這一說法，說我們將增長——我們不會增長低於鑄造廠。

Yes.

是的。

A quick follow-up, if you plan introduce a 12-nanometer to enhance your 16, if you have plans for that.

快速跟進，如果你計劃引入 12 納米來增強你的 16，如果你有這樣的計劃。

And then the second question I had was on profitability.

然後我的第二個問題是盈利能力。

Margins are holding up quite well in the first quarter, where normally utilization drops, it should fall a few points.

第一季度的利潤率保持良好，通常利用率會下降，應該會下降幾個百分點。

So if you could talk about the factors holding it up.

所以，如果你能談談阻礙它的因素。

And then as we move through the year, how the expectation from that level, factoring we're ramping 10 nanometer, if you expect margin to improve from that level.

然後，隨著我們度過這一年，如果您預計利潤率會從該水平提高，那麼該水平的預期如何，考慮到我們正在增加 10 納米。

So, Randy, your second question actually has two separate questions, so, yes.

所以，Randy，你的第二個問題實際上有兩個不同的問題，所以，是的。

First part of your second question is with respect to 12 nanometer and second question of the second question is with respect to the margin profile over this year.

你的第二個問題的第一部分是關於 12 納米的，第二個問題的第二個問題是關於今年的利潤率概況。

First question is what?

第一個問題是什麼？

With 12 nanometers.

12納米。

12 nanometers.

12納米。

I think that, C.C., will you answer the first question?

我想，C.C.，你會回答第一個問題嗎？

Let me answer the question.

讓我回答這個問題。

You're asking about the 12 nanometer on what?

你問的是什麼 12 納米？

Yes, if TSMC has a strategy or plan to introduce an in-between 12 nanometer to protect share on the FinFET for customers not going to 10 or 7?

是的，台積電是否有策略或計劃推出介於 12 納米之間的產品，以保護不會使用 10 或 7 的客戶在 FinFET 上的份額？

Okay.

好的。

In fact, we -- our strategy is continuously to improve every node in the performance, such as 28 nanometer.

事實上，我們——我們的戰略是不斷改進每個節點的性能，比如 28 納米。

And we continue to improving the 16 nanometers technology.

我們繼續改進 16 納米技術。

And we have some very good progress, and you might call it the 12 nanometer because we're improving in the density, logic density, performance and power consumption.

我們有一些非常好的進展，你可以稱之為 12 納米，因為我們在密度、邏輯密度、性能和功耗方面都在改進。

Yes, we have that.

是的，我們有。

The second question is the profile of the gross --

第二個問題是總概況——

Gross margin profile.

毛利率概況。

We -- I think it will be fairly constant.

我們 - 我認為它會相當穩定。

I think in the second half 10 nanometer, because the 10 nanometer will be ramping up very strongly in the second half, will start to ramp in the first quarter, but it will ramp very strongly in the second half.

我認為下半年 10 納米，因為 10 納米將在下半年非常強勁地增長，將在第一季度開始增長，但在下半年將非常強勁地增長。

And the big volume, for the year, of 10 nanometer is going to be in the second half.

而今年的大批量 10 納米將在下半年出現。

And the 10 nanometer will drag down the corporate margin in the second half by about 2 points.

而10納米將拖累下半年企業利潤率約2個百分點。

Now if you take that into consideration, then I would say that our structural profitability will be maintained.

現在，如果你考慮到這一點，那麼我會說我們的結構性盈利能力將得到保持。

And by that I mean something in the 50% range.

我的意思是在 50% 範圍內。

But take into consideration that in the second half 10 nanometer will drag down the corporate margin, corporate average, by about 2 points.

但考慮到下半年 10 納米將拖累企業利潤率，即企業平均水平約 2 個百分點。

Yes.

是的。

Okay.

好的。

Next question will be coming from UBS, Bill Lu.

下一個問題將來自瑞銀，Bill Lu。

Bill.

賬單。

Yes.

是的。

Hi, thank you and happy new year.

你好，謝謝你，新年快樂。

Dr. Chang gave us the outlook for the various end-markets in 2017.

Chang 博士為我們展望了 2017 年各個終端市場。

Can you talk about your outlook for the HPC market as well in 2017?

您能否也談談您對 2017 年 HPC 市場的展望？

Maybe units is not the right way, but just in terms of the opportunity for TSMC.

也許單位不是正確的方式，但對台積電來說只是機會。

So our outlook for high-performance computing in 2017, what is going to be the growth outlook for HPC in this year.

所以我們對 2017 年高性能計算的展望，以及今年 HPC 的增長前景。

Okay.

好的。

The HPC, high-performance compute, let me define that first.

HPC，高性能計算，讓我先定義它。

It covers server, infrastructure networking, machine learning, gaming, AR and VR.

它涵蓋服務器、基礎設施網絡、機器學習、遊戲、AR 和 VR。

We see some other AI products who surface but we cannot estimate it.

我們看到一些其他人工智能產品浮出水面，但我們無法估計。

It is just too early to estimate it.

現在估計還為時過早。

Of course, this year you have seen the gaming AR/VR product starting to ramp.

當然，今年你已經看到遊戲 AR/VR 產品開始崛起。

And this is a very new growth area and we see double-digit growth in the beginning.

這是一個非常新的增長領域，我們在一開始就看到了兩位數的增長。

By the way, we -- currently, we have a strong share in the networking infrastructure and gaming already.

順便說一下，我們——目前，我們已經在網絡基礎設施和遊戲領域佔有很大份額。

And it's those other areas is coming to the plate for TSMC.

台積電正在關注其他領域。

So you can see -- this year you see a before-the-threshold kind of growth and there is a double-digit growth only, mostly in the product development phase.

所以你可以看到——今年你看到了閾值前的增長，只有兩位數的增長，主要是在產品開發階段。

If I can sneak in a question, 1-B, if you look at the GPU, how do you categorize it?

如果我可以潛入一個問題，1-B，如果你看 GPU，你如何分類它？

Maybe this is for Lora.

也許這是給勞拉的。

Historically it's really for PCs, but going forward as it is used in autos and AI, are you going to put it in computers, for industrials, or how do you categorize that?

從歷史上看，它確實適用於 PC，但隨著它在汽車和 AI 中的使用而向前發展，你打算將它用於計算機、工業領域，還是你如何對其進行分類？

GPU for graphics, we put it in the PC.

GPU做圖形，我們放在PC裡面。

GPU for the server accelerator, we'll put in the HPC, high-performance computing.

GPU 用於服務器加速器，我們將放入 HPC，高性能計算。

My second question is on capital spending.

我的第二個問題是關於資本支出。

2016 was a little bit higher than expected.

2016 年略高於預期。

What's the outlook for CapEx in 2017?

2017年資本支出前景如何？

2017 CapEx will be about $10 billion.

2017 年資本支出約為 100 億美元。

Next question will be coming from Morgan Stanley's Charlie Chan.

下一個問題將來自摩根士丹利的陳查理。

Thanks for taking my question.

感謝您提出我的問題。

My first question is regarding the advisory report to the US President last Friday, because in a report, the US seems want to ensure their semiconductor leadership, especially in leading-edge, so what will be TSMC's strategy to fit in this policy direction and ensure your own leadership?

我的第一個問題是關於上週五向美國總統提交的諮詢報告，因為在一份報告中，美國似乎希望確保他們在半導體領域的領先地位，尤其是在前沿領域，那麼台積電將採取什麼策略來適應這一政策方向並確保你自己的領導？

Thanks.

謝謝。

You are referring to the advisory, the working -- actually I think it's the working group.

你指的是諮詢、工作——實際上我認為是工作組。

And that report was written to President Obama.

這份報告是寫給奧巴馬總統的。

And there'll be a new President in a few days.

幾天后將有一位新總統。

And whether any of that report will be adopted as policy by the new President is still unknown.

該報告中的任何內容是否會被新總統採納為政策仍不得而知。

But having said all that, I will say that Mr. Trump, President-Elect Trump, has said many times that he wants to create jobs in the United States.

但說了這麼多，我要說的是，當選總統特朗普先生已經多次表示，他想在美國創造就業機會。

And we highly applaud that.

我們對此表示高度讚賞。

TSMC actually has created, we believe, hundreds of thousands of jobs in the United States in the last 20-30 years of our existence.

我們相信，在我們存在的最後 20 到 30 年裡，台積電實際上已經在美國創造了數十萬個就業機會。

We -- for all practical purposes, we have created an industry, the fabless industry, in the United States, and we have grown it, and the fabless industry, I believe, employs hundreds of thousands of people in the United States.

我們 - 出於所有實際目的，我們在美國創造了一個行業，即無晶圓廠行業，並且我們已經發展了它，我相信無晶圓廠行業在美國僱用了數十萬人。

And we have done that by being here ourselves.

我們自己在這裡做到了這一點。

So I think that we'll continue to create more jobs in the United States by helping the fabless industry in the United States.

所以我認為我們將通過幫助美國的無晶圓廠行業繼續在美國創造更多的就業機會。

And the IDMs, they use us, there are many IDMs in the United States that use us.

IDM，他們使用我們，美國有很多 IDM 使用我們。

And by using us, they have grown faster.

通過使用我們，他們成長得更快。

And they create jobs too.

他們也創造就業機會。

So now I -- as to -- I mean that's -- actually, of course, Mr. Trump's main policy to create jobs and of course he has said a lot of things about other things, all right, and I don't want to comment on them right now.

所以現在我——至於——我的意思是——實際上，當然，特朗普先生創造就業的主要政策，當然他已經就其他事情說了很多，好吧，我不想現在就對他們發表評論。

As far as that report is concerned, yes, in fact, I think the report was preceded by the Commerce Secretary in the United States, Penny -- will somebody help me?

就該報告而言，是的，事實上，我認為該報告之前是美國商務部長佩妮——有人可以幫助我嗎？

Penny --?

佩妮——？

Pritzker.

普利茲克。

Yes.

是的。

And I think that I agree with most of the things, but -- I agree with most of the things in the report, in fact, I agree with most of the things that Penny said, but let's keep in mind that that report was written to President Obama.

而且我認為我同意大部分事情，但是 - 我同意報告中的大部分事情，事實上，我同意 Penny 所說的大部分事情，但請記住，該報告是書面的給奧巴馬總統。

And, you know, and actually, even if President Obama continues in office, I mean the chance of his adopting the recommendations of a presidential task force are not very high.

而且，你知道，實際上，即使奧巴馬總統繼續執政，我的意思是他採納總統特別工作組建議的可能性也不是很高。

I mean, we have history to guide us.

我的意思是，我們有歷史來指導我們。

In fact, just tell you an anecdote, in 2006 I met President Bush, then President of the United States, and at that time his, President Bush's, task force, advisory task force on Iraq, had just submitted a report basically recommended the US withdrawing from Iraq.

其實講個軼事吧，2006年我認識了布什總統，當時的美國總統，當時他的，布什總統的，伊拉克問題諮詢小組，剛剛提交了一份報告，基本上是推薦美國的從伊拉克撤軍。

And President Bush did not adopt the recommendation.

布什總統沒有採納這個建議。

He actually adopted the contrary, which was to increase his troops in Iraq.

他居然反其道而行之，就是在伊拉克增兵。

So I mean that's just an example that quickly came to my mind, when somebody talks about, ah, a report has been written.

所以我的意思是，這只是我很快想到的一個例子，當有人談到，啊，一份報告已經寫好了。

No.

不。

Thanks, Chairman.

謝謝主席。

This is very insightful.

這是很有見地的。

So my next question is to Lora because it's a more maintenance financial question.

所以我的下一個問題是 Lora，因為這是一個維護性更強的財務問題。

So your first quarter gross margin guidance seems to be similar to your first quarter, but your revenue scale is down like almost 5%.

因此，您第一季度的毛利率指引似乎與第一季度相似，但您的收入規模下降了近 5%。

So, why the gross margin is improving in first quarter?

那麼，為什麼一季度毛利率在改善？

And can you give us guidance about depreciation as well?

你能給我們關於折舊的指導嗎？

We still have pretty big volume on 16 nanometer, the profit's improving, and 28 nanometer still accounts for a big part of our revenue this year, with very good profit.

我們16納米的量還是挺大的，利潤在提升，今年28納米的收入還是佔了很大一部分，利潤非常好。

And we continue to do the cost reduction, so we can maintain a pretty good margin despite of decline in revenue in the first quarter, that's the reason.

而且我們繼續降低成本，因此儘管第一季度收入下降，我們仍可以保持相當不錯的利潤率，這就是原因。

Your second question asked about depreciation for the whole year.

你的第二個問題是關於全年的折舊。

Okay, with the $10 billion CapEx in 2017, which will be slightly frontend-loaded by the way, so the depreciation year over year we expect to grow about high teens this year versus last year.

好吧，隨著 2017 年 100 億美元的資本支出，順便說一句，這將略微前端加載，所以我們預計今年的折舊率將比去年增長大約十幾歲。

In terms of first quarter, since last year's CapEx was very much back-end loaded, we expect a more than 10% depreciation increase quarter-over-quarter in the first quarter.

就第一季度而言，由於去年的資本支出被大量後端加載，我們預計第一季度的折舊環比增長超過 10%。

Operator, please proceed with the first caller on the line.

接線員，請接聽線路上的第一個來電者。

Certainly.

當然。

The question comes from the line of Roland Shu of Citigroup.

問題來自花旗銀行Roland Shu 的專線。

Please go ahead.

請繼續。

Hi, good afternoon.

嗨，下午好。

Can you hear me?

你能聽到我嗎？

Yes, I can.

我可以。

We can.

我們可以。

Okay.

好的。

Thanks for taking my question.

感謝您提出我的問題。

First question, I just would like to ask about recently there is a 12-inch wafer price hike.

第一個問題，我想問一下最近有12寸晶圓漲價的情況。

So, would like to ask, what's the impact to the overall gross margin and how long do you think this 12-inch wafer supply and demand imbalance will last?

那麼想問一下，對整體毛利率有什麼影響，您認為這種12英寸晶圓供需失衡會持續多久？

Thank you.

謝謝你。

I think I will repeat Roland's question here.

我想我會在這裡重複羅蘭的問題。

He's asking us about the recent raw wafer price increase.

他向我們詢問了最近晶圓價格上漲的情況。

What's the impact of the raw wafer price increase on our gross margin and how long do we expect the supply/demand imbalance in the raw wafer supply to last?

原晶圓價格上漲對我們的毛利率有何影響？我們預計原晶圓供應的供需失衡會持續多久？

Lora?

勞拉？

The reason for the wafer price increase is because the imbalanced supply/demand situation, so it's more demand than supplies, and manufacturer were trying to reduce the loss or make more profit.

矽片價格上漲的原因是供需失衡，供不應求，製造商試圖減少損失或賺取更多利潤。

So we anticipate some increase in raw wafer price.

因此，我們預計原始晶圓價格會有所上漲。

In terms of the impact to TSMC, for this year we expect impact will be about 0.2% of our gross margin.

就對台積電的影響而言，我們預計今年的影響將約為我們毛利率的 0.2%。

Not very big but it's not very small either.

不是很大，但也不是很小。

In terms of when the situation -- sorry?

就當時的情況而言——抱歉？

Yes, yes, sorry.

是的，是的，對不起。

Continue.

繼續。

Sorry.

對不起。

Yes.

是的。

Let me just answer very simply.

讓我簡單地回答一下。

I mean, we do buy a lot of things and we have a lot of price -- every year, every year, we have a lot of price increases, and we have also a lot of price reductions from our vendors.

我的意思是，我們確實買了很多東西，我們有很多價格——每年，每年，我們都有很多價格上漲，我們的供應商也有很多降價。

And what we do, and I think we do it well, is to try to improve in the past five, six, seven years, improve our structural profitability to the present point.

我們所做的，我認為我們做得很好，是在過去五、六、七年中努力改進，將我們的結構性盈利能力提高到現在的水平。

And what we're going to do from now on is at least to maintain that level of structural profitability.

從現在開始，我們要做的是至少保持這種結構性盈利水平。

And to manage that requires taking a lot of things into account, including, you know, price increase there, price reduction there, cost reduction here, cost reduction there, et cetera, et cetera.

要做到這一點，需要考慮很多因素，包括，你知道，那裡漲價，那裡降價，這裡降低成本，那裡降低成本等等。

Understood, yes.

明白，是的。

I know there is very limited impact to TSMC.

我知道對台積電的影響非常有限。

Okay, thank you.

好的謝謝。

My second question is, your 8-inch revenue declined by double-digits year-on-year last year, despite overall revenue increased by 11% in US dollars last year.

我的第二個問題是，儘管去年整體收入以美元計算增長了 11%，但您的 8 英寸收入去年同比下降了兩位數。

So, I would like to ask, where did this 8-inch weakness come from?

那麼，請問，這8寸的弱點是從哪裡來的呢？

And how does it look for this year?

今年情況如何？

So, Roland is asking, last year, 2016, our overall revenue go up by 11% but our 8-inch wafer revenue declined double-digits.

所以，Roland 是問，去年，2016 年，我們的整體收入增長了 11%，但我們的 8 英寸晶圓收入下降了兩位數。

What causes such weaknesses?

是什麼導致了這樣的弱點？

Secondly, what do you think this year is going to happen, whether or not our 8-inch weakness will persist to this year?

其次，您認為今年會發生什麼，我們8英寸的弱勢是否會持續到今年？

Yes, thank you.

是的，謝謝。

C.C., will you --

C.C.，你會——

Okay.

好的。

Last year, our 8-inch wafer business decreased close to double-digit, mainly because of a lot of products moving into 12-inch wafer.

去年我們的8寸晶圓業務下滑接近兩位數，主要是因為大量產品轉向12寸晶圓。

One of the examples is the fingerprint sensor; we have customers moving from 8-inch wafer to 12-inch wafer.

其中一個例子是指紋傳感器；我們有客戶從 8 英寸晶圓轉向 12 英寸晶圓。

And so this kind of a trend will continue.

因此，這種趨勢將繼續下去。

We expect this year will still decrease slightly, but then we have also do a lot of activities to increase our applications in the 8-inch wafer technology, so the decreasing will be much more minimized as compared with last year.

我們預計今年還是會略有下降，但之後我們也做了很多活動，增加我們在8寸晶圓技術上的應用，所以下降幅度會比去年小很多。

Okay.

好的。

So, can we expect the utilization for 8-inch will be much lower than previous, this year?

那麼，我們是否可以預期今年 8 英寸的利用率會比往年低很多？

The utilization will be closely the same or a little bit above as compared with the last year.

與去年相比，利用率將接近或略高於去年。

Okay, understood.

好的，明白了。

Okay, thank you.

好的謝謝。

All right, let's have the next caller on the line please.

好的，請接聽下一位來電者。

Next question is from the line of Brett Simpson from Arete.

下一個問題來自 Arete 的 Brett Simpson。

Please go ahead.

請繼續。

Thanks very much.

非常感謝。

Dr. Chang, you mentioned 10 nanometer and 7 nanometer was clear sky from a competitive perspective.

Chang博士，您提到10納米和7納米從競爭的角度來看是晴空萬里。

Just interested, if you look at peak capacity for 7 nanometer in wafer terms, will this be a bigger node for TSMC than 28 nanometer?

只是感興趣，如果您從晶圓的角度來看 7 納米的峰值容量，對於台積電來說，這會比 28 納米更大嗎？

Thank you.

謝謝你。

Brett, let me see if I get your question correct.

布雷特，讓我看看我是否答對了你的問題。

You're asking us whether or not 10 nanometer and 7 nanometer will be bigger than 28 nanometer eventually, is that your question?

你問我們 10 納米和 7 納米最終是否會大於 28 納米，這是你的問題嗎？

In wafer terms, yes.

在晶圓方面，是的。

In wafer counts.

在晶片計數中。

Yes.

是的。

In business, in revenue, as well as in wafer counts, you are asking too much.

在業務、收入以及晶圓數量方面，您要求過高。

We'll only answer one of the two, yes.

我們只會回答兩者之一，是的。

Only wafer terms.

只有晶圓條款。

Only wafer counts, okay.

只有晶圓才算數，好吧。

Of 10 and 7, is that right?

10和7，對嗎？

10 and 7 wafer count will be slightly less than 28, slightly.

10 和 7 晶圓數量將略少於 28，略微。

Okay, that's helpful.

好的，這很有幫助。

But the revenue will be much bigger.

但是收益會大很多。

Revenue will be much bigger.

收入會大很多。

Thank you.

謝謝你。

And just a follow-up, with regards to HPC, we're seeing a lot of specialty memory, high-bandwidth memory, increasingly being packaged with your CoWoS.

作為後續行動，關於 HPC，我們看到許多專業內存、高帶寬內存越來越多地與您的 CoWoS 打包在一起。

Does TSMC have any interest in developing stacked memories for HPC?

台積電是否有興趣為 HPC 開發堆疊式存儲器？

Thank you.

謝謝你。

Okay.

好的。

Will TSMC be interested in developing specialty memory such as the high-bandwidth memory ourselves to satisfy our business in CoWoS?

台積電是否有興趣自行開發高帶寬內存等特殊內存以滿足我們在CoWoS的業務？

Well, we don't produce the special memory per se by TSMC but we are working with memory companies to provide the service and the HBM.

好吧，我們本身並不由台積電生產特殊內存，但我們正在與內存公司合作提供服務和 HBM。

And does TSMC expect -- yes -- would TSMC be interested in developing its own memories for HPC long term?

台積電是否期望 - 是的 - 台積電是否有興趣長期開發自己的 HPC 存儲器？

No.

不。

Okay.

好的。

Thanks very much.

非常感謝。

All right.

好的。

Let's come back to the floor.

讓我們回到地板上。

Next question will be coming from Goldman Sachs, Donald Lu.

下一個問題將來自高盛，Donald Lu。

(Spoken in foreign language).

（用外語說）。

Very nice to see you, Chairman.

很高興見到你，主席。

One question is on the demand outlook for next year.

一個問題是關於明年的需求前景。

It seems like everything except the smartphone is declining, and smartphone is increasing only 6%.

似乎除了智能手機以外的所有東西都在下降，而智能手機僅增長了 6%。

How do you get to 4% semi growth?

你如何獲得 4% 的半增長？

Is the smartphone content going to increase?

智能手機內容會增加嗎？

How do I get --?

如何得到 - ？

Right.

正確的。

Chairman says semiconductor growth is 4%.

董事長稱半導體增長率為 4%。

So, Donald's saying that smartphone is 6% --

所以，唐納德說智能手機是 6%——

Yes, and also smartphone mix is going to the low end, as well, so.

是的，智能手機組合也將走向低端，所以。

That's a tough question, Donald.

這是一個棘手的問題，唐納德。

I'm trying to -- I mean, these numbers are all compiled by our own forecaster, and again he tells me what other forecasters are saying, and it seems that all of them are saying about 4%, 3%, 4%, or even more, 5%.

我正在努力——我的意思是，這些數字都是我們自己的預測員編制的，他再次告訴我其他預測員在說什麼，似乎他們都在說大約 4%、3%、4%，甚至更多，5%。

Now you're asking, well, where do they come from?

現在你問，嗯，他們從哪裡來？

Mark says silicon content.

馬克說矽含量。

Answer the question loudly please.

請大聲回答問題。

You're right, the silicon content of smartphone will increase from 2016 to 2017.

沒錯，從 2016 年到 2017 年，智能手機的矽含量將會增加。

So, even the mix is going more to the low end --

所以，即使是組合也越來越低端——

Even mix.

甚至混合。

We see the silicon content for all tiers increases, and the low end increases more.

我們看到所有層級的矽含量都在增加，低端增加更多。

But overall the silicon content will increase high single-digit next year.

但總體而言，明年矽含量將以高個位數增長。

I see.

我懂了。

Great.

偉大的。

Yes, we are making our forecast based on your forecast, so it's good to know why.

是的，我們正在根據您的預測進行預測，所以很高興知道原因。

My second question is more on the AI, although I, like Mark commented, with early stage, but it's pretty hot.

我的第二個問題更多是關於 AI，雖然我像 Mark 評論的那樣處於早期階段，但它非常熱門。

So, how should we look at the opportunity for TSMC for AI?

那麼，我們應該如何看待台積電對於AI的機會呢？

I mean, there's a big -- the server side, building the model, there's also the premise on the handset or PC.

我的意思是，有一個很大的服務器端，建立模型，還有手機或 PC 的前提。

Which market will be bigger and how should we predict it in the future for TSMC?

台積電未來哪個市場會更大，我們應該如何預測？

Is there any thoughts on that?

有什麼想法嗎？

We will see -- we do see a lot of opportunity in, you know, we have four growth platforms.

我們會看到——我們確實看到了很多機會，你知道，我們有四個增長平台。

The first one is mobile, the smartphones.

第一個是移動設備，即智能手機。

The second one is high-speed computing.

第二個是高速計算。

The third one is IOT.

第三個是物聯網。

The fourth one is automotive.

第四個是汽車。

And we do see a lot of opportunities for artificial intelligence in all those three platforms now.

我們現在確實在所有這三個平台中看到了很多人工智能的機會。

Perhaps Mark, will you care about -- will you care to say some more about the high performance computing and perhaps C.C. will say something more about IOT and automotive?

也許馬克，你會關心 - 你會關心更多關於高性能計算和 C.C. 的事情嗎？會說更多關於物聯網和汽車的事情嗎？

Yes.

是的。

I think AI is coming as a killer application for the industry and people are excited.

我認為人工智能正在成為行業的殺手級應用，人們對此感到興奮。

And one of the reason is there is a tremendous progress in the algorithms that makes the machine can do much more than traditional programming -- programmable machine.

原因之一是算法取得了巨大進步，使機器可以比傳統編程做得更多——可編程機器。

This is the machine can think and do things.

這就是機器可以思考和做事。

So for the application side it's immense, as many of you must have read on these growing opportunities.

因此，對於應用程序方面來說，它是巨大的，因為你們中的許多人一定已經閱讀過這些不斷增長的機會。

All the cloud providers are in this field.

所有的雲提供商都在這個領域。

Now, in AI, for us, I think it's also an important opportunity for us.

現在，在人工智能方面，對我們來說，我認為這對我們來說也是一個重要的機會。

Let me just talk about the computing side of AI.

我只談人工智能的計算方面。

AI needs deep learning and collecting a lot of data, therefore it requires very massive computation.

人工智能需要深度學習，收集大量數據，因此需要非常龐大的計算量。

And in the past years our technology development is collecting our pace and we now can provide the world's most competitive technology for those artificial intelligence computing purposes.

在過去的幾年裡，我們的技術發展正在加快步伐，我們現在可以為那些人工智能計算目的提供世界上最具競爭力的技術。

That's number one.

這是第一。

So the people who can get into this field is across the industry, using our technologies.

所以可以進入這個領域的人是整個行業，使用我們的技術。

Secondly is this AI is -- this application is new, so the all the algorithm or the architecture, they are all new.

其次是這個人工智能——這個應用程序是新的，所以所有的算法或架構都是新的。

So the computing -- so the -- hello?

所以計算——所以——你好？

You're on.

輪到你了。

Okay.

好的。

So the -- basically it's the playing field is leveled.

所以 - 基本上是公平的競爭環境。

It's not as before, where the high component is computing.

不像以前那樣，高組件在計算。

It has to be a certain architecture to get into this field.

它必須是某種架構才能進入這個領域。

This is a levelling playing field, so many players are into this field.

這是一個公平的競爭環境，所以很多玩家都進入了這個領域。

That is where the massive innovation can come.

這就是大規模創新可以到來的地方。

So we are very excited.

所以我們非常興奮。

Also because of this we see the application will include many segments.

也正因為如此，我們看到該應用程序將包含許多細分市場。

So we develop this advanced packaging, and that is an area that requires the AI application.

所以我們開發了這個先進的包裝，這是一個需要人工智能應用的領域。

And that area is also we spent several years getting to this and now already come to the fruit that be it InFO or the CoWoS and there'll be multiple generations of that advanced packaging.

而那個領域也是我們花了幾年時間來實現的，現在已經取得了成果，無論是 InFO 還是 CoWoS，而且將會有多代先進封裝。

So, from the technology side, we are prepared to embrace this -- many people call it explosive growth.

因此，從技術方面來說，我們準備好迎接這一點——許多人稱之為爆炸式增長。

Mark, leave some time for C.C. too.

馬克，給 C.C. 留點時間。也。

(Multiple speakers) the AI.

（多個揚聲器）人工智能。

Yes, but there's no -- I think there's a lot of growth opportunities for IOT and automotive too.

是的，但沒有——我認為物聯網和汽車也有很多增長機會。

Well --

出色地 -

In connection with AI as well.

也與人工智能有關。

In connection with the AI, I think we need to have a lot of sensor connectivity.

關於人工智能，我認為我們需要大量的傳感器連接。

You know that right -- constituted a big -- all the data format and connect with that AI so they can do a lot of applications.

你知道那是對的——構成了一個大的——所有數據格式並與那個人工智能連接，這樣他們就可以做很多應用程序。

So we do believe that in the future that IOT, which is the data for our sensor connectivity, put all of them together and combine with other high speed -- high performance computing, and then form the fundamental basis of that there, of the AI.

所以我們相信，在未來，物聯網，也就是我們傳感器連接的數據，將所有這些放在一起，並與其他高速——高性能計算相結合，然後形成人工智能的基礎。 .

That's -- and we do expect the IOT periods to grow very fast, because of the -- in the future you will see a lot of applications, even the autonomous driving -- you need to look at all the background, all the environment surrounding a car.

那就是——我們確實預計物聯網時期會發展得非常快，因為——未來你會看到很多應用，甚至是自動駕駛——你需要查看所有背景，所有周圍環境一輛車。

And also the car has to communicate with the cars together, so everything.

而且汽車必須與汽車一起通信，所以一切。

We protect the future in that the whole world, you will see a lot of connectivity, a lot of sensors.

我們保護整個世界的未來，你會看到很多連接，很多傳感器。

And that's where we constituted our IOT business.

這就是我們構建物聯網業務的地方。

Okay, the next question will be coming from Daiwa's Rick Hsu.

好的，下一個問題將來自 Daiwa 的 Rick Hsu。

Hi.

你好。

Happy new year, Dr. Chang and all.

張醫生和大家新年快樂。

I guess my first question goes back the -- your second quarter and third quarter business outlook.

我想我的第一個問題可以追溯到您的第二季度和第三季度業務展望。

I think, despite a weak Q1 revenue, Mr. Chairman was talking about your second quarter revenue and Q3 revenue will grow significantly.

我認為，儘管第一季度收入疲軟，但主席先生正在談論您的第二季度收入，第三季度收入將顯著增長。

And you also mentioned about your 10-nanometer ramp up would be also meaningful in these two quarters.

你還提到你的 10 納米的提昇在這兩個季度也很有意義。

What's that main demand driver behind that growth momentum in terms of applications?

就應用程序而言，增長勢頭背後的主要需求驅動因素是什麼？

Would that be just coming from mobile?

那會不會只是來自手機？

Or across the board of mobile, professional gaming and et cetera?

還是橫跨移動、專業遊戲等領域？

Just repeat the question.

只是重複問題。

Yes.

是的。

It's, Rick, your question is what's the growth driver for our second quarter and third quarter business, is it only from mobile, or from other areas?

里克，你的問題是我們第二季度和第三季度業務的增長動力是什麼，是僅來自移動領域，還是來自其他領域？

Well, actually, the simplest answer to your question is growth drivers are always customers' demand, you know.

好吧，實際上，對你的問題最簡單的回答是增長動力始終是客戶的需求，你知道的。

And -- but I will elaborate.

並且 - 但我會詳細說明。

I think we are more -- we do have more concentrated customers today than we did several years ago.

我認為與幾年前相比，我們今天的客戶確實更加集中。

So those particular customers' demand fluctuation impacts our seasonal -- I mean, our quarterly fluctuations a great deal -- a great deal.

因此，那些特定客戶的需求波動會影響我們的季節性——我的意思是，我們的季度波動很大——很大。

And so, seasonality, to us, doesn't mean very much any more.

因此，對我們來說，季節性不再意味著什麼。

Every year's seasonality is different from the next year's or last year's.

每年的季節性都與下一年或去年不同。

Last year we had a pretty low first quarter and a pretty strong second quarter.

去年，我們的第一季度業績很低，而第二季度業績相當強勁。

And then the third and fourth quarters were even stronger.

然後第三節和第四節更加強勁。

Yes, I think, right?

是的，我想，對吧？

And this year, at least at this point, we see a somewhat different pattern.

今年，至少在這一點上，我們看到了一些不同的模式。

So, yes, it was -- it's customer demand.

所以，是的，這是 - 這是客戶需求。

And of course, technology plays a part.

當然，技術也起了一定作用。

10 nanometers ramp-up.

10 納米加速。

Thank you so much.

太感謝了。

That's clear.

這很清楚。

The second question probably goes to Lora or maybe to Mr. Chairman as well.

第二個問題可能會問 Lora 或主席先生。

Can you give us more insight or color of your cash dividend this year?

你能給我們更多關於你今年現金分紅的見解或顏色嗎？

Any kind of ballpark number?

任何類型的球場號碼？

What was the question?

問題是什麼？

He wants to know additional color on this year's dividends per share.

他想知道今年每股股息的其他顏色。

Lora?

勞拉？

Okay.

好的。

I have a short answer.

我有一個簡短的回答。

We will increase cash dividends in 2017.

2017年我們將增加現金分紅。

Magnitude?

震級？

I prefer to wait for the board meeting in February.

我更願意等待 2 月份的董事會會議。

You're going to know by then.

到那時你就會知道了。

Thank you so much.

太感謝了。

You won't have long to wait.

您不會等太久。

I mean, February is something like -- I don't remember the exact date of the Board meeting.

我的意思是，2 月大概是——我不記得董事會會議的確切日期。

February 14.

2 月 14 日。

Yes.

是的。

This February.

今年二月。

Eighth and ninth.

第八和第九。

Well, I think, yes, I'll pause.

好吧，我想，是的，我會暫停。

The final decision is made by the annual shareholders' meeting and that's in June.

最終決定由每年 6 月舉行的年度股東大會做出。

The Board's recommendation on the dividend will be announced to the public after the Board meeting.

董事會關於股息的建議將在董事會會議後向公眾公佈。

Thank you.

謝謝你。

All right.

好的。

Next question will be coming from HSBC, Steven Pelayo.

下一個問題將來自匯豐銀行，Steven Pelayo。

Great.

偉大的。

Thank you.

謝謝你。

The segments that you report to us, communications, consumer, computing and other, are helpful, but now two-thirds of your business is coming from computing, so we can't really divine a lot from that.

你向我們報告的細分市場，通信、消費者、計算和其他，很有幫助，但現在你三分之二的業務來自計算，所以我們不能從中真正預測很多。

We're all excited about automotive and AI and high performance computing, IOT.

我們都對汽車、人工智能和高性能計算、物聯網感到興奮。

If we want to use those as the segments, what percentage of revenues does TSMC get from each of those categorizations today?

如果我們想使用這些作為細分市場，台積電今天從這些類別中獲得的收入百分比是多少？

(Inaudible).

（聽不清）。

For last year, roughly with the mobile, it's 55%, 56% and high performance computing, for the definition I just said, it's about 15%, roughly.

就去年而言，移動端大致為 55%、56% 和高性能計算，對於我剛才所說的定義，大致約為 15%。

And PC is not a growing sector, but is about 10%.

而 PC 不是一個增長的部門，但大約是 10%。

And then IOT and automotive, both of them are less than 10%.

然後是IOT和汽車，都不到10%。

Okay.

好的。

Maybe a question for Lora.

也許是勞拉的問題。

I'm very impressed with your gross margins in the first quarter, potentially going up, even on down maybe 10% in revenues.

第一季度的毛利率給我留下了深刻的印象，可能會上升，甚至可能下降 10% 的收入。

Could you talk a little bit about the nodes and the utilization rates, maybe, in the first quarter?

您能否談談第一季度的節點和利用率？

Is 16-nanometer falling off significantly, yet you're making up the margin elsewhere?

16 納米是否大幅下降，但您正在其他地方彌補利潤？

Help us understand maybe what's driving the margins in the first quarter, if we looked at each of the individual nodes and how they're going to perform?

如果我們查看每個單獨的節點以及它們將如何執行，請幫助我們了解可能是什麼推動了第一季度的利潤率？

The 16-nanometer is not falling off.

16 納米沒有脫落。

I just said I wish our market share were higher, okay.

我只是說我希望我們的市場份額更高，好吧。

It's not falling off.

它沒有掉下來。

So 16-nanometer will be flat, sequentially?

那麼 16 納米會依次變平嗎？

I'm sorry.

對不起。

Other than 16-nanometer not falling off, I didn't hear the question.

除了16nm不掉，沒聽到提問。

Steven, actually you are asking a product mix thing, right?

史蒂文，實際上你是在問產品組合問題，對吧？

It's -- there's more than product mix.

它 - 不僅僅是產品組合。

Actually, it's improving profitability in each technology node, particularly 16-nanometer, and we have a very significant amount of revenue coming from 16-nanometer in the first quarter.

實際上，它正在提高每個技術節點的盈利能力，尤其是 16 納米，我們在第一季度從 16 納米獲得了非常可觀的收入。

And the 28-nanometer continued to be a very strong node.

28 納米仍然是一個非常強大的節點。

Those two nodes actually supported our first quarter margin pretty well, despite of lesser revenue growth or declined revenue growth.

儘管收入增長放緩或收入增長下降，但這兩個節點實際上很好地支持了我們第一季度的利潤率。

That was the main reason.

這是主要原因。

And the past the -- as I said earlier -- continual cost improvement efforts in operation side, that also helps.

而過去——正如我之前所說的——在運營方面持續的成本改進努力，這也有幫助。

Just a follow-up there.

只是那裡的後續行動。

If you look at your full year gross margins, 2016, about 50% or so, you're suggesting maybe even as much as 53% or higher in the first quarter.

如果你看看你的全年毛利率，2016 年，大約 50% 左右，你建議第一季度甚至可能高達 53% 或更高。

Are TSMC's structural gross margins maybe higher this year that we can maybe look for a couple of hundred basis points' growth for full year 2017 gross margins?

台積電今年的結構性毛利率是否可能更高，我們可以期待 2017 年全年毛利率增長數百個基點？

What was the question?

問題是什麼？

All right, Steven, if I understand your logic, this question is, given 50% growth margin for TSMC for the full year, and 10-nanometer will take two points away from our margins in the second half, then that means first half our gross margin will be very good, to get the 50% average, and so --

好吧，史蒂文，如果我理解你的邏輯，這個問題是，考慮到台積電全年 50% 的增長率，下半年 10 納米將使我們的利潤率減少兩個百分點，那麼這意味著我們的上半年毛利率會非常好，達到 50% 的平均水平，所以——

Well, look.

嗯，看。

Let's not take all the numbers I say literally.

我們不要從字面上理解我所說的所有數字。

I mean, when I said -- I mean, we do have a narrow range.

我的意思是，當我說 - 我的意思是，我們的範圍確實很窄。

It's not -- the range is not zero.

它不是——範圍不為零。

When I say that we want to keep our structural profitability at about close to 50%, I mean, at least give me one or two points leeway, okay?

當我說我們要將我們的結構性盈利能力保持在接近 50% 時，我的意思是，至少給我一兩個點的餘地，好嗎？

It's not exact figures.

這不是確切的數字。

Give me one or two points leeway.

給我一兩分餘地。

Yes.

是的。

So it's like 49%, 50%, yes.

所以大概是 49%、50%，是的。

We really can't even forecast the next quarter's gross margin that closely.

我們真的無法準確預測下一季度的毛利率。

We always have a range whether two or three points.

我們總是有一個範圍，無論是兩分還是三分。

Yes, I mean, two or three points.

是的，我的意思是，兩三點。

We cannot be that precise.

我們不能那麼精確。

But I think Steven's main question is, do we increase our structural profitability this year?

但我認為史蒂文的主要問題是，我們今年是否會提高結構性盈利能力？

Oh.

哦。

Well, I think that most of that -- most of the improvement has already happened.

好吧，我認為大部分 - 大部分改進已經發生。

It has already happened.

它已經發生了。

If you look back six or seven years, we have improved it by several hundred basis points in the -- and that was not easy at all.

如果你回顧六七年，我們已經將它提高了數百個基點 - 這一點都不容易。

That was not easy.

這並不容易。

And I think that I will say most of the improvement has already occurred, so from this point on, our priority is to maintain it.

而且我想我會說大部分改進已經發生，所以從現在開始，我們的首要任務是維護它。

If I could just sneak one more quick one in.

要是我能再偷偷帶一個快點進去就好了。

When do you think 10-nanometers will be more than 10% of revenues?

您認為 10 納米何時會超過收入的 10%？

Which quarter of this year?

今年哪個季度？

Which quarter 10-nanometer will exceed 10%.

哪個季度 10 納米將超過 10%。

Do we answer questions like that?

我們會回答這樣的問題嗎？

Sometimes in the second half of this year, yes.

有時在今年下半年，是的。

Well, if we answer questions like that I think it will be Lora.

好吧，如果我們回答這樣的問題，我認為會是 Lora。

I mean, you don't have to answer.

我的意思是，你不必回答。

The big volume comes on the second half.

大音量出現在下半場。

So, the whole year will be more than 10%.

所以，全年都會超過10%。

Well, his question is when does it exceed the 10%, I think.

好吧，我想他的問題是什麼時候會超過 10%。

Third quarter.

第三季度。

Really?

真的嗎？

Okay, next question will be coming from Credit Lyonnais, Sebastian Hou.

好的，下一個問題將來自 Credit Lyonnais，Sebastian Hou。

Thank you, Dr. -- so Chairman and the two CEOs --

謝謝你，博士——主席和兩位首席執行官——

Careful now.

現在小心。

He means margin.

他的意思是保證金。

He doesn't mean gross margin.

他指的不是毛利率。

Yes, revenue.

是的，收入。

Revenue.

收入。

Yes.

是的。

Okay, good.

好的。

Just wanted to be sure that Lora understood the question.

只是想確定 Lora 理解這個問題。

Yes.

是的。

Thank you.

謝謝你。

So my first question is on the assumption of the growth rate that Chairman already mentioned about smartphone unit growth this year you expect 6%.

所以我的第一個問題是假設主席已經提到今年智能手機單位增長的增長率是 6%。

And Mark mentioned about the silicon (multiple speakers).

Mark 提到了矽（多個揚聲器）。

What did you say?

你說什麼？

I'm sorry, what did you say?

對不起，你說什麼？

The growth rate.

增長率。

Smartphone, Chairman mentioned units.

智能手機，主席提到單位。

Oh, smartphone?

哦，智能手機？

Okay.

好的。

Yes, 6% and silicon counters grow about high single-digit, per Mark, which means we're growing about 13%, 14%.

是的，根據馬克，6% 和矽計數器增長了大約高個位數，這意味著我們增長了大約 13%、14%。

And given that mobile account for 55% to 60% of the total revenue this year, which means smartphone alone, or mobile device alone, it contributes 7% to 8% of the growth of this year, whilst the growth in high performance computing and -- double-digit growth -- and also IOT growth, of 34% the whole market, which means -- seems like easily to reach the high end of the growth, even close to 10% for this year.

考慮到今年移動業務佔總收入的 55% 至 60%，這意味著僅智能手機，或僅移動設備，它就貢獻了今年增長的 7% 至 8%，而高性能計算和——兩位數的增長——以及整個市場 34% 的物聯網增長，這意味著——似乎很容易達到增長的高端，今年甚至接近 10%。

I'm not sure if my assumption is right, or too bullish?

我不確定我的假設是否正確，還是過於樂觀？

Assumption is right, calculation may not be.

假設是對的，計算未必是對的。

The -- yes, I think that most of the growth this year will be -- come from smartphone.

是的，我認為今年的大部分增長將來自智能手機。

80% of that.

其中的 80%。

And that's because IOT and automotive are small.

那是因為物聯網和汽車都很小。

They do have a -- looking to 20% to 30% growth for those growth areas, but contribute to the whole company is still very small.

他們確實希望這些增長領域實現 20% 到 30% 的增長，但對整個公司的貢獻仍然很小。

So to compose the rest of it.

所以要組成它的其餘部分。

So I think -- I don't calculate any up to that number.

所以我認為 - 我沒有計算任何達到該數字的數字。

I think it's still in line about 7%, between 5% to 10% probably in the middle.

我認為它仍然在 7% 左右，可能在 5% 到 10% 之間。

That's my calculation.

這是我的計算。

Okay, thank you.

好的謝謝。

And my second question is on the President-Elect Donald Trump in the United States, that his policy is to create more job, and thank you, Chairman, for mentioning about how TSMC has helped create more jobs indirectly in the United States.

我的第二個問題是關於美國當選總統唐納德特朗普，他的政策是創造更多的就業機會，謝謝主席提到台積電如何間接地幫助美國創造更多的就業機會。

But I'm wondering if you have already got some pressure from your customers in the US that maybe when they do the calculation factoring the tax incentives that they think that maybe having manufacturing back in the US will be more -- can help them to improve their profit?

但我想知道你是否已經從你的美國客戶那裡得到了一些壓力，也許當他們計算稅收優惠時，他們認為也許讓製造業回到美國會更多 - 可以幫助他們改進他們的利潤？

I'm not sure.

我不確定。

So I'm just wondering whether you think about or ever consider building a fab in the US, and under what kind of the scenario and circumstances?

所以我只是想知道你是否考慮過或曾經考慮過在美國建晶圓廠，在什麼樣的場景和情況下？

Sebastian, your question is whether or not we have pressure from US-based customers wanting us to build a manufacturing site in the US so that they can capture --

塞巴斯蒂安，你的問題是我們是否有來自美國客戶的壓力，他們希望我們在美國建立一個製造基地，以便他們能夠捕獲——

No.

不。

-- incentive?

- 激勵？

No.

不。

Okay.

好的。

My -- sorry, my second part of that question is under what scenario and circumstances will TSMC consider building a fab in US?

我的 - 抱歉，我這個問題的第二部分是在什麼情況下台積電會考慮在美國建廠？

Will we ever consider going there and build a fab in --

我們會考慮去那裡建一個晶圓廠嗎？

I do not rule it out.

我不排除它。

Okay.

好的。

Thank you.

謝謝你。

I do not rule it out, but I see a lot of sacrifices that we and our customers will have to make if we do that.

我不排除這種可能性，但我看到如果我們這樣做，我們和我們的客戶將不得不做出很多犧牲。

Keep in mind that we earned our business in the United States, not by lower labor costs in Taiwan.

請記住，我們是在美國贏得業務，而不是靠台灣較低的勞動力成本。

In fact, on the whole, our labor costs in Taiwan -- our labor costs in Taiwan are not lower than the United States.

其實整體來說，我們在台灣的人工成本——我們在台灣的人工成本並不比美國低。

Now, we earn our business by being good.

現在，我們通過做好事來贏得業務。

Let's give you an example.

讓我們舉個例子。

Every year we send thousands of engineers from one location to another, and we have three locations in Taiwan, Taichung, Hsinchu and Tainan.

每年我們都會派出數千名工程師從一個地點到另一個地點，我們在台灣、台中、新竹和台南設有三個地點。

Now Taichung and Hsinchu are within daily commuting distance.

現在台中和新竹都在日常通勤距離之內。

Tainan -- and you can even make a point that Tainan and Hsinchu and Tainan and Taichung are within daily commuting distance also.

台南——你甚至可以指出，台南和新竹以及台南和台中也在日常通勤距離之內。

It's a little hard but I know of people in New York, Manhattan, I know people that commute an hour-and-a-half, two hours each way every day.

這有點難，但我認識紐約和曼哈頓的人，我知道有人每天單程通勤一個半小時，兩個小時。

If you are willing to do that you can certainly commute between Tainan and Taichung or Tainan and Hsinchu also.

如果你願意這樣做，你當然可以在台南和台中或台南和新竹之間往返。

Now, backing up a few steps, you don't want to do that, it takes too long.

現在，後退幾步，你不想那樣做，它需要太長時間。

It's still within weekly commuting distance.

它仍然在每週的通勤距離之內。

So every year we send literally over a thousand, 2000 engineers from one location to another who'll be there for months and that allows us to ramp up things quickly and to solve problems quickly also where one location, one fab has got a problem then another fab -- engineers from another fab can go ahead and help them.

因此，每年我們都會從一個地點派遣超過 1000、2000 名工程師到另一個地點，他們將在那裡待上幾個月，這使我們能夠快速提高性能并快速解決問題，即使在一個地點、一個晶圓廠出現問題時另一個晶圓廠——來自另一個晶圓廠的工程師可以繼續幫助他們。

Literally thousands, thousands of engineers do that every year.

每年都有成千上萬的工程師這樣做。

Now if we have a plant in the US we won't be able to do that anymore.

現在，如果我們在美國有一家工廠，我們將無法再這樣做了。

Second point, we have thousands of vendor people here.

第二點，我們這裡有成千上萬的供應商。

Actually they're already in Hsinchu -- already in Hsinchu, Tainan and some in Taichung also.

其實他們已經在新竹了，已經在新竹，台南，還有一些在台中。

Thousands of engineers from our partners located here.

來自我們合作夥伴的數千名工程師在這里工作。

These are things that are not low labor cost.

這些都是人工成本不低的東西。

These are things that we're going to lose if we set up a plant in the US.

如果我們在美國建廠，這些都是我們將失去的東西。

If we lose these things our customers will lose too.

如果我們失去這些東西，我們的客戶也會失去。

Yes, I don't rule it out and actually I would never rule that out but year after year time and again we consider the subject and we have not made the decision to go there.

是的，我不排除它，實際上我永遠不會排除它，但年復一年，我們一次又一次地考慮這個主題，我們還沒有做出去那裡的決定。

Except of course early in our life we did set up WaferTech in the United -- and it's still going.

當然，除了在我們生命的早期，我們確實在美國建立了 WaferTech——而且它還在繼續。

It has between 1500 employees -- about 1500 employees.

它擁有 1500 名員工——大約 1500 名員工。

It's still going but other than that -- and that was set up in 1996.

它仍在繼續，但除此之外——它是在 1996 年建立的。

After that we consider the question every so often and we have not made the decision to set up a plant in the United States.

之後我們經常考慮這個問題，我們沒有做出在美國建廠的決定。

Okay, with that we need to go back to the line.

好的，我們需要回到線。

Operator, can you please have the next caller on the line?

接線員，請接聽下一位來電者好嗎？

Certainly.

當然。

The next question is from the line of Mehdi Hosseini from SIG.

下一個問題來自 SIG 的 Mehdi Hosseini。

Please go ahead.

請繼續。

Yes, thanks for taking my question and Dr. Chang, good to hear your voice on the call.

是的，感謝張博士接受我的問題，很高興在電話中聽到你的聲音。

I have a question on the 10 nanometer.

我有一個關於 10 納米的問題。

If your 16 nanometer market share is about 65%, what is your view on your market share when you migrate to 10 nanometer?

如果您的 16 納米市場份額約為 65%，那麼當您向 10 納米遷移時，您對您的市場份額有何看法？

And I have a follow up.

我有跟進。

Well, our market share in 10-nanometer.

那麼，我們在 10 納米的市場份額。

I think I vowed about once -- must have been a year ago because I was here last time a year ago -- I vowed then that every new node from now on we have a market share higher than our market share on 16.

我想我發誓了一次——一定是一年前，因為一年前我最後一次來過這裡——我當時發誓從現在開始每個新節點的市場份額都將高於我們在 16 時的市場份額。

Okay, so more than 65%, is that your answer?

好的，超過 65%，這就是你的答案嗎？

What?

什麼？

Would that be above 65%?

那會超過65％嗎？

Very definitely.

非常肯定。

Very definitely.

非常肯定。

Okay.

好的。

Then when we look into 7 nanometer and some of your competitors have a different definition of 7. Can you help us understand how your N7, compete and is positioned against your competitors?

然後，當我們研究 7 納米時，您的一些競爭對手對 7 有不同的定義。您能幫助我們了解您的 N7 如何與您的競爭對手競爭和定位嗎？

So Mehdi is saying that our 7 nanometer definition is different from other companies' 7 nanometer definition, so how do we compete at 7?

所以 Mehdi 說我們的 7 納米定義與其他公司的 7 納米定義不同，那麼我們如何在 7 納米上競爭？

Our 7 nanometer definition is different from somebody else's?

我們7納米的定義和別人的不一樣？

Well, I'll let Mark answer.

好吧，我會讓馬克回答。

I wouldn't want to comment on other people's 7 nanometer.

我不想評論別人的 7 納米。

Our 7 nanometer is under qualification now and it will be qualified as according to plan from the end of first quarter.

我們的7納米現在正在認證中，按照計劃從一季度末開始認證。

And we have already more than 20 customers design-in on this 7 nanometer and this year alone we estimate will be 15, 20 tapeouts already.

我們已經有 20 多個客戶在這個 7 納米上進行設計，僅今年一年，我們估計已經有 15、20 個 tapeout。

So this is our momentum build so far on a seven nanometer and no other competitor is getting to this stage of this leading edge technology.

因此，這是我們目前在 7 納米上建立的勢頭，沒有其他競爭對手能夠達到這一領先技術的這個階段。

So we have -- we are to -- remember I mentioned last time we'll have 5 nanometer two years from now and forget about the name.

所以我們 - 我們要 - 記住我上次提到的，我們將在兩年後擁有 5 納米，忘記這個名字。

That will be a full node shrink and that will sit competing well with any technology come out at that time.

這將是一個完整的節點收縮，並且可以與當時出現的任何技術進行很好的競爭。

Okay, let me add some on 7 nanometer.

好的，讓我添加一些關於 7 納米的信息。

We will maintain our 7 nanometer competitiveness just like we do on 28 and 16.

我們將保持我們在 7 納米上的競爭力，就像我們在 28 和 16 上所做的那樣。

We will have a technology currently planned as 7 nanometer but with the EUV insertion in the second year of 7 nanometer, just one year -- approximately one year after.

我們將擁有一項目前計劃為 7 納米的技術，但在第二年 7 納米時插入 EUV，僅一年 - 大約一年後。

And that can greatly simplify the process and without increase the cost.

這可以大大簡化流程，而不會增加成本。

And that is if customer can take advantage of minor design it can further reduce their density -- increase their density and reduce their die cost.

也就是說，如果客戶可以利用較小的設計，它可以進一步降低密度——增加密度並降低模具成本。

That is our plan to maintain that competitiveness of the 7 nanometer the year after.

這是我們計劃在明年保持 7 納米的競爭力。

So we think 7 nanometer is a well adopted node by all the customers and we plan for the subsequent technology to shore up the demand continuously.

所以我們認為 7 納米是所有客戶都很好採用的節點，我們計劃後續技術不斷支撐需求。

And we hope to use this technology -- I mean the second-year technology to prepare for the EUV production experience for the full fledged EUV technology on 5. Then our customers can have a very hopefully smooth getting to from our 7 to our 5 nanometer technology.

我們希望使用這項技術——我的意思是第二年的技術，為 5 納米上成熟的 EUV 技術的 EUV 生產經驗做準備。然後我們的客戶可以非常有希望地從我們的 7 納米順利過渡到我們的 5 納米技術。

So that is how we maintain our technology competitiveness.

這就是我們保持技術競爭力的方式。

May I ask a clarification question?

我可以問一個澄清問題嗎？

Sure.

當然。

I think if I heard you correctly is you will insert -- if I heard you correctly you said you will insert EUV in this second year of your 7 nanometer, which suggests to me that you may actually be able to commercialize (technical difficulty) conclusion here?

我想如果我沒聽錯你會插入——如果我沒聽錯你說你會在你的 7 納米的第二年插入 EUV，這對我來說意味著你實際上可以商業化（技術難度）結論這裡？

Mehdi, I'm afraid that your voice was broken at some point in time.

Mehdi，我擔心你的聲音在某個時間點被打破了。

Can you please repeat?

你能重複一遍嗎？

We heard you, that you said that we will insert EUV in the second year of 7 nanometer and then you had something but it was cut off.

我們聽到你，你說我們將在 7 納米的第二年插入 EUV，然後你有一些東西但它被切斷了。

Can you repeat that part?

你能重複那部分嗎？

Sure.

當然。

Yes, sorry about that.

是的，對此感到抱歉。

I just wanted to make sure I understand the EUV commentary correctly.

我只是想確保我正確理解 EUV 評論。

You said that you will insert EUV in the second year of 7 nanometer.

你說你會在7納米的第二年插入EUV。

That suggests to me that you may actually be able to insert EUV before competitors that have said insertion would happen at 5. Is that the right conclusion as we compare and try to better understand your competitiveness at 7 nanometer?

這向我表明，您實際上可以在競爭對手之前插入 EUV，這些競爭對手錶示插入將在 5 納米發生。當我們比較並試圖更好地了解您在 7 納米的競爭力時，這是正確的結論嗎？

Yes, we will commercialize the 7 EUV in the second year of our 7-nanometer production.

是的，我們將在 7 納米生產的第二年將 7 EUV 商業化。

I wouldn't comment on when will our competitor insert their EUV.

我不會評論我們的競爭對手何時會插入他們的 EUV。

That is -- I don't intend to do the comparison here.

也就是說——我不打算在這裡進行比較。

Got it.

知道了。

Thanks so much for the details.

非常感謝您提供詳細信息。

I appreciate it.

我很感激。

Thank you.

謝謝你。

Now we come back to the floor.

現在我們回到地板上。

The next question will be going to Deutsche Bank's Michael Chou again.

下一個問題將再次轉到德意志銀行的 Michael Chou。

Just two quick questions.

只是兩個簡單的問題。

One is, what will be the tax rate in 2017?

一是，2017年的稅率是多少？

It's similar to 2016, 13%, 14% effective tax rate.

與 2016 年 13%、14% 的有效稅率相似。

Second question, sir.

第二個問題，先生。

If we look at the first three years of 7 nanometer's TAM, will that be bigger than 28 nanometer for the first three years as well?

如果我們看一下 7 納米前三年的 TAM，前三年是否也會大於 28 納米？

Yes, 10.

是的，10。

Total addressable market.

總目標市場。

Total available --

可用總量 --

Total addressable market.

總目標市場。

Addressable market, yes.

目標市場，是的。

In terms of dollar much bigger.

以美元計算要大得多。

Much bigger.

大得多。

Okay then going to HSBC's Steven Pelayo again.

好的，然後再去匯豐銀行的 Steven Pelayo。

Just two quick questions from me as well.

我也只有兩個簡短的問題。

With 2016 finished now I believe if I remember correctly from your 20-F 2015 you had two customers that were 16% of revenues each.

現在 2016 年結束了，我相信如果我沒記錯的話，你的 20-F 2015 年你有兩個客戶，每個客戶佔收入的 16%。

I'm curious, what was your customer concentration in 2016?

我很好奇，您在 2016 年的客戶集中度是多少？

I think in general our top five customers account for about 50% of revenue and top 10 about 70%.

我認為一般來說，我們的前五名客戶約佔收入的 50%，前 10 名客戶約佔 70%。

This percentage hasn't changed much over years.

這個百分比多年來沒有太大變化。

Any more details on the ones you disclosed that are over 10% of revenues?

關於您披露的超過收入 10% 的項目，是否有更多詳細信息？

I can wait for the 20-F.

我可以等待 20-F。

Please wait for 20-F.

請等待 20-F。

Okay.

好的。

My second question was you generated over TWD200 billion in free cash flow this year on TWD950 billion in revenues.

我的第二個問題是，你們今年在 9500 億新台幣的收入中產生了超過 2000 億新台幣的自由現金流。

Roughly 20%, 22% of revenue is free cash flow.

大約 20%、22% 的收入是自由現金流。

Quite nice but if you're talking about high teens growth in depreciation this year, maybe 10% growth in your EBIT you're probably going to add another TWD80 billion or so by my calculation to your free cash flow, which could get you over 30% of revenues.

相當不錯，但如果你說的是今年折舊的十幾歲增長，也許你的息稅前利潤增長 10%，根據我的計算，你的自由現金流可能會再增加 800 億新台幣左右，這可能會讓你度過難關收入的 30%。

Is that a realistic target to think about this year, TSMC generates more than 30% of revenues in free cash flow?

考慮到今年台積電 30% 以上的收入來自自由現金流，這是一個現實的目標嗎？

I cannot be that precise but I think our free cash flow will grow this year versus last year.

我不能說得那麼準確，但我認為我們今年的自由現金流會比去年有所增長。

Now going to Credit Suisse, Randy Abrams.

現在去瑞士信貸，Randy Abrams。

I've got two quick follow ups.

我有兩個快速跟進。

The lull that you're seeing in the business now, could you talk about how broad based that lull is, if it's across application in markets or if it's select parts?

您現在在業務中看到的停滯，您能否談談這種停滯的基礎有多廣泛，如果它是跨市場應用程序還是選擇部分？

The lull -- you mentioned a lull in the business that you're moving through.

平靜——你提到了你正在經歷的業務的平靜。

How broad is that lull across application or your customer base?

跨應用程序或您的客戶群的停滯範圍有多廣？

The lower end?

低端？

The lull.

平靜。

No, you talked about like a slowdown, so for that slowdown if you could talk by application if it's across your business broad based or if it's isolated to certain areas.

不，你談到了經濟放緩，所以對於這種放緩，如果你可以通過應用程序來討論它是在你的業務中廣泛存在還是孤立於某些領域。

First half of this year, what's the weaker area of our demand, right?

今年上半年，我們需求的薄弱環節是什麼，對吧？

(Inaudible).

（聽不清）。

I think mobile.

我認為移動。

What was the question?

問題是什麼？

The question is with respect to the first half of this year what will be the area that the demand is relatively weaker?

問題是今年上半年需求相對疲軟的領域是什麼？

Do you want market sector?

你想要市場部門嗎？

Yes, market.

是的，市場。

Broad based.

基礎廣泛。

(Multiple speakers)

（多個揚聲器）

Can you answer that question, Lora?

你能回答這個問題嗎，勞拉？

What was the question?

問題是什麼？

Sorry.

對不起。

Can you please tell me what was the question?

你能告訴我問題是什麼嗎？

How broad based is the slowdown and which applications are you seeing that slowdown and any areas holding up stronger?

放緩的基礎有多廣泛？您看到哪些應用程序放緩以及哪些領域保持強勁？

First quarter?

第一季度？

First quarter or first half.

第一季度或上半年。

Well, I think Mark, do you know the answer, Mark?

嗯，我想馬克，你知道答案嗎，馬克？

Let me answer the question.

讓我回答這個問題。

The slowdown really come from the seasonality of our major customers in the mobile areas.

放緩確實來自我們在移動領域的主要客戶的季節性。

And there will be minor inventory correction because as Lora mentioned, exiting last year is two days above inventory and exiting first quarter may be slightly higher still.

並且會有輕微的庫存修正，因為正如 Lora 提到的那樣，去年退出的庫存比庫存高出兩天，而第一季度退出的庫存可能會略高。

So we see some minor inventory correction going after but we don't see a major slowdown at all.

因此，我們看到一些小的庫存調整之後出現，但我們根本沒有看到大幅放緩。

And the second follow up for the R&D expense.

第二次跟進研發費用。

I think you talked about increase.

我想你談到了增長。

If you could talk about the range you see R&D moving in an increased percent of sales.

如果你能談談範圍，你會看到研發在銷售額中所佔百分比有所增加。

R&D as a percent of sales, right?

研發佔銷售額的百分比，對嗎？

You talked about it rising.

你談到它正在上升。

Right, we say we are going to increase the R&D spending as well as the percentage, so what's the percentage?

對了，我們說要增加R&D的投入，還有百分比，那麼百分比是多少呢？

It's approximately 8%.

大約是 8%。

Percent.

百分。

8%.

8%。

Last year it was 7.5%.

去年是 7.5%。

This year it will be slightly above 8%.

今年將略高於8%。

When I said a moderate increase in its percent, I mean several tenths basis points, alright?

當我說它的百分比適度增加時，我的意思是十分之幾的基點，好嗎？

Several tenths basis points.

十分之幾的基點。

Alright, follow up question from Goldman's, Donald Lu.

好的，請跟進高盛 Donald Lu 的問題。

I have a question on inventory -- in Q4 has declined quite substantially and will it increase substantially in Q1 and would that be potential boost to gross margins in Q1?

我有一個關於庫存的問題——第四季度庫存大幅下降，第一季度是否會大幅增加，這是否會提高第一季度的毛利率？

I don't believe so.

我不這麼認為。

Not in Q1.

不在第一季度。

Okay, follow up question from Credit Lyonnais, Sebastian Hou and I think that should be our last question for this conference today.

好的，請跟進里昂信貸銀行、Sebastian Hou 的問題，我認為這應該是我們今天在這次會議上的最後一個問題。

Thank you for letting me ask.

謝謝你讓我問。

My question is, is there any impacts you see there from the minimum wage hike and (inaudible) new regulation by the government, Taiwan Government?

我的問題是，最低工資上調和台灣政府的（聽不清）新規定對您有什麼影響嗎？

What was the question?

問題是什麼？

On the cost side.

在成本方面。

Okay, what's the impact of the government's new policy on (inaudible) and the minimum wage.

好的，政府的新政策對（聽不清）和最低工資有什麼影響。

Yes, our first estimate is that it will increase our cost about 30 basis points, 30 basis points.

是的，我們的第一個估計是它會增加我們的成本大約 30 個基點，30 個基點。

That's right isn't it, Lora?

是的，不是嗎，勞拉？

That's right, 0.3% of cost.

沒錯，成本的0.3%。

Yes.

是的。

So it's on the cost of goods sold.

因此，它取決於所售商品的成本。

And my second question is on the 2016 CapEx.

我的第二個問題是關於 2016 年的資本支出。

That turns out to be actually slightly higher than the last conference revision, about like TWD500 million, so I wonder whether that's just a cash pull-in -- cash payment pull-in or any other plan change of the capacity?

這實際上比上次會議修訂略高，大約 5 億新台幣，所以我想知道這是否只是現金拉動——現金支付拉動或任何其他容量計劃變化？

It's just pull-in of a payment.

這只是付款的拉入。

There's nothing changing in capacity build up.

能力建設沒有任何變化。

Thank you.

謝謝你。

Okay, I think we have concluded our Q&A session.

好的，我想我們的問答環節已經結束了。

Before we conclude today's conference please be advised that replay of the conference will be accessible within three hours from now.

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後提供。

Transcript will become available 24 hours from now.

成績單將在 24 小時後提供。

Again, I wish you a very happy new year.

再次祝你新年快樂。

Okay, thank you for joining us today.

好的，謝謝你今天加入我們。

We hope you will join us again next quarter.

我們希望您下個季度再次加入我們。

Good bye and have a good day.

再見，祝你有美好的一天。