台積電 ADR (TSM) 2019 Q1 法說會逐字稿

(foreign language) In English, the earthquake that just took place at 1:10 this afternoon has no impact to TSMC's fabs or the back-end packaging fab. So there's no impact. Thank you.

(外語)用英文來說，今天下午1點10分剛發生的地震，對台積電的晶圓廠或後端封裝廠沒有影響。所以沒有影響。謝謝。

Welcome to TSMC's First Quarter 2019 Earnings Conference and Conference Call. This is Elizabeth Sun, TSMC's Senior Director of Corporate Communications and your host for today.

歡迎參加台積電2019年第一季財報發表會及電話會議。我是台積電企業傳播資深總監伊莉莎白·孫，也是今天的主持人。

Today's event is webcast live through TSMC's website at www.tsmc.com. If you are joining us through the conference call, your dial-in lines are in listen-only mode. As this conference is being viewed by investors around the world, we will conduct the event in English only.

今天的活動透過台積電網站 www.tsmc.com 進行網路直播。如果您透過電話會議加入我們，您的撥入線路將處於只聽模式。由於此次會議將受到全球投資者的關注，因此我們將僅以英語進行此活動。

The format of today's event will be as follows. First, TSMC's Senior Vice President and CFO, Ms. Lora Ho, will summarize our operations in the first quarter 2019, followed by the guidance of the second quarter. Afterwards, Ms. Ho and TSMC's CEO, Dr. C.C. Wei, will jointly provide company'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我們2019年第一季的營運狀況，隨後對第二季進行展望。隨後，何女士與台積電執行長C.C.博士進行了會談。魏先生將共同提供公司的關鍵資訊。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 now from our website at www.tsmc.com. Please also download the summary slides in relation to today's conference presentations.

對於電話會議的參與者，如果您還沒有新聞稿的副本，您可以立即從我們的網站 www.tsmc.com 下載。請下載與今天的會議簡報相關的摘要投影片。

As usual, I would like to remind everyone 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. So 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。因此，請參閱我們新聞稿中的安全港通知。

And now I would like to turn the microphone to TSMC's CFO, Ms. Lora Ho, for the summary of operations and current quarter guidance.

現在，我想把麥克風交給台積電財務長何麗拉女士，請她總結營運情況並指導本季業績。

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

謝謝你，伊麗莎白。大家下午好，感謝大家今天的參與。我的演講將從第一季的財務亮點開始，然後是第二季的指導。

First quarter revenue decreased 24.5% quarter-over-quarter as our business was impacted by the overall global economic conditions, which dampened the end market demand, also customers' inventory corrections and high-end smartphone seasonality and the photoresist defect material incident.

第一季營收季減 24.5%，因為我們的業務受到全球整體經濟狀況的影響，抑制了終端市場需求，也受到客戶庫存調整和高階智慧型手機季節性以及光阻缺陷材料事件的影響。

Due to lower level of capacity utilization and the negative impact from a photoresist defect material incident, gross margin decreased 6.4 percentage points sequentially to 41.3%. Total operating expenses decreased by about TWD 4.8 billion and they represented 11.9% of total net revenue in the first quarter. So operating margin decreased by 7.6 percentage points sequentially to 29.4%. Overall, our first quarter EPS was $2.37 and ROE for the first quarter was 14.4%.

由於產能利用率較低以及光阻缺陷材料事件的負面影響，毛利率較上月下降6.4個百分點至41.3%。總營業費用減少約48億新台幣，佔第一季總營收的11.9%。因此營業利益率較上季下降7.6個百分點至29.4%。總體而言，我們的第一季每股收益為 2.37 美元，第一季的 ROE 為 14.4%。

Now let's take a look at revenue by technology. 7-nanometer technology accounted for 22% of wafer revenue in the first quarter, 10-nanometer was 4% and 16-nanometer was 16%. Advanced technologies, which we now define as 16-nanometer and below, accounted for 42% of wafer revenue.

現在讓我們來看看按技術劃分的收入。第一季度，7奈米技術佔晶圓收入的22%，10奈米佔4%，16奈米佔16%。先進技術（我們現在將其定義為 16 奈米及以下）佔晶圓收入的 42%。

Now let's take a look at revenue contribution by application. During the first quarter, Communication, Computer, Consumer and Industrial/Standard decreased 27%, 31%, 10% and 16%, respectively.

現在讓我們來看看應用程式的收入貢獻。第一季度，通訊、電腦、消費和工業/標準分別下降了27%、31%、10%和16%。

Now this is the last time we provide a revenue breakdown by application. From this quarter on, we will report revenue breakdown by platform as we believe this change will better represent the company's results.

這是我們最後一次提供按應用劃分的收入明細。從本季開始，我們將按平台報告收入明細，因為我們相信這項變更將更好地反映公司的業績。

Now let me explain how to read the table. The table shows the -- between the 4 application and 6 platforms how do they relate to each other. In general, within computer application, almost all revenue is from HPC. Within Communication, about 2/3 is from smartphone. HPC is about 1/5, and other platforms are single digit each. Consumer is mainly distributed between HPC and the digital consumer electronics, whereas Industrial/Standard spread across all platforms, with smartphone and HPC each representing about 30%.

現在讓我解釋一下如何解讀該表。此表顯示了 4 個應用程式和 6 個平台之間的相互關係。整體來說，在電腦應用領域，幾乎所有的收入都來自於HPC。在通訊領域，大約 2/3 來自智慧型手機。HPC大概佔1/5，其他平台均為個位數。消費級主要分佈在HPC和數位消費性電子產品之間，而工業/標準級則遍佈所有平台，智慧型手機和HPC各佔約30％。

Now let's take a look at revenue contribution by platform for the first quarter. Smartphone decreased 33% to accounted for 47% of our first quarter revenue. HPC decreased 26% to accounted for 29%, while IoT, automotive, digital, consumer electronics and others accounted for 5% to 7% each.

現在我們來看看第一季各平台的營收貢獻。智慧型手機銷售額下降 33%，占我們第一季營收的 47%。HPC下降26%至29%，物聯網、汽車、數位、消費性電子等各佔5%至7%。

Now I would like to move on to the balance sheet. We ended the first quarter with cash and marketable securities of TWD 760 billion, an increase of TWD 65 billion from the last quarter. On the liabilities side, current liabilities increased by TWD 38 billion. On financial ratios, accounts receivable turnover days increased 8 days to 49 days, as sales decreased faster than average accounts receivable. Days of inventory increased 12 days to 79 days, reflecting 7-nanometer wafer prebuild and an increase in raw wafers.

現在我想談談資產負債表。截至第一季末，我們的現金及有價證券總額為 7,600 億新台幣，較上一季增加 650 億新台幣。負債方面，流動負債增加380億新台幣。從財務比率來看，應收帳款週轉天數增加 8 天至 49 天，因為銷售額下降速度快於平均應收帳款下降速度。庫存天數增加 12 天至 79 天，反映了 7 奈米晶圓預製和原始晶圓的增加。

Now let me make a few comments on cash flow and CapEx. During the first quarter, we generated about TWD 153 billion cash from operations and spent TWD 76 billion in capital expenditures. As a result, we generated free cash flow of TWD 77 billion and our overall cash balance increased TWD 88 billion to reach TWD 646 billion at the end of the quarter. In U.S. dollar terms, our first quarter capital expenditure was $2.46 billion.

現在，讓我對現金流和資本支出發表一些評論。第一季度，我們從營運中產生了約 1,530 億新台幣的現金，並花費了 760 億新台幣的資本支出。結果，我們產生了 770 億新台幣的自由現金流，我們的整體現金餘額增加了 880 億新台幣，在本季末達到 6,460 億新台幣。以美元計算，我們第一季的資本支出為 24.6 億美元。

I have finished my financial summary. Now let me provide the second quarter guidance. Based on the current business outlook, we expect second quarter revenue to be between USD 7.55 billion and USD 7.65 billion, which is a 7.1% sequential increase at the midpoint. Based on exchange rate assumption of USD 1 to TWD 30.85, our first quarter gross margin is expected to be between 43% and 45%. Our first quarter operating margin is expected to be between 31% and 33%.

我已經完成了財務總結。現在讓我提供第二季的指導。根據目前的業務前景，我們預計第二季營收將在 75.5 億美元至 76.5 億美元之間，以中位數計算季增 7.1%。根據 1 美元兌 30.85 新台幣的匯率假設，我們第一季的毛利率預計在 43% 至 45% 之間。我們第一季的營業利潤率預計在31%至33%之間。

Also, in the second quarter, we will again need to accrue the 10% retained -- 10% tax on undistributed retained earnings. As a result, our second quarter tax rate will be about 18%. The tax rate will then fall back to 10% level in the third and fourth quarter and the full year tax rate will be about 12%.

此外，在第二季度，我們將再次需要累積 10% 的保留稅——未分配保留收益的 10% 稅。因此，我們第二季的稅率將在18％左右。第三、四季稅率將回落至10%水平，全年稅率將在12%左右。

This concludes my remark. Let me follow by making a few comments about the profitability, CapEx and cash dividend.

我的評論到此結束。接下來，我想對獲利能力、資本支出和現金股利發表一些評論。

First, let me talk about the profitability in the first and second quarter. Our first quarter gross margin declined by 6.4 percentage points sequentially as our 7-nanometer saw a substantial cutback in utilization in first quarter due to high-end smartphone seasonality, which impacted our gross margin by close to 4 percentage points. In addition, the photo material -- photoresist material incident impacted our gross margin by about 2.6 percentage points as we indicated in our press release in February.

首先講一下第一季、第二季的獲利情況。由於高階智慧型手機的季節性影響，我們的 7 奈米利用率在第一季大幅下降，導致我們的毛利率環比下降 6.4 個百分點，這影響了我們的毛利率近 4 個百分點。此外，正如我們在 2 月的新聞稿中所指出的，光阻材料事件對我們的毛利率影響了約 2.6 個百分點。

I have just guided the second quarter gross margin to improve by 2.7 percentage points sequentially at the midpoint. Since most of the wafer scrapped in first quarter due to the photoresist incident will be made up in second quarter, gross margin can improve by about 1.5 percentage points in this quarter. In addition, the 7-nanometer dilution in second quarter, as compared to fourth quarter '18, will be close to 3 percentage points, which is about 1 percentage point improvement from the first quarter in terms of dilution. And we also expect a slight improvement in other nodes' utilization rate.

我剛剛預測第二季毛利率將比中位數環比提高 2.7 個百分點。由於第一季因光阻事件而報廢的晶圓大部分將在第二季得到彌補，因此本季毛利率可提高約1.5個百分點。此外，與2018年第四季相比，第二季的7奈米稀釋度將接近3個百分點，比第一季的稀釋度改善了約1個百分點。我們也預計其他節點的利用率也會略有提高。

Our gross margin in first and second quarter are primarily impacted by a lower capacity utilization rate. As our business and utilization rate improves in the second half of this year, we believe about 50% is still a target for our gross margin going forward.

我們第一季和第二季的毛利率主要受到產能利用率較低的影響。隨著今年下半年業務和利用率的提高，我們相信50%左右仍然是我們未來毛利率的目標。

Now I will talk about the CapEx outlook. We reiterate our 2019 CapEx to be between USD 10 billion to USD 11 billion. About 80% of the CapEx budget will be allocated for advanced process technologies, including 7-nanometer, 5-nanometer and 3-nanometer. About 10% will be spent for advanced packaging and mask making, and about 10% will be spent for specialty technologies. As I have stated before, we see our CapEx forecast between USD 10 billion and USD 12 billion to support our average growth rate of 5% to 10% per annum in the next few years.

現在我將談談資本支出前景。我們重申 2019 年資本支出將在 100 億美元至 110 億美元之間。約 80% 的資本支出預算將分配給先進製程技術，包括 7 奈米、5 奈米和 3 奈米。約10%將用於先進封裝及光罩製造，約10%將用於特色技術。正如我之前所說，我們的資本支出預測在 100 億美元至 120 億美元之間，以支持未來幾年每年 5% 至 10% 的平均成長率。

My last comment is about the cash dividend distribution. In the future, TSMC intend to return about 70% of free cash flow to shareholder every year by distributing quarterly dividends. TSMC also remains committed to sustainable cash dividends on both an annual and quarterly basis.

我的最後一條評論是關於現金股利分配的。未來，台積電計畫每年以季度股利的方式，將約70%的自由現金流回饋股東。台積電也致力於每年和每季持續派發現金股息。

In June, TSMC will hold the annual shareholder meeting to approve the Board's proposed TWD 8 cash dividend per share for the full year of 2018. And the shareholder meeting will also approve the revision of the articles of incorporation to adopt quarterly dividends. Subject to the approval by the annual shareholder meeting, the Board plans to approve TWD 2 cash dividend per share for the first quarter 2019 and to be paid in the fourth quarter of 2019. Therefore, TSMC's shareholders will receive a total of TWD 10 per share cash dividend in 2019. That also means, in 2020, shareholders will receive at least TWD 10 per share cash dividend for the whole year.

台積電將於6月召開年度股東大會，透過董事會提出的2018年全年每股8新台幣現金股利方案。股東會也將批准修改公司章程，採用季度分紅制度。經年度股東大會批准，董事會計劃批准派發2019年第一季每股2新台幣現金股息，並於2019年第四季支付。因此，2019年台積電股東將獲得每股10新台幣的現金股利。這也意味著，2020年全年股東將獲得每股至少10元新台幣的現金股利。

That concludes my remark. Let me turn the podium to C.C.

我的評論到此結束。讓我把講台轉向 C.C.

Thank you, Lora. Good afternoon, ladies and gentlemen. Let me start with our near-term demand and inventory. We concluded our first quarter with revenue of TWD 280.7 billion or USD 7.1 billion, in line with our revised guidance. Our business in the first quarter was impacted by 3 factors: first, the overall global economic condition, which dampened the end market demand; second, customers are ongoing inventory adjustment; and third, the high-end mobile product seasonality. Meanwhile, the net effect from the photoresist defect material incident also impacted our first quarter revenue by about 3.5%.

謝謝你，洛拉。女士們、先生們，午安。讓我先從我們的近期需求和庫存開始。我們第一季的營收為 2,807 億新台幣（約 71 億美元），符合我們修訂後的預期。我們第一季的業務受到三個因素的影響：第一，全球整體經濟狀況，抑制了終端市場需求；第二，客戶正在進行庫存調整；第三，高階手機產品的季節性。同時，光阻缺陷材料事件的淨效應也對我們第一季的營收產生了約3.5%的影響。

Moving into second quarter this year. While the economical factor and mobile product seasonality still linger, we believe we may have passed the bottom of the cycle of our business as we are seeing customers' demand stabilizing.

今年進入第二季。儘管經濟因素和行動產品季節性仍然存在，但我們相信我們可能已經度過了業務週期的底部，因為我們看到客戶的需求趨於穩定。

Based upon customer indications for their business and wafer loading in second quarter, we also expect our customers' overall inventory to be substantially reduced and approach the seasonal level around the middle of this year.

根據客戶對其第二季業務和晶圓裝載情況的指示，我們也預期客戶的整體庫存將大幅減少，並在今年年中左右接近季節性水準。

In the second half of this year, TSMC's business will be supported by this healthier inventory base as well as strong demand from our industry-leading 7-nanometer technology, which supports high-end smartphone new product launches, initial 5G deployment and HPC-related applications. For the whole year of 2019, we forecast the overall semiconductor market excluding memory as well as foundry growth to both be flattish. For TSMC, we reiterate that we expect to grow slightly in 2019.

今年下半年，台積電的業務將受到更健康的庫存基礎以及我們業界領先的 7 奈米技術的強勁需求的支持，該技術支持高端智慧型手機新產品的發布、初始 5G 部署和 HPC 相關應用。對於 2019 年全年而言，我們預測不包括記憶體和代工業務的整體半導體市場成長都將持平。對於台積電，我們重申預計2019年將略有成長。

Now let me update the photoresist material incident. On February 15, in order to ensure quality of wafer delivery, TSMC announced it will scrap a large number of wafers as a result of a batch of bad photoresist material from a chemical supplier. This batch of photoresist contained a foreign polymer that created a desirable -- undesirable effect and resulted in yield deviation on 12- and 16-nanometer wafers at Fab 14B.

現在我來更新一下光阻材料事件的最新情況。2月15日，台積電宣布，為確保晶圓交付質量，因化學品供應商的光阻材料出現問題，將報廢大批晶圓。這批光阻中含有外來聚合物，產生了不良影響，導致 Fab 14B 的 12 奈米和 16 奈米晶圓的產量出現偏差。

We have since taken corrective actions to enhance our defenses and minimize future risk. Our actions including the following: improve TSMC's own in-house incoming material, conforming test and controls; upgrade control and methodology with all suppliers for incoming material quality certification; establish robust in-line and off-line monitoring process to prevent defect escape.

從那時起，我們採取了糾正措施，以增強防禦能力並最大限度地降低未來的風險。我們的行動包括：改善台積電自己的內部來料、符合性測試和控制；升級所有供應商的進料品質認證控制和方法；建立強大的線上和離線監控流程，防止缺陷逃逸。

Now I will talk about our N5 status. Our N5 technology development is well on track. N5 has entered risk production in first quarter, and we expect customer tape-outs starting this quarter and volume production ramp in first half of 2020. With 1.8X logic density and 15% speed gain and an ARM A72 core compared with 7-nanometer, we believe our N5 technology is the most competitive in the industry. With the best density, performance, power and the best transistor technology, we expect most of our customers who are using 7-nanometer today will adopt 5-nanometer. With N5, we are expanding our customer product portfolio and increasing our addressable market. Thus, we are confident that 5-nanometer will also be a large and long-lasting node for TSMC.

現在我來談談我們的N5狀況。我們的N5技術開發進展順利。N5 已於第一季進入風險生產階段，我們預計客戶將於本季開始流片，並於 2020 年上半年實現量產。與 7 奈米相比，邏輯密度提高了 1.8 倍，速度提高了 15%，並且配備了 ARM A72 內核，我們相信我們的 N5 技術是業內最具競爭力的。憑藉最佳的密度、性能、功率和最佳的電晶體技術，我們預計目前使用 7 奈米的大多數客戶將採用 5 奈米。借助 N5，我們正在擴大客戶產品組合併增加我們的潛在市場。因此，我們有信心5奈米對於台積電來說也將是一個重大且持久的節點。

Now I'll talk about the ramp up of N7 and N7+ and introduction of N6. We are seeing strong tape-out activities at N7, which include HPC, IoT and automotive. Meanwhile, our N7+, which adopts EUV for a few critical layers, has already started volume production now. The yield rate is comparable to N7. We reaffirm N7 and N7+ will contribute more than 25% of our wafer revenue in year 2019.

現在我將討論 N7 和 N7+ 的提升以及 N6 的推出。我們看到 N7 的流片活動非常強勁，其中包括 HPC、物聯網和汽車。同時，我們的 N7+ 在幾個關鍵層採用了 EUV 技術，目前已開始量產。良品率與N7相當。我們重申，N7 和 N7+ 將在 2019 年貢獻我們晶圓收入的 25% 以上。

As we continue to improve our 7-nanometer technology and by leveraging the EUV learning from N7+, we now introduce N6 process. N6 has 3 major advantages. First, N6 have 100% compatible design rules with N7, which allow customer to directly migrate from N7-based design, which substantially shortened time-to-market. Second, N6 can deliver 18% higher logical density as compared to N7 and provide customer with a highly competitive performance-to-cost advantage. Third, N6 will offer shortened cycle time and better defect density. Risk production of N6 is scheduled to begin in first quarter year 2020 with volume production starting before the end of 2020.

隨著我們不斷改進 7 奈米技術，並利用從 N7+ 學到的 EUV，我們現在推出了 N6 製程。N6有3大優勢。首先，N6 與 N7 具有 100% 相容的設計規則，這使得客戶可以直接從基於 N7 的設計遷移，從而大大縮短了產品上市時間。其次，N6 可提供比 N7 高 18% 的邏輯密度，並為客戶提供極具競爭力的效能成本優勢。第三，N6 將提供更短的週期時間和更好的缺陷密度。N6 的風險生產計劃於 2020 年第一季開始，並於 2020 年底前開始大量生產。

Now let me talk about our advanced packaging technology. TSMC's advanced packaging strategy focuses on providing advanced wafer level system integration technologies to meet customers' product needs. Currently, we have offered InFO and CoWoS for several generation and recently introduced SoIC. We believe heterogeneous integration on a packaging level has become a clear trend for many applications. All our advanced packaging platforms enable efficient system level integration, and will continue to do so.

現在我來談談我們的先進封裝技術。台積電先進封裝策略專注於提供先進的晶圓級系統整合技術，以滿足客戶的產品需求。目前，我們已經提供了幾代的 InFO 和 CoWoS，並且最近推出了 SoIC。我們相信，封裝層級的異質整合已經成為許多應用的明顯趨勢。我們所有先進的封裝平台都能夠實現高效的系統級集成，並將繼續這樣做。

Our fourth generation InFO solutions provide finer interconnected line width and spacing to enable both mobile and HPC products.

我們的第四代 InFO 解決方案提供更精細的互連線寬和間距，以支援行動和 HPC 產品。

CoWoS continue to see good growth momentum in demand from HPC and the AI applications as we continue to expand beyond the reticle size. We are also working with a few leading customer on SoIC, which is an industry-leading 3D-IC packaging solution. We target to start production in 2021 time frame.

隨著我們不斷擴展標線尺寸，CoWoS 繼續看到 HPC 和 AI 應用需求的良好成長勢頭。我們還與一些領先的客戶合作開發 SoIC，這是業界領先的 3D-IC 封裝解決方案。我們的目標是在 2021 年開始生產。

The traction of our advanced packaging solution has been strong in mobile and HPC segment and we have seen inquiry from automotive segment as well. We therefore believe our advanced packaging solutions will contribute to our business growth for years to come.

我們的先進封裝解決方案在行動和 HPC 領域一直很受歡迎，我們也看到了來自汽車領域的詢問。因此，我們相信，我們先進的封裝解決方案將在未來幾年促進我們的業務成長。

Finally, I will talk about the HPC as our most important growth driver in the next 5 years. CPU, AI accelerator and networking will be the main growth area for our HPC platform. With the successful ramp of N7, N7+ and the upcoming N6 and N5, we are able to expand our customer product portfolio and increase our addressable market to support applications, such as data center, PC and tablets. Meanwhile, we also see networking growing thanks to 5G infrastructure deployment over the next few years. We are truly excited about our growth opportunities in HPC.

最後，我想談談 HPC 作為我們未來 5 年最重要的成長動力。CPU、AI加速器和網路將成為我們HPC平台的主要成長領域。隨著 N7、N7+ 以及即將推出的 N6 和 N5 的成功推出，我們能夠擴展客戶產品組合併增加可尋址市場以支援資料中心、PC 和平板電腦等應用。同時，我們也看到，隨著未來幾年 5G 基礎設施的部署，網路也將持續成長。我們對 HPC 領域的成長機會感到非常興奮。

Thank you for your attention.

感謝您的關注。

All right. This concludes our prepared statements. (Operator Instructions)

好的。我們的準備聲明到此結束。（操作員指示）

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

第一個問題來自花旗集團的 Roland Shu。

First question. As C.C. said, you maintain your view for the whole year revenue to grow slightly. So that means according to your first quarter revenue, second quarter guidance means that second half is going to grow very fast. So can you just let us know what kind of applications are driving so strong second half to TSMC this year?

第一個問題。正如 C.C.表示，您維持全年收入將小幅增長的觀點。所以這意味著根據第一季的收入，第二季的預測意味著下半年將會快速成長。那麼，您能否告訴我們，是哪些應用程式推動了台積電今年下半年的強勁表現？

The strong demand I just mentioned from 7-nanometer actually including the mobile platform, HPC platform and IoT, with a little bit flattish over automotive, but that's all that what we rely on. Actually, we will say that seasonality of the mobile phone, the new product launch that makes the major contribution.

我剛才提到的 7 奈米的強勁需求實際上包括行動平台、HPC 平台和物聯網，而汽車領域的需求略顯平緩，但這就是我們所依賴的。實際上，我們會說手機的季節性、新產品的發布做出了重大貢獻。

Yes. And I just through this calculation. I think for second half, your revenue actually is going to grow year by year in, maybe, mid-single digit year-on-year. So I think, except for this seasonality, do you gain share or do you have more new applications in second half?

是的。而我剛才經過這樣的計算。我認為下半年，你們的收入其實會逐年成長，或許年增個位數中段。所以我認為，除了季節性因素之外，你們的市佔率是否會增加，或者下半年你們是否會有更多新的應用？

We actually gained some shares because of 7-nanometer. And for the new product portfolio, that will be probably you will see the effect in 2020, not much in this year.

事實上，由於 7 奈米，我們獲得了一些份額。對於新的產品組合，您可能要到 2020 年才會看到效果，今年不會有太大影響。

Okay. Yes, and also for the second half gross margin, Lora said with this higher utilization and also with the less dilution from 7-nanometer. So is that your long-term gross margin will be -- target will be 50%. So is this means that for second half or just for the long term?

好的。是的，對於下半年的毛利率，Lora 表示，利用率更高，而且 7 奈米的稀釋度也更低。那麼您的長期毛利率目標將是 50%。那麼這意味著下半年還是只是長期？

Both.

兩個都。

Okay. My second question is, C.C., last quarter, you said that now we are at the market with the widest addressable market driven by HPC and CPU. And C.C. also said that HPC is going to be our most important growth driver. So can you quantify how big foundry addressable market will be driven by HPC and CPU, respectively?

好的。我的第二個問題是，C.C.，上個季度，您說現在我們處於由 HPC 和 CPU 驅動的最廣泛的可尋址市場。還有 C.C.也表示HPC將成為我們最重要的成長動力。那麼，您能否量化 HPC 和 CPU 將分別推動多大的代工目標市場？

I don't think I have enough data to tell you that how much we can quantify the percentage. But I believe the HPC platform will grow double digit excluding the cryptocurrency, of course.

我認為我沒有足夠的數據來告訴你我們可以量化多少百分比。但我相信 HPC 平台將達到兩位數成長（當然不包括加密貨幣）。

How about the CPU?

CPU 怎麼樣？

Too specific.

太具體了。

Okay. And I think, lastly.

好的。最後我想說的是。

Roland, you have more than 2.

羅蘭，你有超過 2 個。

This is a follow-up for the second question. Yes. So do you have any competition on this CPU foundry also?

這是第二個問題的後續回答。是的。那麼，這家 CPU 代工廠也面臨競爭對手嗎？

Again, I don't want to be too more specific on the CPU area, all right, Roland?

再說一次，我不想在 CPU 領域說得太具體，好嗎，羅蘭？

Next. The question will be coming from JPMorgan's Gokul.

下一個。這個問題將由摩根大通的 Gokul 提出。

So my first question is on 5-nanometer. I think in the last conference call, C.C., you mentioned that TSMC will be initially building a few percentage points or some lower capacity on 5-nanometer in 2020 compared to 7-nanometer. Now that you have more visibility into your customers' plans, could you let us know what does that mean? Is that 30% lower, 10% lower? What does it mean? And why is that? Is it because customer is a little bit hesitant to go to 5-nanometer and has other options? Or you just believe that, like you previously mentioned, the only reason is that high-end smartphone demand expectation, you're taking a more cautious view on that? That's my first question.

我的第一個問題是關於 5 奈米的。C.C.，我記得在上次電話會議中您提到，與 7 奈米相比，台積電將在 2020 年初步建設 5 奈米產能，但建設速度會慢幾個百分點或略低一些。現在您對客戶的計劃有了更多的了解，您能告訴我們這意味著什麼嗎？是低 30% 還是低 10%？這是什麼意思？這是為什麼呢？是因為客戶對於採用 5 奈米有些猶豫並且還有其他選擇？或者您只是認為，就像您之前提到的那樣，唯一的原因是對高階智慧型手機需求的預期，您對此持更謹慎的看法？這是我的第一個問題。

Actually, Gokul, I like your last sentence, you say that's more cautiously. Let me repeat again that we say N5's initial ramp, it might be slower than the N7. First, we learned a lesson from the N7's wafer loading. Look at this year, so first quarter and second quarter right now, it's actually very low so we learned a lesson. So we are working with the customer to be more cautiously and effectively manage the capacity ramping, so that's what I said that it will be a little bit slow. But that being said, the N5's business, I want to reassure everybody that N5 as a business will grow bigger than N7 because our expanding the product portfolio, and you know what I mean. In the HPC, we have very good opportunities and on the smartphone we are gaining market share. So I will believe that N5 initial ramp probably a little bit more cautiously slower than the N7, but it will pick up quickly.

實際上，Gokul，我喜歡你的最後一句話，你說得更謹慎。我再重複一遍，我們說的是 N5 的初始坡道，它可能比 N7 慢。首先，我們從N7的晶圓裝載中得到了教訓。看看今年，目前第一季和第二季的數據實際上非常低，所以我們學到了教訓。因此，我們正在與客戶合作，更加謹慎、有效地管理產能提升，這就是我所說的速度會有點慢。但話雖如此，對於 N5 的業務，我想向大家保證，N5 的業務將比 N7 更大，因為我們正在擴大產品組合，你們明白我的意思。在高效能運算領域，我們擁有非常好的機會，在智慧型手機領域，我們的市場佔有率也不斷擴大。因此，我相信 N5 的初始成長速度可能比 N7 稍微慢一些，但很快就會回升。

Okay. Got it. My second question is on the technology leadership. I think TSMC clearly now seems to be ahead of even IDMs in terms of technology leadership. How should we think about how that translates in a financial basis? What we've seen in semiconductor industry in the last several years is when one player becomes the dominant player, typically, margins go up. How should we think about this? What is TSMC's philosophy in terms of utilizing this technology leadership? Are we looking for higher than market revenue growth or we should expect structurally higher margins in the future years now that we are kind of getting through the smartphone saturation period and getting into HPC?

好的。知道了。我的第二個問題是關於技術領導力。我認為台積電在技術領先方面顯然已經領先 IDM。我們該如何思考這在財務基礎上如何體現？過去幾年我們在半導體產業看到的是，當一個參與者成為主導者時，利潤率通常會上升。我們該如何看待這個問題？台積電在利用這項技術領先地位的理念是什麼？既然我們已經度過了智慧型手機飽和期並進入了高效能運算領域，我們是否應該期待高於市場的收入成長，或者我們應該在未來幾年內預期結構性更高的利潤率？

As you pointed out, we have technology leadership and supposed -- and we are working on it also. Actually, we want to grow the market share. We want to do a bigger business with a higher profitability. I don't have enough data in my hand to give you order analysis in the future years, but we are working on it. And that the goal we are working on, actually, higher profitability and gain market share.

正如您所指出的，我們擁有技術領先地位，而且我們也正在為此努力。實際上，我們希望擴大市場佔有率。我們希望做大生意，獲得更高的獲利。我手頭上沒有足夠的數據來為您提供未來幾年的訂單分析，但我們正在努力。我們努力的目標實際上是提高獲利能力和擴大市場份額。

So just one sub question there. I think if we observe the last couple of years, TSMC -- foundry industry has not outgrown semis, ex memory. And TSMC also has not grown much faster than the foundry industry, which was not the case in the past. In the past foundry was growing much faster than semis, and TSMC was growing much faster than semis -- foundries. So when do we expect that gap to open up between TSMC's growth and foundry growth and potentially foundry growth and semis growth itself?

因此這裡只有一個子問題。我認為，如果我們觀察過去幾年，台積電——代工產業的發展還沒有超越半導體產業，例如記憶體產業。而且台積電的成長速度也沒有比代工產業快多少，過去的情況並非如此。過去，代工廠的成長速度比半導體產業快得多，而台積電的成長速度也比半導體代工廠快得多。那麼，我們預期台積電的成長與代工成長以及潛在的代工成長與半導體成長之間的差距何時會縮小？

You are asking more and more specific on the schedule. I would -- I would expect that starting from the second half of this year and extended to the next few years, we will start to widen the gap. Did that answer your question?

您詢問的時間表越來越具體。我預計，從今年下半年開始並延續到未來幾年，我們的差距將開始擴大。這回答了你的問題嗎？

That's specific enough.

這已經夠具體了。

Next question will be coming from UBS, Bill Lu.

下一個問題來自瑞銀的 Bill Lu。

So in the last couple of months, I've had a chance to visit a few fabless customers and I feel like the feedback that I'm getting is that, maybe previously, there was more concerns about EUV feasibility. That is now mostly going away or maybe it's less. But on the flip side, I hear maybe a bit more concerned about cost per transistor for 5-nanometers. I'm wondering if you agree with that and what can be done about that.

因此，在過去的幾個月裡，我有機會拜訪了一些無晶圓廠客戶，我覺得我得到的回饋是，也許以前人們對 EUV 的可行性更加擔憂。現在這種情況基本上已經消失，或者可能已經減少了。但另一方面，我聽說人們可能對 5 奈米每個電晶體的成本更加擔心。我想知道您是否同意這一點以及可以採取什麼措施。

Well, that's a good question. We did some calculation by ourselves. We still think that cost per transistor is still decreasing, but not as fast as it used to be. That's one thing. As you mentioned about the EUV, today, we put the EUV into mass production already, and we learned some kind of experience so that we can introduce N6. But is EUV productivity very good already? Not yet. We expect it to continue to improve every year, just as we did for the immersion photolithography. So we expect in the future that EUV will offer a best tool in terms of cost, in terms of technologies moving forward, but not today yet. There's still a lot of process complexity, so we're using the EUV to replace some of the very critical layers and the cost probably are equal today. And in the future, we hope it will improve. Once it improves, the cost per transistor will decrease faster.

嗯，這是個好問題。我們自己做了一些計算。我們仍然認為每個電晶體的成本仍在下降，但速度不如以前那麼快。這是一回事。正如您所提到的 EUV，今天，我們已經將 EUV 投入了大規模生產，我們累積了一些經驗，因此我們可以推出 N6。但EUV的生產效率已經很好了嗎？還沒有。我們預計它每年都會不斷改進，就像我們對浸沒式微影技術所做的那樣。因此，我們預計未來 EUV 將在成本方面、在技術進步方面提供最佳工具，但目前還不是。由於製程仍然很複雜，所以我們使用 EUV 來替換一些非常關鍵的層，目前的成本可能保持不變。我們希望未來它會有所改善。一旦改進，每個電晶體的成本就會下降得更快。

Is there a timing for that?

有時間安排嗎？

No. But as fast as possible.

不。但要盡可能快。

Sorry. Second question is just a clarification. I think, previously, Dr. Wei said that HPC ex crypto grows double digits. Is that for this year or is that longer term?

對不起。第二個問題只是一個澄清。我認為，之前魏博士說過，加密之外的 HPC 會以兩位數的速度成長。這是針對今年的計劃還是長期的計劃？

For this year, it's close. For longer term, that's what I mean, for longer term.

就今年而言，已經很接近了。從長遠來看，這就是我的意思，從長遠來看。

Yes. Really appreciate the breakout by platform. Can you help me with this year's growth, maybe just for smartphone versus HPC?

是的。真的很感謝平台的突破。您能幫我了解今年的成長情況嗎，也許只是智慧型手機與 HPC 的成長情況？

Both are probably in the mid-single digit, somewhere around that.

兩者可能都處於個位數中間值左右。

Okay. So HPC is close to that (inaudible).

好的。因此 HPC 接近這個水平（聽不清楚）。

Yes.

是的。

Without crypto, mid-single digit including crypto?

沒有加密，包括加密在內的中個位數？

No. HPC without the cryptocurrency, it will be somewhere mid-single digit. With the cryptocurrency, it's dragged down.

不。如果沒有加密貨幣，高效能運算 (HPC) 將會處於個位數的中間值。隨著加密貨幣的出現，它被拖累了。

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

下一個問題來自摩根士丹利的 Charlie Chan。

First of all, just want to follow up that HPC segment. Because just compare the notes, last quarter, we said HPC excluding crypto upsizing right? Including crypto, down more than 10%. So it seems like the number seems to be a little bit better. Is that the right comment about HPC market doing better than expected?

首先，我只想跟進 HPC 部分。因為只是比較一下筆記，上個季度，我們說 HPC 不包括加密升級，對嗎？包括加密貨幣在內，跌幅超過 10%。所以看起來這個數字似乎好一點。這是關於 HPC 市場表現優於預期的正確評論嗎？

Yes. It's doing better because of one of the factors or one of the components in HPC is networking. And you know that 5G's deployment, so that helped the growth of the networking quickly.

是的。它之所以表現更好，是因為 HPC 中的一個因素或組件是網路。而且你知道 5G 的部署有助於網路的快速發展。

Okay. Yes, so I think this is related to my second question, right? I think a lot of shareholders are saying that some big customers in smartphone and the base station segment is building up inventory for whatever reason, share gain or semiconductor strategic inventory. But you mentioned -- you also said that you believe the inventory level will be back to normal around the midyear. So my question is do you worry about this kind of overbuild of inventory and how are you going to manage that kind of risk?

好的。是的，所以我認為這與我的第二個問題有關，對嗎？我認為很多股東都在說，智慧型手機和基地台領域的一些大客戶正在增加庫存，無論出於什麼原因，例如市場份額增加或半導體策略庫存。但您提到—您也說過，您相信庫存水準將在年中左右恢復正常。所以我的問題是，您是否擔心這種庫存過剩以及您將如何管理這種風險？

We don't specifically comment on one customer's particular business behavior, but then we share with you why we say that the inventory will be greatly reduced and be close to the seasonal level around the middle of this year. We actually looked at our history in the second quarter, the customers' growth rate, and we're using that number and look at the customers' demand number given to us in the second quarter. And we do some calculation and we come to a conclusion that they are digesting their inventory quickly. So that's how we say that in the second quarter, they are not building the inventory. They are actually -- they are reducing the inventory quickly. And that's why we come to the conclusion that in the second half, we will have a healthier inventory base.

我們不會針對某個客戶的具體經營行為進行具體的評論，但是我們會跟大家分享為什麼我們說庫存會大幅減少，到今年年中左右會接近季節性水平。我們實際上回顧了第二季度的歷史記錄，即客戶的成長率，並且我們正在使用這個數字來查看第二季度客戶給我們的需求數字。我們進行了一些計算，得出的結論是，他們正在快速消化庫存。所以我們說，第二季他們沒有建立庫存。他們實際上正在迅速減少庫存。這就是為什麼我們得出結論：下半年我們的庫存基礎將更加健康。

Okay. Yes, maybe a quick question to Lora on cash dividend. So you -- so this year, I think the quarterly run rate is like $2 per quarter, right, but the annual dividend payout is actually $10 in total, right. So for next year, what will be the kind of minimum dividend payout? To use $2 run rate so we get like $8 for full year for 2020, is that the guidance?

好的。是的，也許可以向 Lora 詢問一個關於現金股息的快速問題。所以你——所以今年，我認為季度運行率是每季度 2 美元，對吧，但年度股息支付總額實際上為 10 美元，對吧。那麼明年的最低股利支付金額是多少呢？使用 2 美元的運行率，那麼 2020 年全年我們可以獲得 8 美元，這是指導嗎？

This year, actually, is a transition year, so we issue twice of cash dividend. First, $8, followed by the $2 on quarterly basis. Starting from first quarter next year, we will only have quarterly dividends, and we want to have a sustainable on quarterly dividend and on annual both. So we will likely see more stable dividend on quarterly basis as well. So since I said, the dividend will be no less than $10, and we want to be stable on quarterly basis. So you can assume or expect we will issue $2.50 on quarterly basis at least.

今年其實是個過渡年，所以我們發了兩次現金分紅。首先是 8 美元，然後每季增加 2 美元。從明年第一季開始，我們將只派發季度股息，我們希望季度股息和年度股息都能夠持續下去。因此，我們也可能會看到季度股息更加穩定。所以正如我所說，股息將不會低於 10 美元，而且我們希望按季度保持穩定。因此，您可以假設或預期我們至少每季發行 2.50 美元。

All right. Next question will be coming from Credit Suisse, Randy Abrams.

好的。下一個問題來自瑞士信貸的蘭迪·艾布拉姆斯 (Randy Abrams)。

I want to ask a follow-up. It was a good disclosure moving to the new platform segmentation. Could you talk about sequential pickup? How you see the different 4 platforms? How they're sequentially improving from this low level. And then for full year, since we've got the first pieces also the IoT and automotive, what your views on the other segments for the full year?

我想問一個後續問題。轉向新的平台細分是一個很好的披露。能談談順序拾取嗎？您如何看待這四個不同的平台？他們是如何從這個低水準逐步進步的。那麼對於全年而言，由於我們已經獲得了物聯網和汽車領域的第一批產品，您對全年其他領域的看法是什麼？

I will first comment on the second quarter on a sequential basis by platform and followed by the full year picture. Is that what you're asking, Randy? Okay. For second quarter, we are expecting smartphone to grow single digit. HPC grow double digit, and IoT, automotive and others will grow single-digit, and the digital consumer electronic will slightly decline. That's for second quarter. For the whole year, we expect smartphone will grow high-single digit. HPC excluding crypto will grow high-single digit as well. And IoT will grow double digit, automotive will decline single digit, and digital still cameras and others will decline single digit. That's the overall picture for this year.

我將首先按平台連續評論第二季度的情況，然後再評論全年的情況。這就是你要問的嗎，蘭迪？好的。對於第二季度，我們預計智慧型手機將成長個位數。HPC將維持兩位數成長，IoT、汽車等將維持個位數成長，數位消費電子將略有下降。這是第二季的情況。就全年而言，我們預計智慧型手機將實現高個位數成長。不包括加密的 HPC 也將實現高個位數成長。其中物聯網將呈現兩位數成長，汽車將呈現個位數下降，數位相機和其他設備也將呈現個位數下降。這就是今年的整體情況。

Okay. Great. Appreciate that. And then follow-up on the migration for these derivatives, 7-plus and 6 nanometer. It seems to date, the adoption has been rather slow for this year. If you could talk maybe about factors why a lot of customers are staying on 7 for now. And as the node matures, if you could talk about the pace? How you see customer see a percent of the node or how meaningful next 1 or 2 years for those derivative process?

好的。偉大的。非常感謝。然後跟進這些衍生物、7 奈米以上和 6 奈米的遷移。到目前為止，今年的採用速度似乎相當緩慢。您能否談談為什麼許多顧客目前仍選擇使用 7 的原因？隨著節點的成熟，您能談談其步伐嗎？您如何看待客戶對節點百分比的看法，或者這些衍生流程在未來 1 到 2 年內有何意義？

As I said, we have a very high tape-out activity for N7 for this year. Actually, a lot of customer from the four platforms, and mostly is from the HPC area, they are all designing their product with N7. A few of them adopted N7+. But then that's why we introduced our N6 that can be 100% compatible to the N7. So I'll give you a taste of that probably starting year 2020. Most of the customers in the N7 will move to N6. And from that day on probably, the N6 will pick up all the momentum and pick up all the volume production.

正如我所說，我們今年的 N7 流片活動非常活躍。實際上，這四個平台的許多客戶，大部分來自 HPC 領域，他們都在使用 N7 設計他們的產品。其中少數採用了N7+。但這就是我們推出與 N7 100% 相容的 N6 的原因。因此，我大概會在 2020 年開始讓您體驗一下。N7 的大部分客戶將轉移到 N6。大概從那天起，N6 將會獲得所有發展動能並獲得全部量產。

Okay. Great. If I can ask a follow-up to, given the strength on these derivatives, 6-nanometer, 5 and optimism, do you have any different view on 28 about -- if any of this equipment could be migrated to these advanced nodes? Or do you think it will be all new capacity?

好的。偉大的。如果我可以問一個後續問題，鑑於這些衍生品、6 奈米、5 奈米和樂觀情緒的強勁表現，您對 28 有什麼不同的看法嗎——這些設備是否可以遷移到這些先進節點？還是您認為這將會是全部新增產能？

From node to node, we have about 90% of the common tool or bigger than 90% of the percentage of the common tool being used for the next node. So you bet that some of the tools from 28-nanometer can be used for 7 or for 5, okay? But of course, it's less and less. But to -- for the overcapacity in the 28-nanometer because of some of the non-market-driven capacity increase, our strategy is to develop some of derivative technology like a 22-nanometer and so that we can ensure that we still have a very healthy loading in the future.

從一個節點到另一個節點，我們有大約 90% 的通用工具，或有大於 90% 的通用工具百分比被用於下一個節點。所以你敢打賭，28 奈米的一些工具可以用於 7 或 5，好嗎？但當然，這種情況越來越少了。但是，由於一些非市場驅動的產能成長導致 28 奈米產能過剩，我們的策略是開發一些衍生技術，例如 22 奈米，這樣我們就可以確保未來仍然擁有非常健康的負荷。

Next question will be coming from Daiwa's Rick Hsu.

下一個問題來自 Daiwa 的 Rick Hsu。

(foreign language) This is Rick from Daiwa. So I think the first question is about the follow-up on the N6. My question is would you worry whether the N6 will cannibalize N5 development because this node looks pretty close.

（外語）我是大和的里克。所以我認為第一個問題是關於 N6 的後續發展。我的問題是，您是否擔心 N6 是否會蠶食 N5 的發展，因為這個節點看起來非常接近。

The number N6 and N5 looks pretty close, but actually the performance are -- they still have a big gap. N5 compared with N7, actually, the logic density increased by 80%, 8-0. N6 compared with N7 is only 18. So you can see there's a big difference in that logic density and transistor performance also. And so as a result, the total power consumption in the chip is lower in the N5. And also that -- there's a lot of benefit if you move into N5. But nevertheless, N5 is one of the node, full node, and it takes time for the customer to design their new products. The beauty of the N6 is if they already design in N7, they spend a very minimal effort. They can move into the N6 and gain some benefit. And so some of the customers, depending on their product's characteristics and their market, they will decide which one go to N6, which one go to N5.

N6和N5的數字看起來很接近，但實際上表現上——它們仍然有很大的差距。N5相比N7，實際上邏輯密度提高了80%，8-0。N6與N7相比僅差18個。因此您可以看到邏輯密度和電晶體性能也存在很大差異。因此，N5 晶片的總功耗較低。而且——如果你進入 N5 將會有很多好處。但儘管如此，N5 只是一個節點，一個完整節點，客戶需要時間來設計他們的新產品。N6 的優點在於，如果他們已經在 N7 中進行設計，那麼他們只需花費很少的精力。他們可以進入 N6 並獲得一些好處。因此，有些客戶會根據其產品特性和市場來決定哪一個選擇 N6，哪一個選擇 N5。

Can I have one quick follow-up to the first question before I ask the second one? Just a quick follow-up. Can you share the number of critical layers that will be built by EUV for -- I know for 7+, you -- I think last year, you mentioned just a few layers, critical layer for EUV. What about N6 and N5?

在問第二個問題之前，我可以快速跟進第一個問題嗎？只是一個快速的跟進。您能否分享 EUV 將建造的關鍵層的數量 - 我知道 7+，您 - 我想去年您只提到了幾層，即 EUV 的關鍵層。N6 和 N5 怎麼樣？

Okay. N6 has few critical layers plus 1. Okay. That gives you a hint. N5 plus many, so...

好的。N6 有幾個關鍵層加上 1。好的。這給了你一個提示。N5 加起來還有很多，所以...

Okay. That's very clear. And my second question is you look at your end first quarter inventory days, 79. If I don't remember wrong, I think this is probably kind of an all-time high in the history. Majority of this inventory were finished wafers or can you share some idea -- and also, can you elaborate a little bit more what's the rationale behind that 79 days?

好的。這非常清楚。我的第二個問題是，您看一下第一季末的庫存天數，是 79 天。如果我沒記錯的話，我認為這可能是史上最高的紀錄。這些庫存大部分都是成品晶圓，或者您能否分享一些想法——另外，您能否詳細說明一下這 79 天背後的理由是什麼？

Yes. Okay. Rick, 79 is really high, but there's a good reason for that. Because we anticipated 7-nanometer capacity will be very tight in the second half. Well, it's not so tight. It's very empty in the first half. So we're trying to prebuild some of the inventory for our customer in work in process. So they will not be constrained by our second half capacity. So by doing so, that work in in process value will certainly go up, right? So when we move in the second half, when we digest those inventory and demand start to pick up, our days of inventory will come down in the second half.

是的。好的。瑞克，79 歲確實很高，但這是有原因的。因為我們預計下半年7奈米產能會非常緊張。嗯，沒那麼緊。前半部很空虛。因此，我們正在嘗試為客戶預先建立一些在製品庫存。所以他們不會受到我們下半年產能的限制。那麼這樣做的話，在製品的價值一定會上升，對嗎？因此，當我們進入下半年，當我們消化這些庫存並且需求開始回升時，我們的庫存天數將在下半年下降。

Next question will be coming from Bruce Lu, who is now with Goldman Sachs.

下一個問題來自高盛現任總裁 Bruce Lu。

My first question is still going back to the smartphone. Management mentioned that the smartphone growth is going to be high single digit. This is substantially stronger than the smartphone shipment growth. And management also guided previously that the next couple of years, smartphone growth will be mid-single digit. Again, it's also higher than the smartphone shipment growth in our view. So where is the growth coming from? Is it mainly driven by the content growth or share gain either by your customer or yourselves share gain? And can we somehow quantify that a little bit?

我的第一個問題還是回到智慧型手機。管理層提到，智慧型手機的成長將達到高個位數。這比智慧型手機出貨量的成長要強勁得多。管理層先前也曾預測，未來幾年智慧型手機的成長率將達到中等個位數。我們認為，這也高於智慧型手機出貨量的成長。那麼成長從何而來？它主要是由內容成長或份額成長（無論是您的客戶還是您自己的份額成長）推動的嗎？我們能以某種方式稍微量化一下嗎？

Quantify, I probably cannot. But the answer to your question is both. We gain the market share and the content increase quite a lot.

量化，我可能做不到。但你的問題的答案是兩者皆有。我們的市佔率增加了不少，內容也增加了不少。

Can we know like which one is stronger?

我們能知道哪一個更強大嗎？

You got me. I want both of them to be as high as possible, but I don't have a calculation. Because of the market share gain, we have to be very careful into doing the calculation. And also the content increase. Let me say that content increase in the 5G area or in the AI area, every customer are different. So they put a different functionality inside. And we don't have a very good detail or detail insight to give you exactly a number to quantify what is the percentage per se.

你抓住我了。我希望它們兩個都盡可能高，但我沒有計算。由於市場份額的增長，我們必須非常小心地進行計算。而且內容也增加了。我想說的是，5G領域或AI領域的內容增加，每個客戶都是不同的。所以他們在裡面加入了不同的功能。而且我們沒有很好的細節或詳細的洞察力來給你一個確切的數字來量化百分比本身。

I see. The reason I tried to dig down a bit further is that if the content growth which means that, that will be at expense of the smartphone cost structure. So you have higher content growth, which means that semi content in terms of cost structure is higher, which at the end of the day will dampen the smartphone shipment as price elastic. So how do you -- we've foreseen very, very strong content growth, which means that the cost structure for your customer will be much higher at the end of the day. So there will be certain trade-off at the end of the day.

我懂了。我之所以嘗試進一步深入研究，是因為如果內容成長意味著以犧牲智慧型手機成本結構為代價。因此，內容成長率更高，這意味著成本結構的半內容更高，最終會抑制智慧型手機的出貨量，因為價格具有彈性。那麼你如何——我們已經預見到非常非常強勁的內容成長，這意味著最終你的客戶的成本結構將會高得多。所以最終還是會有一定的權衡。

There will be certain trade-off of the high-end smartphones pricing and their cost, of course. But for TSMC, our job is to fully support customers' need. When they need this functionality, they need this kind of speed, we support it. Whether that will increase their pricing or the smartphones end market strategy, that's not really our concern. We support it all the way.

當然，高階智慧型手機的定價和成本之間會有一定的權衡。但對於台積電來說，我們的工作是全力支持客戶的需求。當他們需要這種功能、需要這種速度時，我們會支持它。這是否會提高他們的定價或智慧型手機終端市場策略，這並不是我們真正關心的。我們全力支持。

Okay. My second question is more for Lora. So can you somehow help us to quantify the margin impact in 2020 as we can expect like very high -- very quick ramp-up for the 5-nanometer, which naturally, in the first year, there will be the negative margin impact. And we will come into the third year of 7-nanometer, so the margin negative impact should be less, but you have new margin negative on 5. So how do we -- can we get some color on it?

好的。我的第二個問題比較是針對 Lora 的。那麼，您能否以某種方式幫助我們量化 2020 年的利潤影響，因為我們可以預期 5 奈米的產量將非常高 - 快速增長，這自然會在第一年對利潤產生負面影響。我們將進入 7 奈米技術的第三年，因此利潤率的負面影響應該較小，但 5 奈米技術又會帶來新的利潤率負面影響。那麼，我們如何才能對此有所了解呢？

The margin impact actually has 2 front. Number one, introduction of new technology as you just mentioned. Usually, in the first year, there's a dilution to corporate gross margin. The other factor is utilization on each technology node, particularly the advanced technology node is more sensitive to utilization. So if we look at the corporate margin, we have to take consideration of both. But if we just talk about the leading-edge introductions, N5 will be like N7. It will have some dilution next year. And so we have indicated before, it takes 7 or 8 quarters to reach to corporate level. We believe N5 will follow the same pattern.

利潤率的影響其實有兩個面向。第一，正如您剛才提到的，引進新技術。通常，在第一年，企業毛利率就會下降。另一個因素是每個技術節點的利用率，特別是先進的技術節點對利用率更為敏感。因此，如果我們考慮企業利潤，我們必須同時考慮兩者。但如果只談論前沿技術的介紹，N5 將會像 N7 一樣。明年將會有所稀釋。我們之前已經指出，需要 7 到 8 個季度才能達到公司水準。我們相信 N5 也會遵循同樣的模式。

But can we assume that the first 2 quarters of N5 in the second half next year when you ramp-up the negative impact for the margin is likely 2% or 3% like what we had in 7?

但是，我們是否可以假設，明年下半年 N5 的前兩個季度，當利潤率的負面影響加大時，利潤率可能會像 7 季度一樣下降 2% 或 3%？

No. We need to look at what's the ramping speed as well. Because if you ramp faster, eventually, you can get through the learning curve quicker. So if you ramp slower, you'll take long time. So it's -- many factors will affect that.

不。我們還需要看看上升速度是多少。因為如果你進步得更快，最終你就能更快完成學習曲線。因此，如果你放慢速度，你就會花很長時間。所以，很多因素都會影響這一點。

I see. Because most of the investors' concern is that with EUV potential higher CapEx, blah, blah, blah, so that might have higher negative impact in terms of gross margin when we ramp up 5. So we just want to get some color to clear the concern.

我懂了。因為大多數投資者擔心的是 EUV 可能會增加資本支出等等，所以當我們增加 5 時，這可能會對毛利率產生更大的負面影響。所以我們只是想得到一些解釋來消除這種擔憂。

I think the N5 impact will not have difference than our previous leading nodes.

我認為N5的影響與我們之前的領先節點不會有差別。

I think this is about time that we should go to the line for the questions. Operator, could you please have the next caller on the line?

我認為現在是時候我們應該去回答問題了。接線生，請您讓下一位來電者接通好嗎？

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

當然。下一個問題來自 Arete Research 的 Brett Simpson。

I have plenty of questions for C.C. First on FD-SOI. It seems to be getting more traction in 5G than we first thought both on the -- on RF-SOI and on the modem side for handsets. So I'm just keen to understand if TSMC might consider supporting FD-SOI or RF-SOI. And if not, how you plan to defend against it?

我有很多問題想問 C.C.首先是FD-SOI。它在 5G 領域的發展勢頭似乎比我們最初想像的要強勁，無論是在 RF-SOI 方面，還是在手機調變解調器方面。所以我只是很想知道台積電是否會考慮支援 FD-SOI 或 RF-SOI。如果沒有，您打算如何防禦？

Okay. The question is FD-SOI has some good momentum in 5G area. And does TSMC consider to develop the FD-SOI? The answer is no. Actually, we also offer very good technology, 22 nanometer technology that today's performance is very comparable to FD-SOI, if not better. And we're talking to the customer right now and a lot of customers start to adopt the TSMC's approach. So no, we are not going to develop FD-SOI technology.

好的。問題是 FD-SOI 在 5G 領域有著良好的發展勢頭。台積電是否考慮開發FD-SOI？答案是否定的。實際上，我們也提供非常好的技術，22奈米技術，其今天的性能與FD-SOI非常相似，甚至更好。我們現在正在與客戶交談，許多客戶開始採用台積電的方法。所以，我們不會開發 FD-SOI 技術。

Okay. And just a follow-up, C.C. Can you give us your perspective on TSMC's strategy for compound semiconductor materials like gallium nitride or silicon carbide? It seems to be still very small market, but the potential long term seems to be quite significant. So how does TSMC plan to deploy these in its variance?

好的。接下來是 C.C.您能否談談對台積電在氮化鎵或碳化矽等複合半導體材料的策略的看法？這似乎仍然是一個非常小的市場，但長期潛力似乎相當大。那麼台積電計畫如何在其變體中部署這些？

Okay. The question is about III-V compound or compound semiconductors. TSMC actually is developing the gallium nitride technology to support the power management IC or the high-voltage, high-current power management. And others like gallium oxynitride high frequency or those kind of thing, no, we are not doing it. We -- actually, we are doing the gallium nitride project to support our customers' need. That, today, we are doing. Silicon carbide, no. We are not doing it also.

好的。問題是關於 III-V 化合物或化合物半導體。台積電實際上正在開發氮化鎵技術來支援電源管理IC或高壓、大電流的電源管理。至於其他諸如氮氧化鎵高頻或類似的東西，不，我們沒有做。實際上，我們正​​在進行氮化鎵專案來滿足客戶的需求。今天，我們正在這樣做。碳化矽，不。我們也不這麼做。

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

接線生，請您接通下一個來電者好嗎？

Sure. We have Mehdi Hosseini of SIG.

當然。我們請到了 SIG 的 Mehdi Hosseini。

Two questions. First one, is your guide on the smartphone revenue growth of high single digit this year impacted by one of the leading semiconductor company exiting the baseband business. And I'm just trying to better understand how you view going to capitalize this opportunity, and I have a follow-up.

兩個問題。首先，受一家領先的半導體公司退出基帶業務的影響，今年智慧型手機收入將實現高個位數成長。我只是想更了解您如何看待利用這個機會，我有一個後續問題。

Mehdi's question is that whether or not this year our high single-digit growth in the smartphone platform is affected by 1 very large company's exit from the baseband market.

Mehdi 的問題是，今年我們智慧型手機平台的高個位數成長是否受到一家非常大的公司退出基帶市場的影響。

Well, again, we don't comment on specific customer's business situation, but I will say this year that we have a high single-digit smartphones, of course. It's because, one, we gained market share. Two, again, that silicon content is higher. So that's why we say we have a high single-digit growth.

好吧，再說一次，我們不會對特定客戶的業務狀況發表評論，但我要說的是，今年我們的智慧型手機銷量當然是高個位數的。這是因為，第一，我們獲得了市場份額。二、再次，矽含量較高。這就是我們說我們實現了高個位數成長的原因。

Okay. Great. And then turning onto the 6-nanometer. I'm just trying to better understand the applications that would utilize 6-nanometer. And if I heard you correctly, 6 is going to be ramping later than 5. And if you could elaborate on the current applications that would use that would be good at understanding that particular node?

好的。偉大的。然後轉向 6 奈米。我只是想更了解利用 6 奈米的應用。如果我沒聽錯的話，6 將會比 5 更晚發展。如果您能詳細說明目前使用的應用程序，那麼這將有利於理解該特定節點嗎？

Right. The question is about N6. It looks like N6 is behind N5 in terms of schedule. So what is the application? Well, again, I want to reiterate that N6 is coming from the N7, N7+ experience and learning. And so the N6, if you -- a lot of customers are already entering N7 with a lot of tapeouts. So N6 provides them a very good path that they can easily port their current products into N6. So gain the benefit of either the performance, the die area and also the shortened cycle time. N5 is a totally new node. So we're entering into a very new area. If you start to design the N5 today as compared with you want to enter the N6 with N7 already in your pocket, I think N6 will be much easier. I cannot say that N5 is difficult, but TSMC will help you to move into N5, of course. But you look at the effort that you build the ecosystem. Ecosystem is the one that's very important for all the product companies want to design their new products. N7's ecosystem has been very complete. We even offer to the automotive grade, okay? And not to mention about mobile, HPC, everything. The ecosystem are ready, and equally mature will be the N6. Because we're 100% compatible. Of course, you still have to do some modification. If you want to shrink your die, you have to rerun your timing, closure, those kinds of things. But still much easier from N7 go to N6 rather than N7 go to N5. And that's the beauty of these 2 technologies. Did I answer the question?

正確的。問題是關於N6的。從進度來看，N6 似乎落後於 N5。那麼應用程式是什麼？好吧，我再次重申，N6 來自 N7、N7+ 的經驗和學習。因此，對於 N6，許多客戶已經進入 N7 領域，並且有大量的流片。因此，N6 為他們提供了一條非常好的途徑，他們可以輕鬆地將當前的產品移植到 N6 中。因此可以獲得性能、晶片面積以及縮短的周期時間方面的好處。N5是一個全新的節點。所以我們正在進入一個非常新的領域。如果您今天開始設計 N5，那麼與在已經擁有 N7 的情況下進入 N6 相比，我認為 N6 會容易得多。我不能說N5很難，但台積電當然會幫助你進入N5。但你看看你建構生態系統的努力。對於所有想要設計新產品的公司來說，生態系統都非常重要。N7的生態系統已經非常完善。我們甚至提供汽車級產品，好嗎？更不用說移動、HPC 等一切。生態系已經準備就緒，N6 也將同樣成熟。因為我們 100% 相容。當然，你仍然需要做一些修改。如果你想縮小你的模具，你必須重新運行你的計時、收斂等等。但從 N7 到 N6 仍然比從 N7 到 N5 容易得多。這就是這兩種技術的美妙之處。我回答問題了嗎？

Yes.

是的。

Follow-up question from Citi's Roland.

花旗銀行的羅蘭提出了後續問題。

So it looks like 2020 will be a very busy year to you. You are ramping up N7 plus, N6 and N5 together in the same year. So what kind of revenue growth projection underlying these 3 key technology ramps next year?

因此，2020 年對您來說似乎將是非常忙碌的一年。您將在同一年同時推出 N7 plus、N6 和 N5。那麼，明年這三項關鍵技術的發展將帶來什麼樣的營收成長預測呢？

Roland, we don't forecast next year. And please attend the first quarter next year.

羅蘭，我們不預測明年的情況。並請參加明年第一季的活動。

Okay. Then you have so many new technologies ramp up next year. So how about 2021? So any new technology? What kind of new technology you are going to launch in 2021?

好的。那麼明年就會有許多新技術湧現。那麼2021年怎麼樣呢？那麼有什麼新技術嗎？2021年你們準備推出什麼新技術？

Please attend next year's...

請參加明年的...

My next question is for Lora. So I looked at your 20-F. I think now your total accumulated legal capital reserves have exceeded paid-in capital in 2018. But still, Board of Directors on mid-teen in February have approved to continue appropriating 10% of 2018 net income to legal reserve. So why don't you just pay this 10% to investors in order to improve your ROE?

我的下一個問題是問 Lora 的。所以我看了你的 20-F。我認為現在你們的累計法定資本儲備總額已經超過了2018年的實收資本。但儘管如此，董事會在二月中旬已批准繼續將2018年淨收入的10％撥入法定儲備金。那麼，為什麼不直接將這 10% 支付給投資者以提高 ROE 呢？

We are increasing the dividend, and it's all come from retained earnings pool that includes the capital surplus, which we accrue every year. So we can choose not to, but we choose to because we want to be more conservative. And if we needed, we can issue dividend from that pool as well. So there's no impact to shareholders.

我們正在增加股息，這些股息全部來自包括我們每年累積的資本盈餘在內的留存收益池。所以我們可以選擇不這麼做，但我們選擇這樣做，因為我們想要更保守。如果需要的話，我們也可以從該資金池中發放股利。因此對股東沒有影響。

Okay. Understood. So it means that from next year, going forward, you will still appropriate at least 10% legal reserve?

好的。明白了。那麼，這意味著從明年開始，你們仍然會提取至少 10% 的法定儲備金？

Currently, that's how we're thinking. Yes. We will decide each year, okay? We have a very big retained earnings pool. You know that, okay?

目前，我們就是這樣想的。是的。我們每年都會決定，好嗎？我們擁有非常大的留存收益池。你知道的，好嗎？

Next question will be coming from CL Securities' Sebastian Hou.

下一個問題來自 CL Securities 的 Sebastian Hou。

My first question is can you give us the numbers of the fabless DOI existing 1Q '19? And what's your expectation by the end of this quarter? How many days above?

我的第一個問題是，您能否告訴我們 2019 年第一季現有無晶圓廠 DOI 的數量？您對本季末的期望是什麼？上面幾天？

Probably at the end of 1Q '19, probably around 10 days, roughly, okay? This is based on our own calculation, by the way. And in the middle of this year, probably reduce down to very low single-digit. That's why we say it's close to the seasonal level.

大概是 2019 年第一季末，大概 10 天左右，好嗎？順便說一下，這是基於我們自己的計算。到今年年中，可能會降至非常低的個位數。這就是為什麼我們說它接近季節性水平。

I need to add a little clarification here. The so-called fabless DOI is according to TSMC's own top 32 fabless customers' DOI. It is not the entire fabless industry. Thank you.

我需要在這裡補充一點說明。所謂無晶圓廠DOI，是根據台積電自己前32家無晶圓廠客戶的DOI。這並不是整個無晶圓廠產業。謝謝。

Okay. So for -- just also one follow-up on that is the definition of your fabless, does that include some system company? No, it's just only the fabless, the pure semiconductor companies?

好的。那麼，還有一個後續問題是，你們的無晶圓廠的定義是否包括一些系統公司？不，只是無晶圓廠、純粹的半導體公司嗎？

Okay. So I had an impression that earlier the company mentioned that the days of -- fabless days of inventory may continue to stay a few days above seasonal level throughout second half this year. So is that still the case based on the current outlook?

好的。因此，我的印像是，早些時候該公司提到，今年下半年無晶圓廠庫存天數可能會繼續比季節性水平高出幾天。那麼根據目前的前景，情況仍然如此嗎？

Very close to seasonal, so we did not comment a few days above. No. Okay?

非常接近季節，所以我們沒有對上面的幾天進行評論。不。好的？

Okay. But -- close to seasonal, but maybe not like really at a seasonal level?

好的。但是——接近季節性，但可能並不真正處於季節性水平？

Well, I would like to say that probably below seasonal level, but we -- it's too early for us. We don't have enough data to do all the analysis and too early for us to forecast accurately, say, how many days or below or above, all right? But we make our own judgment from the wafer loading and the past history's data. So we make our own calculation, so we observe that their inventory is greatly reduced in the second quarter. We are confident actually that in the middle of this year, we will be very close to the seasonal level.

嗯，我想說這可能低於季節性水平，但是我們 - - 這對我們來說還為時過早。我們沒有足夠的數據來進行所有的分析，而且現在還不能準確預測，比如說，多少天或多或少，好嗎？但我們根據晶圓裝載情況和過去歷史的數據做出了自己的判斷。所以我們自己做了計算，所以我們觀察到他們的庫存在第二季大大減少了。實際上，我們有信心，到今年年中，我們的產量將非常接近季節性水平。

My second question is on the smartphone growth outlook for this year. Remember last quarter, the company guided smartphone to grow slightly this year. And now it's like high single-digit. So it seems like about like 5 percentage point higher based on our own calculation. And I think last time you mentioned about also market share gain, content increase. This time, also the same reason. So I just wonder which of these 2 factors have surprised on the upside in the past 3 months?

我的第二個問題是關於今年智慧型手機的成長前景。記得上個季度，該公司預計今年智慧型手機將略有成長。現在它已經接近個位數了。因此，根據我們自己的計算，這似乎高出約 5 個百分點。我認為上次您還提到了市場份額的增加和內容的增加。這次，也是同樣的原因。所以我只是想知道在過去的 3 個月中，這兩個因素中哪一個帶來了意外的上升趨勢？

Well, we gain market share. That's -- and actually, our customers gain market share, let me say that. And that is kind of good news to TSMC, although we did not forecast that at the beginning of this year.

嗯，我們獲得了市場佔有率。那是——實際上，我們的客戶獲得了市場份額，讓我這麼說。這對台積電來說是個好消息，儘管我們今年年初並沒有預測到這一點。

Great. That was actually my follow-up question. So in terms of the market share gain and what's a surprise on the upside in the past 3 months, how much of that is your own share gain in the AP or baseband or semiconductor chip? Or how much of that is your customers gain share, so you benefit? Which one is more important?

偉大的。這其實是我的後續問題。那麼，就市場份額的增長以及過去 3 個月的意外增長而言，其中有多少是你們自己在 AP 或基帶或半導體晶片領域的份額增長？或者其中有多少是您的客戶獲得的份額，從而讓您受益？哪一個比較重要？

How can we separate that one out because of all the high-end smartphones, APs are all in TSMC. So you want me to separate all these customers' gain or TSMC's gain, I cannot separate out. It's all in TSMC.

由於所有高階智慧型手機、AP 均由台積電提供，因此我們如何將其區分開來？所以你要我把這些客戶的收益或台積電的收益全部分開，我分不出來。一切都在台積電。

Right. Right. But are you -- would you be worried about potential like -- maybe some of your high-end smartphone customers gain share right now, but that might cannibalize some of the -- your other high-end smartphone customers in second half this year?

正確的。正確的。但是您是否擔心潛在的——也許您的一些高端智慧型手機客戶現在獲得了份額，但這可能會在今年下半年蠶食您的一些其他高端智慧型手機客戶？

Well, so long as -- so long the high-end smartphone continue to grow or so long TSMC has a very high market share. We just do our job to support them.

嗯，只要高階智慧型手機持續成長，或是台積電擁有很高的市場佔有率。我們只是盡我們的職責來支持他們。

Okay. Dr. Sun, can I just have 1 more follow-up?

好的。孫醫生，我可以再回一次回診嗎？

Do you object? There's no objection, so you may continue.

你反對嗎？沒有人反對，你可以繼續。

So on the HPC side, also it seems like growth is better than last quarter guidance. I remember it was slight growth without crypto. Now it is high single digit, so also about 5 percent point higher. I think that C.C. earlier mentioned about is major due to the networking on the 5G deployment. So is it mainly driven by 1 or 2 few customers or several customers across the board?

因此，在 HPC 方面，成長似乎也比上一季的預期好。我記得在沒有加密貨幣的情況下，它是輕微增長的。現在是一個高個位數，所以也高出約 5 個百分點。我認為 C.C.上述內容主要歸功於5G網路的部署。那麼，它主要是由一兩個少數客戶推動的，還是由多個客戶推動的？

In the 5G area, there are many players. And all of them are now very optimistic. And so the 5G deployment is faster than we initially planned, okay? That's a trend right now. So we are forecasting higher growth than 3 months ago.

在5G領域，玩家眾多。現在他們都非常樂觀。因此 5G 部署比我們最初計劃的要快，好嗎？這是現在的趨勢。因此，我們預測成長率將高於三個月前。

Okay. So it's very widespread rather than 1 or 2 chip customers?

好的。所以它非常廣泛，而不是只有 1 或 2 個晶片客戶？

You are right.

你是對的。

JPMorgan's Gokul has a follow-up question.

摩根大通的 Gokul 有一個後續問題。

My first question, I just wanted to clarify. I think last time, we mentioned N7+ could be about $1 billion or slightly higher than that of revenue in 2019. Are we still seeing that or customers are still staying on N7 for this year?

我的第一個問題，我只是想澄清一下。我想上次我們提到過，N7+ 的收入可能在 10 億美元左右，或略高於 2019 年的收入。我們是否仍會看到這種情況，或者客戶今年仍會繼續使用 N7？

We are ramping up N7+ right now, but the revenue for this year is still a little bit less than $1 billion. And as I just mentioned, next year is that one we try to look at it. I will believe most of the customers will adopt the N6 because that's much easier for them to move into. And the benefit is almost the same as N7+. So I will say N7+ this year, a little bit below $1 billion. Next year, it probably won't grow, but N6 will start to pick up.

我們目前正在加大 N7+ 的投入，但今年的營收仍略低於 10 億美元。正如我剛才提到的，明年我們將嘗試研究這個問題。我相信大多數客戶都會採用 N6，因為這對他們來說更容易接受。而且收益跟N7+差不多。所以我認為今年的 N7+ 會略低於 10 億美元。明年，它可能不會增長，但 N6 將開始回升。

Okay. That's very clear. My second question, Dr. Wei, could you explain a little bit more on what you encompass when you talk about heterogeneous integration? I think some of your customers have talked about packaging multiple process technologies in the same package. I think some of the customers' forward-running researchers even talked about multiple process in the same wafer. Could you talk a little bit about what is TSMC's vision when we -- when it comes to heterogeneous integration maybe in the next couple of years since you're starting to showcase the technology and potentially going to production?

好的。這非常清楚。我的第二個問題，魏博士，您能否進一步解釋一下您所說的異質整合包含哪些內容？我認為你們的一些客戶已經談到在同一個封裝中封裝多種製程技術。我認為一些客戶的前瞻性研究人員甚至談到了同一晶圓上的多種工藝。您能否談談台積電在未來幾年對異質整合的願景是什麼？屆時您將開始展示這項技術，並有可能投入生產。

That is a very complex question to be answered. Actually, we're working with the customers and -- different customers has different needs, but the trend on the heterogeneous integration is what we believe that in the future a lot of customers will adopt. But because of the benefit that when the circuit at some speed now is limited by the connection from the chip to chip, connection chip to chip's communication. So that has to be shortened and -- to gain the benefit of your single chip's high performance. So you want to put them together. You better to reserve your signal's integrity. You better has a very minimal capacitance, minimal inductance, minimal loss in the resistance. So we -- that's what I say heterogeneous integration become important because we are using the InFO. We are using the CoWoS to help our customer to integrate all of them together with the most efficient way to connect all the chip together and also extending if you need high bandwidth module that will one of the benefits that using TSMC's CoWoS or InFO and -- so if you ask me what is the application in the future, HPC will be the one that will adopt this kind of process. That's the first one to go into. But of course, today, mobile smartphone already adopted the InFO technology as you knew already. And more and more of the high-end smartphone and more and more of the HPC's customer will adopt TSMC's advanced packaging method, including heterogeneous integration.

這是一個非常複雜的問題。實際上，我們正​​在與客戶合作——不同的客戶有不同的需求，但我們相信未來許多客戶都會採用異質整合的趨勢。但由於當電路在某種速度下時受到晶片與晶片之間連接、晶片與晶片之間通訊的限制。因此必須縮短這一時間，以獲得單晶片高性能的優勢。所以你想把它們放在一起。您最好保留訊號的完整性。最好是具有非常小的電容、最小的電感、最小的電阻損耗。所以我們——這就是我所說的異質整合變得重要，因為我們正在使用 InFO。我們正在使用 CoWoS 來幫助我們的客戶以最有效的方式將所有晶片整合在一起，如果您需要高頻寬模組，還可以進行擴展，這將是使用台積電的 CoWoS 或 InFO 的優勢之一——所以如果你問我未來的應用是什麼，HPC 將是採用這種流程的應用。這是第一個要講的。但當然，正如您所知，今天的行動智慧型手機已經採用了 InFO 技術。而且越來越多的高階智慧型手機和越來越多的HPC客戶會採用台積電的先進封裝方法，包括異質整合。

So then we shouldn't expect that advanced packaging just keeps rising as a percentage of your revenue in a pretty steady manner for the next few years?

那麼，我們不應該期望先進封裝在未來幾年內佔你們收入的百分比會持續穩定上升嗎？

You're right.

你說得對。

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

下一個問題來自摩根士丹利的 Charlie Chan。

So first of all, that revenue breakdown by application was very helpful. Just -- can you give us some clarification. For example, the consumer application on smartphone platform. Can you give us some illustration for this kind of semiconductors? What is the consumer application by applying the smartphone platform? Or you can just ignore those kind of minor contribution?

首先，按應用程式細分收入非常有幫助。只是——您能否給我們一些澄清。例如智慧型手機平台上的消費者應用程式。您能給我們舉一些這種半導體的例子嗎？應用智慧型手機平台的消費者應用是什麼？或者你可以忽略這些微小的貢獻？

Probably -- I -- do you have any good answer to that one, the consumer inside a smartphone?

可能——我——你對這個問題有什麼好的答案嗎，智慧型手機裡的消費者？

I don't know. You mean the consumer inside smartphone?

我不知道。你指的是智慧型手機裡面的消費者嗎？

Yes. Well, if you are using the smartphone to do the gaming, can I say it's a consumer function inside a smartphone?

是的。好吧，如果您使用智慧型手機玩遊戲，我可以說這是智慧型手機內部的消費者功能嗎？

Yes. I think your definition, for example, for GPU in gaming or for AI or for PC, I think that was clear, right, but you -- now you provide a more breakdown, we really appreciate. I just wanted to make sure we don't get it wrong.

是的。我認為您的定義，例如，對於遊戲中的 GPU 或 AI 或 PC 的定義，我認為這很清楚，對吧，但是您 - 現在您提供了更細分的定義，我們真的很感激。我只是想確保我們不會犯錯。

Video games is a consumer application now is in HPC and set-top box, digital TV, cordless phone, these are consumer applications now in the digital consumer electronics.

電玩遊戲現在是一種消費應用，存在於 HPC 和機上盒、數位電視、無線電話中，這些都是現在數位消費性電子產品中的消費應用。

Okay. Okay. So also my next question is about your supply chain management, right, related to your kind of high inventory level, right? So now how is the raw wafer inventory at the foundry. And do you plan to reduce some shipment from those raw wafer vendors? And also regarding that previous chemical issue, would you get any compensation from your chemical vendors?

好的。好的。所以我的下一個問題是關於您的供應鏈管理，對吧，與您的高庫存水準有關，對吧？那麼現在代工廠的原始晶圓庫存狀況如何？您是否計劃減少那些原始晶圓供應商的部分出貨量？另外，關於之前的化學品問題，你們從化學品供應商得到任何賠償了嗎？

I will answer first part of the question. Our DOI actually included an increase of raw wafer inventory. So on a Q-o-Q basis, it does increase a few days of our own DOI because we have very low first and second quarter and we have a contract with those wafer companies. But moving to a second half as our demand pick up, those DOI on raw wafer, we'll gradually digest it to a normal level. This is the first part of your question.

我將回答問題的第一部分。我們的 DOI 實際上包括原始晶圓庫存的增加。因此，按季度計算，我們自己的 DOI 確實增加了幾天，因為我們第一季和第二季的 DOI 非常低，而且我們與那些晶圓公司簽訂了合約。但隨著下半年需求的回升，原始晶圓上的 DOI 將逐漸消化到正常水平。這是您問題的第一部分。

What is the second question?

第二個問題是什麼？

The chemical issue caused some damage, right? So will you get any reimbursements or compensation from your -- or TSMC will book it as kind of expense?

化學問題造成了一些損害，對嗎？那麼，您會從您那裡得到任何報銷或補償嗎？或者台積電會將其記為一種費用嗎？

So what is our...

那麼我們的...

Chemical quality...

化學品質...

The photoresist event, yes, and what we do?

是的，光阻事件，我們做什麼？

Yes. In terms of financial.

是的。在財務方面。

Do we ask for financial compensation?

我們要求經濟補償嗎？

Yes.

是的。

I have no comment on that one.

我對此不作評論。

Okay. No problem. And also, C.C., regarding your comments about 5-nanometer will have a bigger, larger scale and 7-nanometer because kind of wider applications. So my question is that besides exceeding 7-nanometer customers and applications, what will be the new customer or application for 5-nanometer?

好的。沒問題。另外，C.C.，關於您提到的 5 奈米將具有更大、更大規模，而 7 奈米將具有更廣泛的應用。所以我的問題是，除了超越 7 奈米的客戶和應用之外，5 奈米的新客戶或應用是什麼？

We are -- actually, we are engaging with the new big customers and they are expanding their product portfolio into HPC area and that's what we rely on. Okay. So that's why we say that 5-nanometer's business probably will be bigger than the 7-nanometer.

實際上，我們正​​在與新的大客戶合作，他們正在將其產品組合擴展到 HPC 領域，而這正是我們所依賴的。好的。這就是為什麼我們說 5 奈米的業務可能比 7 奈米更大。

Yes. Yes. And lastly, I guess on M&A, right, because your subsidiary Vanguard acquired GlobalFoundries' 8" fab early this year, right? So would you consider to do any M&A from those kind of overseas fab at some point?

是的。是的。最後，我想是關於併購，對吧，因為你們的子公司 Vanguard 今年年初收購了 GlobalFoundries 的 8 吋晶圓廠，對吧？那麼，您是否會考慮在某些時候對這些海外工廠進行併購？

We don't have a plan right now. Of course, if there's a good opportunity or everything that meet our strategy, we will consider, but we don't have any plan of M&A right now.

我們目前還沒有計劃。當然，如果有好的機會或一切符合我們策略的事情，我們都會考慮，但是我們目前還沒有任何併購計劃。

Okay. Yes. And follow-up question to Gokul's question regarding the profitability, right? So I guess last year one big event is that GlobalFoundries exited the leading-edge, right? But if you look at first half gross margin, I think it was much below previous cycle's margin. So do you think that your bargain power really improved after this industry consolidation? And how do you think about Samsung's EUV technology compared to your 5- or 6-nanometer?

好的。是的。這是 Gokul 關於獲利能力問題的後續問題，對嗎？所以我猜去年的一件大事就是 GlobalFoundries 退出了前沿，對嗎？但如果你看一下上半年的毛利率，我認為它遠低於上一周期的毛利率。那麼，您認為經過這次產業整合後，您的議價能力真的提高了嗎？您如何看待三星的 EUV 技術與您們的 5 奈米或 6 奈米技術相比？

You're talking about margin or profitability. Let me say that I think that the first quarter, second quarter's, most of the dip is caused by the 7-nanometer loading. The loading is so low that affect our margin by 4 points in the first quarter, by 3 points in the second quarter. So the loading is actually the dominant one. It's not because of others. You're talking about the EUV status compared with my competitor. All I can say is we are very confident that we can ramp-up the EUV right now. And we believe our -- the maturity or the readiness of the EUV technology, TSMC definitely is better than others.

您談論的是利潤或盈利能力。我認為第一季和第二季的大部分下滑都是由 7 奈米負荷造成的。負荷太低，第一節影響了我們的利潤4個百分點，第二節影響了我們的利潤3個百分點。因此，負載實際上是主要因素。這不是因為別人。您談論的是與我的競爭對手相比的 EUV 狀態。我只能說，我們非常有信心現在就能提高 EUV 產量。我們相信，就 EUV 技術的成熟度或準備程度而言，台積電絕對比其他公司更勝一籌。

Follow-up question from Crédit Suisse, Randy Abrams.

瑞士信貸蘭迪·艾布拉姆斯 (Randy Abrams) 提出的後續問題。

I just have 2 quick follow-ups. One for Lora on the dividend. Since you're moving to quarterly in first quarter approving for fourth quarter this year, next quarter would you declare for first quarter of 2020? And is it the view for 2020 you'll declare quarterly or will get a set amount for the full year next year?

我只有 2 個快速的後續問題。一份是給 Lora 的股息。由於您在今年第一季轉為按季度批准第四季度，那麼您下個季度會宣布 2020 年第一季嗎？對於 2020 年的展望，您會按季度宣布，還是會在明年獲得全年的固定金額？

After the shareholder meeting, we'll declare the $2, which is the first quarter dividend, will be paid in fourth quarter this year. And so every quarter from then, we will declare cash dividend and will be paid within 6 months. So first quarter next year, you will get a dividend from our board approval in third quarter this year. So that will continue going on. Did I make myself clear?

股東大會結束後，我們宣布第一季的2美元股利將在今年第四季支付。從那時起，我們每季都會宣布現金股息，並將在 6 個月內支付。因此，明年第一季度，您將獲得我們董事會在今年第三季批准的股息。這種情況將會持續下去。我說清楚了嗎？

Yes. That part is clear. And then so every quarter we'll declare, but is there a goal...

是的。那部分很清楚。那我們每季都會宣布，但有目標嗎？

Yes. Every quarter, we will declare dividend.

是的。每個季度，我們都會宣布股息。

Okay. And so your goal then for each year to still be stable or can it rise through...

好的。那麼你每年的目標是否能保持穩定或能否上升…

Yes. That's right. Stable.

是的。這是正確的。穩定的。

Okay. Good. Okay. And then one follow-up to just Charlie on the margins. Just relative to the revision you made, sales actually came in a little bit better, but the gross margin came in toward the lower end of the range. I guess just relative if there were some factors that you saw in the last month that might have affected near term because it looks like by medium term, you have margin getting back toward 50.

好的。好的。好的。然後對邊緣上的查理進行跟踪。僅相對於您所做的修訂，銷售額實際上有所好轉，但毛利率卻處於較低水平。我想這只是相對而言的，如果你在上個月看到一些因素可能會對短期產生影響，因為看起來到中期，你的利潤率會回到 50。

Actually, when we gave the guidance on February, it's a range, right? So we are still within the range. So there are a few factors may have swing the gross margin, photoresist definitely one. Actually, the actual number was slightly deviated from what we have said in February, but still within the range, okay? Going forward, as I said in my remarks, we are thinking the 50% gross margin is still a good target for us. I really mean if we can achieve better utilization, we can go back to 50, but it will be depending on each quarter's demand profile. I'm not ready to give you third quarter and fourth quarter separately, but what I can say is our gross margin will improve in third quarter and we will further improve in fourth quarter.

實際上，當我們在二月份給出指導時，這是一個範圍，對嗎？所以我們仍在範圍內。因此，有幾個因素可能會影響毛利率，光阻肯定是其中之一。其實實際數字和我們二月說的有一點偏差，但是還在範圍內，好嗎？展望未來，正如我在發言中所說，我們認為 50% 的毛利率對我們來說仍然是一個好的目標。我真正的意思是，如果我們能夠實現更好的利用率，我們可以回到 50，但這取決於每個季度的需求情況。我還沒有準備好分別公佈第三季和第四季的業績，但我可以說的是，我們的毛利率將在第三季提高，並在第四季進一步提高。

Now with this very positive note on the margins and also as our CEO said, we have passed the bottom of the cycle for our business and we are launching the industry's competitive leading-edge technologies, With volume production already taken place using EUV. I think let's end our conference today with such a high note. Thank you for coming to our event today, and we hope to see you next quarter. Thank you.

現在，利潤率呈現非常積極的態勢，正如我們的執行長所說，我們已經度過了業務週期的底部，並且正在推出業界具有競爭力的尖端技術，並且已經使用 EUV 進行了批量生產。我想讓我們以這樣的高潮來結束今天的會議。感謝您今天參加我們的活動，我們希望下個季度能見到您。謝謝。