台積電 ADR (TSM) 2019 Q3 法說會逐字稿

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

(外語)歡迎參加台積電2019年第三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.

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。

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

由於本次會議將受到全球投資者的關注，因此我們將僅以英語進行此活動。

The format for today's event will be as follows: first, TSMC's Vice President and Chief Financial Officer, Mr. Wendell Huang, will summarize our operations in the third quarter 2019 followed by the guidance for the fourth quarter. Afterwards, Mr. Huang and TSMC 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.

今天活動的形式如下：首先，台積電副總裁兼財務長黃溫德爾先生將總結我們2019年第三季的營運情況，然後介紹第四季的指引。隨後，黃先生與台積電執行長C.C.博士進行會談。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 from TSMC's website at www.tsmc.com. Please also download the summary slides in relation to today's earnings conference presentation.

對於電話會議的參與者，如果您還沒有新聞稿的副本，您可以從台積電網站 www.tsmc.com 下載。請同時下載與今天的收益會議簡報相關的摘要投影片。

As usual, I would like to remind everybody that today's discussions may contain forward-looking statements that are subject to significant risks and uncertainties, which could cause the actual results to differ from -- materially from those contained in the forward-looking statements. 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, Mr. Wendell Huang, 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黃文德爾先生，請他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 the financial highlights for the third quarter followed by the guidance for the current quarter.

謝謝你，伊麗莎白。大家下午好，感謝大家今天的參與。我的演講將從第三季的財務亮點開始，然後是本季的指導。

Third quarter revenue increased 21.6% quarter-over-quarter to TWD 293 billion, driven by new product launches, both in premium smartphone and high-performance computing applications using TSMC's industry-leading 7-nanometer technology.

第三季營收季增 21.6% 至 2,930 億新台幣，這得益於採用台積電業界領先的 7 奈米技術的高階智慧型手機和高效能運算應用的新產品的推出。

Gross margin increased by 4.6 percentage points sequentially to 47.6%, mainly due to a solid improvement in capacity utilization.

毛利率季增4.6個百分點至47.6%，主要由於產能利用率的穩定提高。

Total operating expenses accounted for 10.7% of net revenue compared to 11.2% in the second quarter due to better operating leverage.

由於營運槓桿率提高，總經營費用佔淨收入的 10.7%，而第二季為 11.2%。

Operating margin increased by 5.1 percentage points sequentially to 36.8%.

營業利益率較上季成長5.1個百分點，達到36.8%。

Overall, our third quarter EPS was TWD 3.9 and ROE was 25.7%.

整體而言，我們第三季每股收益為3.9新台幣，股本回報率為25.7%。

Now let's take a look at revenue by technology. 7-nanometer technology saw very strong demand and accounted for 27% of wafer revenue in the third quarter. 10-nanometer was 2% and 16-nanometer was 22%.

現在讓我們來看看按技術劃分的收入。7奈米技術需求非常強勁，佔第三季晶圓營收的27%。10奈米為2%，16奈米為22%。

Advanced technologies, which are defined as 16-nanometer and below, accounted for 51% of wafer revenue, up from 47% in the second quarter.

先進技術（定義為 16 奈米及以下）佔晶圓收入的 51%，高於第二季的 47%。

Now let's take a look at revenue contribution by platform. All 4 of our growth platforms saw demand increases in the third quarter. Smartphone increased 33% quarter-over-quarter to account for 49% of our third quarter revenue. HPC increased 10% to account for 29%. IoT increased 35% to account for 9%. And automotive increased 20% to account for 4%.

現在我們來看看各平台的收入貢獻。我們所有 4 個成長平台的需求在第三季均有所成長。智慧型手機季增 33%，占我們第三季營收的 49%。HPC成長10%，佔29%。物聯網成長35%，佔9%。其中汽車類產品成長20%，佔4%。

Moving on to the balance sheet. We ended the third quarter with cash and marketable securities of TWD 585 billion, a decrease of TWD 180 billion from the second quarter, mainly as we distributed TWD 207 billion of cash dividends for 2018.

繼續討論資產負債表。截至第三季度，我們的現金及有價證券總額為 5,850 億新台幣，較第二季度減少 1,800 億新台幣，主要因為我們派發了 2018 年現金股息 2,070 億新台幣。

On the liabilities side. Current liabilities decreased by TWD 127 billion quarter-over-quarter as we distributed 2018 cash dividend and accrued another TWD 65 billion or TWD 2.5 per share for the second quarter 2019 cash dividend and that will be paid in January of next year.

在負債方面。流動負債較上一季減少1,270億新台幣，因公司已派發2018年度現金股息，並已累計派發2019年第二季現金股息650億新台幣，即每股2.5新台幣，將於明年1月派發。

On financial ratios. Accounts receivables turnover days decreased 1 day to 41 days. Days of inventory decreased 11 days to 65 days, reflecting higher wafer shipments during the quarter.

關於財務比率。應收帳款週轉天數減少1天至41天。庫存天數減少 11 天至 65 天，反映出本季晶圓出貨量增加。

Now let me make a few comments on cash flow and CapEx. During the third quarter, we generated about TWD 142 billion of cash from operations, spent TWD 98 billion in capital expenditures and distributed TWD 207 billion of cash dividend. As a result, our overall cash balance decreased by TWD 197 billion to TWD 452 billion at the end of the quarter. In U.S. dollar terms, our third quarter capital expenditures was $3.14 billion.

現在，讓我對現金流和資本支出發表一些評論。第三季度，我們從營運中產生了約1,420億新台幣的現金，花費了980億新台幣的資本支出，並分配了2,070億新台幣的現金股息。因此，本季末我們的整體現金餘額減少了 1,970 億新台幣，至 4,520 億新台幣。以美元計算，我們第三季的資本支出為 31.4 億美元。

I have finished my financial summary. Now let's turn to fourth quarter guidance. Based on the current business outlook, we expect our fourth quarter revenue to be between USD 10.2 billion and USD 10.3 billion, which is a 9% sequential increase at the midpoint.

我已經完成了財務總結。現在讓我們來看看第四季的指導。根據目前的業務前景，我們預計第四季營收將在102億美元至103億美元之間，以中位數計算季增9%。

Based on the exchange rate assumption of USD 1 to TWD 30.6, gross margin is expected to be between 48% and 50%. Operating margin is expected to be between 37% and 39%.

以1美元兌30.6新台幣的匯率假設計算，毛利率預計介於48%至50%之間。預計營業利潤率在37%至39%之間。

This concludes my financial presentation. Let me follow by making a few comments about 2019 capital expenditures and TSMC's long-term financial objectives.

我的財務報告到此結束。接下來，我想就2019年的資本支出和台積電的長期財務目標發表一些評論。

I will first talk about our capital budget for this year. In TSMC, we build capacity according to our customer's demand. To forecast such demand, we take into consideration not only from each individual customer's indication, but also our own forecast based on macro as well as market segment outlook. Given the stronger outlook for 5G deployment next year, the demand for our 7-nanometer and 5-nanometer has increased significantly in the last few months.

我先談談我們今年的資本預算。在台積電，我們根據客戶的需求來建立產能。為了預測這種需求，我們不僅考慮每位客戶的指示，還考慮我們自己基於宏觀和市場區隔前景的預測。鑑於明年 5G 部署前景更加強勁，過去幾個月對 7 奈米和 5 奈米的需求大幅增加。

We have, therefore, decided to raise our full year 2019 CapEx by USD 4 billion to meet this increased demand. We now expect our 2019 CapEx to be between USD 14 billion and USD 15 billion. About USD 1.5 billion of the USD 4 billion Capex increase is for 7-nanometer capacity and $2.5 billion is for 5-nanometer capacity.

因此，我們決定將 2019 年全年資本支出提高 40 億美元，以滿足日益增長的需求。我們現在預計 2019 年的資本支出將在 140 億至 150 億美元之間。40 億美元資本支出增加中，約 15 億美元用於 7 奈米產能，25 億美元用於 5 奈米產能。

Although we're not able to give you a formal guidance for our next year's CapEx until next January, we currently plan next year's CapEx to be somewhat similar to our revised 2019 CapEx.

雖然我們要到明年 1 月才能為您提供明年資本支出的正式指導，但我們目前計劃明年的資本支出與我們修訂後的 2019 年資本支出有些相似。

Now let me state our long-term financial objectives. As the company's new CFO, I'm happy to tell you that TSMC's long-term financial objectives remain the same. Our goal is to achieve revenue and net income CAGR in the next few years to be between 5% and 10% in U.S. dollar terms, gross margin to be about 50%, operating margin to be about 39% and ROE to be above 20%.

現在讓我陳述一下我們的長期財務目標。身為公司新任財務官，我很高興地告訴大家，台積電的長期財務目標保持不變。我們的目標是實現未來幾年收入和淨收入的複合年增長率以美元計算在5%至10%之間，毛利率在50%左右，營業利潤率在39%左右，ROE在20%以上。

Regarding our cash dividend policy. We reiterate that we will distribute about 70% of free cash flow as cash dividend. More importantly, TSMC is committed to a sustainable cash dividend on both an annual and quarterly basis.

關於我們的現金股利政策。我們重申，我們將把約 70% 的自由現金流作為現金股利分配。更重要的是，台積電致力於每年和每季持續派發現金股息。

Now I will turn the microphone to C.C.

現在我將麥克風轉給 C.C.。

Thank you, Wendell. Good afternoon, ladies and gentlemen. Let me start with our near-term demand and inventory.

謝謝你，溫德爾。女士們、先生們，午安。讓我先從我們的近期需求和庫存開始。

We conclude our third quarter just reported by CFO with revenue of TWD 293 billion or USD 9.4 billion. That is slightly above our guidance due to better demand from smartphone-related applications than our forecast 3 months ago.

我們剛剛由財務長報告的第三季營收為 2,930 億新台幣或 94 億美元。由於智慧型手機相關應用程式的需求比我們三個月前的預測要好，因此這一數字略高於我們的預期。

Moving into fourth quarter this year, we expect demand from both smartphone- and high-performance computing-related applications will continue to increase, thanks to our industry-leading 7-nanometer technology that powers these applications.

進入今年第四季度，我們預計智慧型手機和高效能運算相關應用的需求將持續成長，這要歸功於我們業界領先的 7 奈米技術為這些應用提供支援。

On the inventory front, our fabless customers' overall inventory is being gradually digested throughout the third quarter. We now expect it reduce to a few days above seasonal level exiting third quarter then approach seasonal level by the end of this year.

在庫存方面，我們的無晶圓廠客戶的整體庫存正在第三季逐步消化。我們現在預計，到第三季末，這一數字將下降到比季節性水平高出幾天，然後在今年年底接近季節性水平。

For the full year of 2019, we forecast both the overall semiconductor market excluding memory and the foundry segment to decline by a low single-digit from the year 2018 level. However, we continue to expect TSMC to do better and achieve a slight annual growth.

對於 2019 年全年而言，我們預測不包括記憶體和代工部門的整體半導體市場都將比 2018 年的水準下降個位數。不過，我們仍然預期台積電的表現會更好，並實現略微的年度成長。

Now let me talk about the progress and development of 5G. 5G will drive AI applications and bring many benefits to the market. Performance will be greatly improved with data transmission speed up to 10x faster as compared to 4G network. In addition, 5G latency will have about a 90% reduction as compared to 4G, allowing for real-time response and control. The benefit from 5G will unlock new use cases such as AR, VR, real-time translation and high-quality gaming, to name a few. We believe smartphone OEMs will come out with many more innovative applications to take advantage of the 5G infrastructure.

現在我來談談5G的進展和發展。5G將推動AI應用並為市場帶來許多好處。與 4G 網路相比，資料傳輸速度將大大提高，最高可達 10 倍。此外，5G延遲較4G降低約90%，可實現即時響應與控制。5G 帶來的好處將開啟新的用例，例如 AR、VR、即時翻譯和高品質遊戲等等。我們相信智慧型手機原始設備製造商將推出更多創新應用程式來利用 5G 基礎設施。

Since the middle of this year, we have been seeing an acceleration in the worldwide 5G development. This will speed up the introduction and deployment of 5G network and smartphone in several major market around the world, which leads to the increase of our CapEx for this year. We expect a faster ramp of 5G smartphones as compared to 4G with the penetration rate of 5G smartphones to reach mid-teens percentage of the total smartphone market in 2020.

今年年中以來，全球5G發展呈現加速態勢。這將加速全球幾個主要市場引入和部署5G網路和智慧型手機，導致我們今年的資本支出增加。我們預計 5G 智慧型手機的成長速度將比 4G 更快，到 2020 年 5G 智慧型手機的普及率將達到整個智慧型手機市場的百分之十幾。

Meanwhile, we expect the silicon content of 5G smartphones will be substantially higher than that of 4G smartphones. That is due to increasing functionalities and additional ICs for more camera, RF circuit, modem, power management IC, et cetera.

同時，我們預期5G智慧型手機的矽含量將大大高於4G智慧型手機。這是由於功能不斷增加以及需要更多攝影機、射頻電路、調製解調器、電源管理 IC 等附加 IC。

Power efficiency, speed and ability to incorporate additional functionality are critically important to 5G smartphones, which require TSMC's leading-edge technology and will continue to fuel our growth for the next several years.

電源效率、速度和整合附加功能的能力對於 5G 智慧型手機至關重要，這需要台積電的尖端技術，並將在未來幾年繼續推動我們的成長。

Now I will talk about our N5 and N3 status. Our N5 technology has already entered risk production with good yield. The N5 will adopt the EUV extensively and is well on track for volume production in the first half of next year. With 80%, 8-0, logic density gain and about a 20% speed gain compared with the 7-nanometer, our N5 technology is true full node stride from our N7. We believe it will be the foundry industry's most advanced solution with the best density, performance and power until our 3-nanometer arrives.

現在我來談談我們的N5和N3狀態。我們的N5技術已經進入風險生產，產量良好。N5將廣泛採用EUV，並預計在明年上半年量產。與 7 奈米相比，我們的 N5 技術邏輯密度提高了 80%，速度提高了約 20%，是 N7 真正的全節點跨越。我們相信，在 3 奈米到來之前，它將成為代工行業最先進的解決方案，具有最佳的密度、性能和功率。

With N5, we are further expanding our customer product portfolio and increasing our addressable market. The initial ramp will be driven by both mobile and HPC applications. We are confident that 5-nanometer will have a strong ramp and be a large and long-lasting node for TSMC.

借助 N5，我們進一步擴大了客戶產品組合併增加了我們的潛在市場。初始成長將由行動和 HPC 應用推動。我們相信，5 奈米將會有強勁的成長勢頭，並成為台積電的一個重要且持久的節點。

Now I will talk about the N3. We are working with customers on N3 and the technology development progress is going well. Our N3 will be another full node from our N5 with PPA gain similar to the gain from N7 to N5. We expect our 3-nanometer technology will be the most advanced foundry technology in both PPA and transistor technology when it is introduced.

現在我來談談N3。我們正與客戶合作N3技術開發，進展順利。我們的 N3 將成為 N5 的另一個完整節點，其 PPA 增益與 N7 到 N5 的增益類似。我們預計，我們的 3 奈米技術推出後將成為 PPA 和電晶體技術中最先進的代工技術。

Now I will talk about the ramp-up of N7, N7+ and the status of N6. Today, we are completing our second year ramp of N7. We continue to see very strong demand across a wide spectrum of products for mobile, HPC and IoT applications. Our N7+ is the industry's first commercially available EUV lithography technology.

現在我將討論 N7、N7+ 的提升以及 N6 的狀態。今天，我們完成了 N7 的第二年升級。我們持續看到行動、高效能運算和物聯網應用領域廣泛產品的需求非常強勁。我們的N7+是業界首個商用的EUV微影技術。

N7+ provide 15% to 20% higher density with improved power consumption when compared to N7. That is already in high volume production with yield similar to N7. We expect the strong demand for N7+ continue into next year and are increasing Capex to meet this demand for multiple customers.

與 N7 相比，N7+ 的密度提高了 15% 到 20%，且功耗有所改善。這已經是大量生產了，產量與 N7 相似。我們預計 N7+ 的強勁需求將持續到明年，我們正在增加資本支出以滿足多個客戶的需求。

Now N6. Our N6 provide a clear migration path for the second-wave N7 product as its design rules are 100% compatible with N7 while providing 18% logic density gain with performance-to-cost advantage. The N6 uses one more EUV layer than N7+. N6 risk production is scheduled to begin in first quarter next year with volume production starting before the end of 2020.

現在是 N6。我們的 N6 為第二波 N7 產品提供了清晰的遷移路徑，因為其設計規則與 N7 100% 相容，同時提供 18% 的邏輯密度增益和效能成本優勢。N6 比 N7+ 多使用了一個 EUV 層。N6 風險生產計劃於明年第一季開始，並於 2020 年底前開始量產。

We reaffirm 7-nanometer will contribute more than 25% of our wafer revenue in 2019 and we expect even higher percentage in 2020 due to worldwide development of 5G, accelerated demand from HPC, mobile and other application continue to grow.

我們重申，2019 年 7 奈米將貢獻我們晶圓收入的 25% 以上，並且由於全球 5G 的發展、HPC、行動和其他應用的需求加速成長，我們預計 2020 年這一比例會更高。

Finally, I will talk about TSMC's advanced packaging business. Our advanced packaging solutions enable system integration with wafer level process, allowing seamless integration of front-end wafer process and back-end chip packaging. The solutions consist of CoWoS, InFO, System on Integrated Chips or SoIC and the Wafer on Wafer or WoW. We are seeing strong momentum for CoWoS and InFO for HPC applications as we continue to enlarge the integrated chip area to about -- to above 2 reticle size in 1 module.

最後講一下台積電的先進封裝業務。我們先進的封裝解決方案實現了與晶圓級製程的系統集成，實現了前端晶圓製程與後端晶片封裝的無縫整合。解決方案包括 CoWoS、InFO、整合式晶片系統 (SoIC) 和晶圓上晶圓 (WoW)。隨著我們不斷將整合晶片面積擴大到 1 個模組中 2 個光罩尺寸以上，我們看到 CoWoS 和 InFO 在 HPC 應用方面發展勢頭強勁。

We are also working with a few leading customers on SoIC, which is an industry-leading 3D-IC packaging solution. SoIC enables 3D integration of multiple chips in close proximity to deliver the best possible performance, power and form factor. We target to start production in 2021 time frame with early adoption by HPC applications.

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。SoIC 能夠實現多個晶片的緊密 3D 集成，以提供最佳的性能、功率和外形尺寸。我們的目標是在 2021 年開始生產，並儘早被 HPC 應用採用。

As our industry continues to seek innovation to enhance system level performance, TSMC's differentiating advanced packaging solution will allow us to grow the business at a pace faster than corporate in the next few years. And thank you for your attention.

隨著我們的行業不斷尋求創新以提高系統級效能，台積電差異化的先進封裝解決方案將使我們在未來幾年內以比企業更快的速度成長業務。感謝您的關注。

This concludes our prepared statements. Before we begin the Q&A session, I would like to remind everybody to limit your questions to 2 at a time to allow all participants an opportunity to ask their questions. Questions will be taken both from the floor and from the call. Should you wish to raise your questions in Chinese, I will translate it to English before our management answers your question. (Operator Instructions) Now we begin.

我們的準備聲明到此結束。在我們開始問答環節之前，我想提醒大家每次將問題限制為 2 個，以便所有參與者都有機會提問。問題將從現場和電話中回答。如果您想用中文提出問題，我會將其翻譯成英文，然後我們的管理層才會回答您的問題。（操作員指示）現在我們開始。

First, we will have questions coming from Crédit Suisse, Randy Abrams.

首先，我們將回答來自瑞士信貸的蘭迪·艾布拉姆斯 (Randy Abrams) 的問題。

Good results and outlook. Wanted to ask the first question given the high CapEx for this year and next year, if you could talk about the capital requirements for 5-nanometer in EUV. Maybe how the equation with EUV coming in, how does that affect the capital intensity, or say, the CapEx per thousand wafers? And how do you see this node in terms of pricing and maintaining the same level of profitability than prior nodes?

良好的結果和前景。第一個問題，考慮到今年和明年的高資本支出，您是否可以談談 EUV 5 奈米的資本要求。也許 EUV 的出現會如何影響資本強度，或者說每千片晶圓的資本支出？您如何看待這個節點的定價以及與之前的節點相比保持相同的利潤水平？

Okay. So Randy, you're asking about how much EUV accounts for the capital expenditures?

好的。那麼 Randy，您問的是 EUV 佔資本支出的多少？

Or how EUV changes your capital intensity or CapEx per K. If you're getting some benefits that it's actually lowering that. But given that CapEx is it still the same, you're seeing the higher CapEx per K? And then how does that translate into profitability? How you expect 5 to compare to, say, some of the prior nodes.

或 EUV 如何改變你的資本強度或每千像素的資本支出。如果你獲得了一些好處，那麼它實際上會降低這些好處。但考慮到資本支出是否仍然相同，您是否看到每公斤的資本支出更高？那麼這如何轉化為獲利能力呢？您期望 5 與某些先前的節點相比如何。

I cannot talk too much about details. But definitely, CapEx per K for 5 is certainly higher than previous nodes. However, if we combine everything together, as we said at the beginning, we're still seeing our profit -- structure profitability remains the same.

我不能談論太多細節。但可以肯定的是，5K 的資本支出肯定高於先前的節點。然而，如果我們把所有東西結合起來，就像我們一開始說的那樣，我們仍然會看到利潤——結構盈利能力保持不變。

Okay. I'll ask one follow-up to that and then a second question. Is this year, like second half, strong demand leading-edge type the gross margin guidance for fourth quarter is still -- it's a good margin, but it's 48% to 50% and I think the target is staying at 50%. So maybe if there's still a little bit of drag on the margin?

好的。我將就此提出一個後續問題，然後再問第二個問題。今年，例如下半年，需求強勁，領先類型，第四季度的毛利率指引仍然很好，但在 48% 到 50% 之間，我認為目標仍保持在 50%。那麼，如果利潤率仍然有一點點阻力，情況會怎麼樣呢？

And with next year bringing in a new node 5, if you think you can get to that 50% for next year. That's just a follow-up.

隨著明年新節點 5 的引入，如果您認為明年可以達到 50% 的目標。這只是一個後續行動。

Okay. For the fourth quarter, it's just like we stated all along, if we're -- our structural profitability, when we reach 90% of utilization, we target to reach 50% of gross margins.

好的。對於第四季度，就像我們一直所說的那樣，如果我們的結構盈利能力達到 90% 的利用率，我們的目標是達到 50% 的毛利率。

For next year, still early to say, but structural profitability -- or profitability or margins may be affected by the ramp in a 5-nanometer as at the beginning of ramping of every technology nodes, it will somehow be affected. However, if the utilization is good, then we're still expecting to see the structural profitability continues.

對於明年來說，現在說還為時過早，但結構性盈利能力——或者盈利能力或利潤率可能會受到 5 奈米技術升級的影響，就像在每個技術節點開始升級時一樣，它都會受到某種影響。然而，如果利用率良好，那麼我們仍然預期結構性獲利能力將持續下去。

Okay. The second question I wanted to ask because you had a strong third quarter recovery, guiding another good fourth quarter, as you look to maybe an early look at next year, how should we think about seasonality? There are some concerns before 5G ramps we have a correction in 4G. And then we have if the tariffs hit, we might have had some prebuild. So how do you see kind of early year risk of, say, a correction? And can you pull in some demand, say, if capacity is tight to maybe mitigate the magnitude of correction early in the year?

好的。我想問的第二個問題是，由於你們在第三季強勁復甦，並引領了第四季的良好表現，而你們或許可以提前展望明年，我們該如何看待季節性？在 5G 普及之前，我們會對 4G 進行修正，這會帶來一些擔憂。如果關稅生效，我們可能會進行一些預建。那麼，您如何看待年初出現的調整風險呢？如果產能緊張，能否吸引一些需求，以減輕年初調整的幅度？

You're talking about the seasonality of smartphone. That we observe almost every year, and so I don't expect next year to be dramatically different. However, we did see some of the 5G smartphones, the growth momentum is higher than we expected. So I would expect next year's seasonality is not so strong as we observed for this year. But it's too early to say because the market is very dynamic.

您談論的是智慧型手機的季節性。我們幾乎每年都會觀察到這種情況，因此我預計明年不會有太大的不同。不過，我們確實看到了一些5G智慧型手機，其成長勢頭高於我們的預期。因此我預計明年的季節性不會像今年那麼強烈。但現在說還為時過早，因為市場非常活躍。

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

下一個問題來自摩根大通的 Gokul Hariharan。

So first of all, if we look at the history, whenever TSMC has had a step-up in CapEx, that is typically accompanied by a step-up in growth as well. So just wanted to kind of narrow down a little bit on the 5% to 10% growth, which is still kind of -- the kind of growth that we were expecting when we were spending TWD 10 billion to TWD 11 billion. So could you give a little bit more details or maybe narrow down the forecast a little bit more for us? Because if we say a TWD 14 billion to TWD 15 billion range of CapEx, that's closer to the high 30s or 40% capital intensity, higher than our previous range.

首先，如果我們回顧歷史，每當台積電的資本支出增加時，通常也會伴隨著成長的增加。因此，我只是想將成長範圍縮小到 5% 到 10% 之間，這仍然是我們在支出 100 億到 110 億新台幣時所預期的成長。那麼，您能否提供更多細節，或是為我們進一步縮小預測範圍？因為如果我們說資本支出在 140 億至 150 億新台幣之間，那就更接近 30% 或 40% 的資本密集度，高於我們之前的範圍。

Gokul, let me answer the question carefully. Let's say that TSMC always build capacity, working closely with customer and to meet their demand. That's our number one, okay? We discuss with the customer on their demand, we make our judgment also. Now we are increasing the CapEx quite a lot, no doubt about it. But then, that's due to some of the reasons I can foresee for the future. First, the 5G's ramp-up is much faster than 4G as we expected. Second, TSMC actually is expanding our customer portfolio, and in the same times, we're also expanding our product portfolio. And so put all the factors together, we have a good reason that we increase our CapEx this year and probably next year.

Gokul，讓我仔細回答這個問題。可以說，台積電始終在擴大產能，與客戶密切合作，以滿足他們的需求。這是我們的第一名，好嗎？我們與客戶討論他們的需求，並做出判斷。現在我們正在大幅增加資本支出，這是毫無疑問的。但那是因為我可以預見未來的一些原因。首先，正如我們預期的那樣，5G的普及速度比4G快得多。其次，台積電實際上正在擴大我們的客戶組合，同時，我們也在擴大我們的產品組合。綜合考慮所有因素，我們有充分的理由在今年以及明年增加資本支出。

Okay. So that basically suggests that 5% to 10% is not the growth for the next couple of years. But maybe just given the higher growth in 5G and accelerated build-out, could you talk a little bit about going into next year, do you expect 5G and smartphone to be the main growth driver? Or do you feel that HPC momentum is going to be even faster than smartphone given that some of your customers are starting to take a lot of market share?

好的。所以這基本上顯示 5% 到 10% 並不是未來幾年的成長目標。但也許只是考慮到 5G 的更高成長和加速建設，您能否談談明年的情況，您是否預計 5G 和智慧型手機將成為主要的成長動力？或者您是否認為，鑑於您的一些客戶開始佔據大量市場份額，HPC 的發展勢頭將比智慧型手機更快？

To answer your question, actually it's both. We expect the smartphone to grow faster than -- I mean that's not in terms of unit, but in terms of silicon content. And HPC also grow. As I said, we are expanding our product portfolio and also our customer portfolio. So the addressable market is increased. That's all.

回答你的問題，其實兩者兼具。我們預期智慧型手機的成長速度將比——我不是說以數量計算，而是以矽含量計算。HPC 也在成長。正如我所說，我們正在擴大我們的產品組合和客戶組合。因此可尋址市場擴大了。就這樣。

Okay. Just a follow-up question. I think at the beginning of the year, we had a more conservative view on 5-nanometer build-out. Obviously, that view has changed. So just to calibrate, should we expect now that 5-nanometer revenues next year are likely to be higher than, let's say, 7-nanometer last year, first year of ramp of 7-nanometer?

好的。這只是一個後續問題。我認為在今年年初，我們對 5 奈米的建設持更保守的看法。顯然，這種觀點已經改變。因此，只是為了校準，我們現在是否應該預期明年 5 奈米的收入可能會高於去年 7 奈米的收入（即 7 奈米技術發展的第一年）？

I don't want to say exactly what is the percentage. But let me say that now we have more optimistic than 6 months ago. Six months ago, I believe what I said is we will be very careful and a little bit conservative in building the 5-nanometer capacity. Now we changed to be more aggressive in the 5-nanometer capacity buildup because of we -- as I said, we work closely with customers in both -- all the applications like a smartphone, HPC, now even IoT and automotive.

我不想說具體百分比是多少。但我要說的是，現在我們比六個月前更樂觀。六個月前，我相信我說過，我們在建造 5 奈米產能時會非常謹慎，而且有點保守。現在，我們在 5 奈米產能建置方面變得更加積極，因為正如我所說，我們與智慧型手機、高效能運算 (HPC)，甚至物聯網 (IoT) 和汽車等所有應用領域的客戶密切合作。

Next question will be coming from UBS, Bill Lu.

下一個問題來自瑞銀的 Bill Lu。

First of all, Mr. Huang, congrats on the new post and looking forward to working with you. Going back to CapEx, given the big increase, can you give us some guidance for modeling depreciation?

首先，黃先生，恭喜您履新，期待與您共事。回到資本支出，考慮到大幅成長，您能否為我們提供一些折舊建模的指導？

Depreciation for this year will be flattish compared with last year because a big chunk of the increase happens in the fourth quarter.

今年的貶值幅度與去年相比將持平，因為很大一部分成長發生在第四季。

As to depreciation next year, based on what I just indicated about our capital expenditures for next year, it will be higher. However, the detail number or more specifics, we plan to discuss it in January next year.

至於明年的折舊，根據我剛才提到的明年的資本支出，折舊額會更高。不過，具體的數字或更多的具體細節，我們計劃在明年一月進行討論。

So if I look at when the new capacity is going to come online, is it mostly, say, Q2, Q3? Is that the right way to think about it?

因此，如果我查看新產能何時上線，主要是在第二季、第三季嗎？這是正確的思考方式嗎？

Well, if you look at the tools' lead time, your estimate is very good. Q2, Q3 time.

好吧，如果你看一下工具的交付週期，你的估計就非常好了。Q2、Q3時間。

Okay. Great. Dr. Wei, for 7-nanometers, obviously demand looks quite good. Can you give us some guidance for 7-nano as a percentage of revenues by end of next year?

好的。偉大的。魏博士，對於 7 奈米來說，需求顯然看起來相當好。您能否為我們提供明年年底前 7 奈米佔收入百分比的一些指引？

Higher than this year.

比今年高。

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

下一個問題來自花旗集團的 Roland Shu。

First, congrats for the very good result in 3Q. And I think our first question is you talked about next year for 5G smartphone will be the key growth driver. So also you talked about not only because of unit growth, but also for the semiconductor content increase. So do you have the number for the dollar content per 5G smartphone compared to your 4G?

首先，恭喜您第三季取得非常好的業績。我想我們的第一個問題是您談到明年 5G 智慧型手機將成為主要成長動力。所以您談到的不僅是因為單位數量的增長，還因為半導體含量的增加。那麼，與 4G 智慧型手機相比，您是否知道每部 5G 智慧型手機的美元內容數字？

Let the CFO to answer this.

讓財務長來回答這個問題。

The answer is we don't have that number.

答案是我們沒有這個數字。

But if you compare to the 4G, where does the increase come from? Is it because from this bigger die size or because of more semiconductor silicon? Or I think you probably have an assessment more or less, right?

但如果和4G相比，這個提升從何而來？是因為晶片尺寸較大還是因為半導體矽較多？或者我想你可能或多或少有一個評估，對嗎？

We do have some assessment, to be frank with you, because we know the die size, we know the number of the chips inside. I give you some of that -- the feeling. We are using the more advanced technologies so the die size increase on the leading edge is not so much, but it did increase because of more functionality, you can expect that people put AI application inside or those kind of things. More important, as the last time I believe I already mentioned that camera, for one example, now you can see more and more camera in smartphone, especially the high-end smartphone. And also the more resolution, the one will take silicon's real estate to -- from 12, what is that, 20 megapixel to 40 megapixel. So more camera, higher resolution, more pixel. And then also you need a lot of power management IC to control the power consumption because of 5G, they consume a lot of power. So your power management IC has to be more advanced, so you put more power management IC inside. And then you are talking about more channel in the communication, so the RF front-end, the transceiver, everything. You have not only the die size will increase actually to adopt the more channel. So it's even -- move into the higher leading-edge technology also.

坦白說，我們確實有一些評估，因為我們知道晶片尺寸，我們知道裡面晶片的數量。我給你一些這樣的感覺。我們正在使用更先進的技術，因此前沿的晶片尺寸增加並不多，但由於功能的增加，晶片尺寸確實增加了，你可以預期人們會在裡面放入人工智慧應用程式或諸如此類的東西。更重要的是，正如上次我相信我已經提到過的那樣，舉個例子，現在你可以在智慧型手機上看到越來越多的攝像頭，尤其是高階智慧型手機。而且解析度越高，佔用矽片面積就越大——從 1,200 萬像素，也就是 2,000 萬像素增加到 4,000 萬像素。因此，相機越多，解析度越高，像素也越高。而且你還需要很多電源管理IC來控制功耗，因為5G會消耗很多電力。因此，你的電源管理 IC 必須更先進，所以你在裡面放置了更多的電源管理 IC。然後你談到了通訊中的更多頻道，因此射頻前端、收發器等等一切。您不僅要增加晶片尺寸，實際上還要採用更多的通道。因此，它甚至還進入了更先進的前沿技術。

So I guess for the high end phone, probably the dollar content will increase more, right? So for your -- the total 5G smartphone unit forecast to be about mid-teens of the total shipment. So do you have this 5G smartphone breakdown by high end, mid and low end?

所以我猜對於高階手機來說，美元含量可能會增加更多，對嗎？因此，預計 5G 智慧型手機總量將佔總出貨量的 15% 左右。那麼，這款 5G 智慧型手機有高階、中階和低階的細分嗎？

We'll talk about it in January.

我們將在一月份討論這個問題。

Okay. My second question is now we are ramping up N7+ fastly. So is N7+ gross margin going to be very different from N7 we are enjoying now?

好的。我的第二個問題是我們現在正在快速推進 N7+。那麼 N7+ 的毛利率會與我們現在享受的 N7 有很大不同嗎？

It's very close.

非常接近了。

Okay. And how about for N7+, is this going to take 7 to 8 quarters to bring up the gross margin to corporate average?

好的。那麼對於 N7+ 來說，是否需要 7 到 8 個季度才能將毛利率提高到企業平均？

Let me take that. We look at 7, 7+ and 10 as a big node. So from that point of view, N7 nodes actually has reached corporate margins.

讓我來接手吧。我們將 7、7+ 和 10 視為一個大節點。因此從這個角度來看，N7節點實際上已經達到了企業利潤。

Okay. I think just a follow-up for -- I know you don't comment on the ASP, but for the same amount of the wafer shipment on N7+, is this going to contribute more revenue upside to TSMC?

好的。我想只是一個後續問題——我知道您沒有對 ASP 進行評論，但是對於 N7+ 上相同數量的晶圓出貨量，這會為台積電帶來更多的收入增長嗎？

You just mentioned we don't.

您剛才提到我們沒有。

No, I talk about revenue. I don't talk about ASP.

不，我談論的是收入。我不談論 ASP。

That's the same thing.

那是一樣的。

Next question will be coming from CLSA's Sebastian Hou.

下一個問題來自里昂證券的 Sebastian Hou。

My first question is to -- I want to ask about the CapEx intensity. So with the hike in this year CapEx, so apparently we can do the math that if this capex-to-sales will go up to shoot over 40% this year. So how do you see this trend into 2020?

我的第一個問題是──我想問一下資本支出強度。因此，隨著今年資本支出的增加，我們顯然可以計算出，今年資本支出與銷售額的比率是否會上升到 40% 以上。那麼您如何看待 2020 年的這一趨勢？

And then is there any updated guidance on the CapEx intensity going forward versus prior guidance?

那麼，與先前的指導相比，未來資本支出強度是否有任何更新的指導？

Okay. Yes. As you just mentioned, you can calculate the CapEx intensity this year will be over 40%. At the same time, as we indicated that next year's CapEx, although preliminary, is about the same level as this year and we also see strong demand for our business next year, our CapEx intensity will be lower next year. And what -- from what we can see at this moment, it will then gradually come down to probably between 30% or 35% level going in -- after next year.

好的。是的。正如您剛才提到的，可以計算出今年的資本支出強度將超過40%。同時，正如我們指出的，明年的資本支出雖然是初步的，但與今年的水平大致相同，我們也看到明年對我們業務的強勁需求，因此明年我們的資本支出強度將會降低。從我們目前看到的情況來看，明年之後這一比例將逐漸下降到 30% 或 35% 左右。

So we are not seeing going to 30% to 35% range in 2020 yet?

所以我們還沒看到 2020 年達到 30% 到 35% 的範圍嗎？

In a couple of years after 2020.

2020年之後的幾年。

But could potentially next year? You just -- you don't want to talk about that right now?

但明年有可能嗎？你只是——你現在不想談論這個嗎？

Right. The potential of capital intensity, you mean?

正確的。您指的是資本密集度的潛力嗎？

In other words, you're mid-30s by 2020?

換句話說，到 2020 年你就 30 多歲了？

It's lower than 40%.

低於40%。

Okay. Second question is on the gross profit margin. I recall that a couple of quarters or 2 quarters ago in the first half this year when TSMC pound the table saying that we are past the bottom, we are seeing the strong rebound in second half this year and also expect the gross margin will go back to 50% level second half. And indeed, now we see the utilization rate coming at -- coming back, revenue coming back in second half as expected. But it looks like the gross margin is lagging a little bit compared to if you -- yes, compared to the revenue direction. So can you explain what are these factors that driving gross margin recovery behind the revenue recovery?

好的。第二個問題是關於毛利率。我記得幾個季度前，也就是今年上半年的兩個季度前，台積電曾大力宣稱我們已經觸底，我們預計今年下半年將出現強勁反彈，並且預計下半年毛利率將回到 50% 的水平。事實上，現在我們看到利用率正在回升，收入也在下半年如預期般回升。但看起來毛利率與收入方向相比略有滯後。那麼，您能否解釋一下收入復甦背後推動毛利率復甦的因素有哪些？

Yes, I think you're talking about the third quarter gross margins. Whenever there's a big jump up in utilization quarter-over-quarter, there will be a negative hit on gross margins. It's called the inventory revaluation. I think -- I believe we mentioned about this some time ago. So yes, as you can imagine, the utilization in the third quarter is much higher than that in the second quarter. And therefore, there is an element of negative inventory valuation happen in the third quarter. The amount is slightly over 1 percentage point, okay? Now if utilization remains at similar level, that factor will not happen.

是的，我認為您說的是第三季的毛利率。每當利用率逐季大幅上升時，毛利率就會受到負面影響。這被稱為庫存重估。我想——我相信我們不久前提到過這個問題。是的，正如您所想像的，第三季的利用率遠高於第二季。因此，第三季出現了庫存估值為負的因素。這個金額稍微超過1個百分點，好嗎？現在，如果利用率保持在相似的水平，這種因素就不會發生。

Okay. But when we're looking at the fourth quarter gross margin guidance, I know the high end will reach the 50%. But it still looks like the -- it's ranging between 48% to 50%. So I mean there is still a chance for coming to go back to 50%, but it looks like the midpoint doesn't reach that yet. So I think not just about 3Q, but also the fourth quarter.

好的。但當我們查看第四季度的毛利率指引時，我知道最高將達到 50%。但它看起來仍然在 48% 到 50% 之間。所以我的意思是仍然有機會回到 50%，但看起來中點還沒有達到這個水平。所以我認為不只是第三季度，還有第四季。

Yes. As I mentioned earlier, I -- our structure profitability remains the same, i.e, if we reach 90% of utilization, we are targeting 50% of gross margins.

是的。正如我之前提到的，我們的結構獲利能力保持不變，也就是說，如果我們達到 90% 的利用率，我們的目標是 50% 的毛利率。

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。

Congratulations for very good, strong results. So sorry to keep coming back to this question. So it seems you are raising kind of long-term CapEx outlook including next year. Why don't you just revise up your revenue CAGR assumption. I think 5% to 10% revenue should be too conservative. Can you comment on that part?

恭喜您取得非常好的成績。很抱歉再次提出這個問題。因此，您似乎正在提出包括明年在內的長期資本支出前景。為什麼你不修改一下你的收入複合年增長率假設呢？我認為 5% 到 10% 的收入應該太保守了。您能對這部分做出評論嗎？

It's not about time to change that target. I would say still 5% to 10%, but it's in the upper side. Okay. I can say.

現在還不是改變這個目標的時候。我認為仍然是 5% 到 10%，但處於較高水平。好的。我可以說。

All right. Yes. And another on this capital intensity question is about the payback period, right? Because for me I still cannot add up why your structural profitability can remain the same whereas your capital intensity increased so much, right? So in other way, can you just comment about the payback period for your 7-nanometer and 5-nanometer investment you said becoming longer going forward?

好的。是的。關於資本密集度的另一個問題是關於投資回收期，對嗎？因為對我來說，我仍然無法理解為什麼你的結構性獲利能力可以保持不變，而你的資本密集度卻增加了這麼多，對嗎？那麼換句話說，您能否評論一下您所說的 7 奈米和 5 奈米投資的回報期是否會變得更長？

I remember this topic was discussed last time and I think our answer was that we don't look at payback period. We do look at return on invested capital. And from that part, we don't see that big a difference with the advanced technologies.

我記得上次討論過這個主題，我認為我們的答案是，我們不考慮投資回收期。我們確實關注投資資本的報酬率。從這一點來看，我們看不出先進技術與先進技術有太大差異。

Okay. And my next question is about the advanced packaging. I remember in the previous quarters, you commented advanced packaging should outgrow the front-end business. So first of all, is this remains the same trend? And also how about the potential margin dilution from the packaging business?

好的。我的下一個問題是關於先進封裝的。我記得在前幾個季度，您曾評論說先進封裝業務的成長速度應該超過前端業務。那麼首先，這是否仍然是相同的趨勢？包裝業務的潛在利潤率稀釋又如何呢？

The forecast on the advanced packaging business, the growth is -- the growth rate is still faster than silicon growth rate. The wafer's revenues growth rate stays the same, okay? Still that statement is still valid. The gross margin, that's another consideration. The gross margin of the back-end business actually is lower today, still lower than the wafer margin. But we look at it whether it's a good business to go or not on 2 factors. One, we really want to support our customer to improve their system performance. So we have to do it because of TSMC is the only one company right now who can support customers' advanced packaging. Second actually is the CapEx intensity on the back end, and that's advanced packaging business, is smaller. And so the asset turnover is better. So put all in all together, we still think it's a very good business to pursue.

對先進封裝業務的預測是，成長率仍快於矽的成長率。晶圓的收入成長率保持不變，好嗎？但該聲明仍然有效。毛利率是另一個考慮因素。目前後端業務的毛利率實際上較低，仍低於晶圓利潤。但我們根據兩個因素來判斷這是否是一門好生意。首先，我們確實希望支援我們的客戶提高他們的系統效能。所以我們必須這麼做，因為台積電是目前唯一一家能夠支援客戶先進封裝的公司。第二，實際上是後端的資本支出強度，即先進封裝業務，較小。因此資產週轉率較好。總而言之，我們仍然認為這是一項非常值得追求的業務。

Yes. And last one, this is a quick one maybe for CFO. Because you revised up your CapEx, right, so what is the free cash flow trend in the coming quarters? I guess we want to know potential -- the next potential quarterly dividend hike. What would be the timing?

是的。最後一個，對於 CFO 來說這可能是一個快速的問題。因為您上調了資本支出，對吧，那麼未來幾季的自由現金流趨勢如何？我想我們想知道潛力——下一次潛在的季度股息成長。時間是什麼時候？

Let me just answer it by saying that we will not lower our dividends quarter-on-quarter basis. So investor will get at least the same amount, if not more, compared to previous quarter or compared to previous year.

我只想回答說，我們不會逐季降低股利。因此，與上一季或去年相比，投資者獲得的金額至少相同，甚至更多。

Okay. How about the base, I mean, the free cash flow projection? Do you have the number for coming quarters?

好的。基礎怎麼樣？我的意思是，自由現金流預測如何？您有未來幾季的數字嗎？

Yes. We do. But I don't think that really matters to your question.

是的。是的。但我認為這對你的問題來說並不重要。

If I may, I would like to remind Charlie that today, all our shareholders are getting the $2 per share dividends today going into their bank account. And we have already announced that the next quarter -- quarterly dividend is going to be $2.50. So it has already gone up.

如果可以的話，我想提醒查理，今天，我們所有的股東都將獲得每股 2 美元的股息，這些股息將存入他們的銀行帳戶。我們已經宣布下一季的季度股息將為 2.50 美元。所以它已經上漲了。

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

下一個問題來自高盛的 Bruce Lu。

Can I ask, what is your 5G penetration forecast about 6 months ago? 5G smartphone penetration forecast 6 months ago.

請問一下，您大約 6 個月前對 5G 普及率的預測是多少？6個月前對5G智慧型手機普及率的預測。

Six months ago, we don't see the 5G smartphone will be any significant amount for this year. And so...

六個月前，我們預計今年 5G 智慧型手機的銷售不會有顯著成長。所以...

No. I mean, 6 months ago, what's your forecast for 5G smartphone shipment in 2020?

不。我的意思是，6 個月前，您對 2020 年 5G 智慧型手機出貨量的預測是多少？

Oh, single digit.

哦，個位數。

So basically, you increase it from single digit to mid-teens?

那麼基本上，您將其從個位數增加到十幾歲？

Mid-teens. Yes.

十幾歲。是的。

For the past 6 months?

過去 6 個月？

Yes.

是的。

Can you tell us what is the rationale behind your changes? Because for the past 6 months, we still have a lot of concern for the 5G smartphone such as NSA/SA that the specs not finalized, the cost structure is getting a lot higher, global telcos they are not as aggressive. So can you -- because from single-digit to mid-teens, which is the big changes.

您能告訴我們您做出這些改變的理由是什麼嗎？因為在過去的 6 個月裡，我們仍然對 5G 智慧型手機有很多擔憂，例如 NSA/SA，其規格尚未最終確定，成本結構變得越來越高，全球電信業者並不那麼積極。你也可以——因為從個位數到十幾歲，這是一個巨大的變化。

Right. It's a big change. And all I can say is whether it's NSA, SA or those kind of 5G's base station installation, we work with our customer. Actually, we listen to them. And they also have their own customer to consider. And so some of the areas in the world, they accelerated 5G's deployment and that's why its result as compared with 6 months ago, we did not see this momentum. But then in these 6 months, the momentum has grown bigger and bigger and so that's why we -- I cannot give you the specific number of which country or which region, but we can see the momentum continue to grow. And now our own estimate had almost doubled.

正確的。這是一個巨大的改變。我只能說，無論是 NSA、SA 還是那種 5G 基地台安裝，我們都會與客戶合作。事實上，我們聽取了他們的意見。他們也要考慮自己的客戶。因此，世界上一些地區加快了5G的部署，這就是為什麼與6個月前相比，我們沒有看到這種勢頭。但在這六個月裡，這種勢頭越來越大，這就是為什麼我們——我無法給出哪個國家或哪個地區的具體數字，但我們可以看到這種勢頭持續增長。而現在我們自己的估計幾乎翻了一番。

But the concern is still there from a lot of investors, such as the NSA or SA because you still cannot see the clear indication from -- at the end of the day from the telcos, right? So that's why we are a bit surprised to see these kind of meaningful changes, right?

但許多投資者，例如 NSA 或 SA，仍然感到擔憂，因為你仍然無法從電信公司看到明確的跡象，對嗎？所以這就是為什麼我們對看到這些有意義的變化感到有點驚訝，對嗎？

Yes. I have no way to comment on the carrier how they think about this kind of 5G deployment. But they are moving ahead and -- for the 5G application, especially some of the big countries. That's what we see.

是的。我無法評論運營商如何看待這種 5G 部署。但他們正在推動 5G 應用，尤其是一些大國。這就是我們所看到的。

Okay. My next question is that we always rely on management to comment about the fabless inventories. I mean you always talk about that. But moving forward, your top 2 customer, it might account for 30%, 40% of your business pretty soon. And they might account for 70%, 80% of your advanced geometry and they don't really report their inventory anyway. So how -- can you give us something -- some other indicator for us to judge the industry growth or judge the inventory level for the industry?

好的。我的下一個問題是，我們總是依靠管理層對無晶圓廠庫存發表評論。我的意思是你總是談論這個。但展望未來，您的前兩大客戶可能很快就會占到您業務的 30% 到 40%。它們可能占到你高級幾何的 70% 到 80%，而且他們實際上並沒有報告他們的庫存。那麼，您能否提供我們一些其他指標來判斷產業成長或判斷產業的庫存水準？

Judge for the industry level, we -- the fabless company is still one of the big factor that we consider. As for my customers, actually for TSMC more importantly, we really work with our customers closely, so I'm not going to give you the exact number of my big customers' inventory, but we work with them. Believe me, we very closely work together so we understand their strategy and their inventory.

從產業層面來判斷，無晶圓廠公司仍是我們考慮的重要因素之一。至於我的客戶，實際上對於台積電來說更重要的是，我們確實與客戶密切合作，所以我不會告訴你我的大客戶庫存的確切數量，但我們與他們合作。相信我，我們密切合作，所以我們了解他們的策略和庫存。

That's why I wanted you to give us some hint, right? We cannot just tell my investors that we have to trust TSMC. Even though I say that all the time but...

這就是為什麼我希望你給我們一些提示，對嗎？我們不能只是告訴我的投資者我們必須信任台積電。儘管我一直這麼說，但......

You can trust TSMC. No doubt about it.

您可以信賴台積電。毫無疑問。

All right. I think this is probably about the right time that we go to the lines for questions. I think there are quite a few analysts waiting on the line for questions. So operator, could you please go to the first person on the line? Thank you.

好的。我認為現在可能是我們去回答問題的最佳時機。我認為有不少分析師正在等待提問。接線生，請您接通電話給第一位接線員好嗎？謝謝。

Yes. We have questions from Brett Simpson from Arete Research.

是的。我們收到了來自 Arete Research 的 Brett Simpson 的提問。

I had a question really on China. I guess in the last couple of years, we've seen the business double with Chinese customers. I guess at the moment, it's pretty clear you're going through a very healthy inflection point in the Chinese customers at the moment. So can you talk about how you see this part of the business evolving over the next 1 or 2 years?

我確實有一個關於中國的問題。我想在過去的幾年裡，我們看到與中國客戶的業務量翻了一番。我想目前，很明顯你們正在經歷中國客戶的一個非常健康的轉折點。那麼，您能談談您認為未來 1 到 2 年這部分業務將如何發展嗎？

And then I guess from a planning perspective, are you concerned that the rise of your China business comes at the sacrifice of other customers, particularly U.S. companies?

那麼我想從規劃的角度來看，您是否擔心中國業務的成長是以犧牲其他客戶，特別是美國公司為代價的？

Can you repeat the question?

你能重複一下這個問題嗎？

Brett, your question is with respect to the business we derive from China as you have observed that our business has doubled in the last couple of years from China. And you would like to see the outlook for our business in China in the next 1 to 2 years. And also the strong growth coming from China, whether it is coming at the expense of our other customers in other regions.

布雷特，您的問題是關於我們從中國獲得的業務，正如您所觀察到的，我們在過去幾年裡從中國獲得的業務翻了一番。您想了解未來1到2年我們在中國的業務前景。還有來自中國的強勁成長，無論這是否是以犧牲我們在其他地區的其他客戶為代價的。

Well, we did see the strong growth from China because that's a very big market, especially in the semiconductor area. And we are happy to see that growth, and TSMC is offering the most leading-edge technology to support our customer in China. And so to be exact, we are going to grow with the China market. At the expense of other customer, the answer is no because we support all the customer with all our strength and our capacity.

嗯，我們確實看到了來自中國的強勁成長，因為這是一個非常大的市場，尤其是在半導體領域。我們很高興看到這種成長，台積電正在提供最前沿的技術來支援我們在中國的客戶。確切地說，我們將與中國市場共同成長。以犧牲其他客戶為代價，答案是否定的，因為我們竭盡全力支持所有客戶。

Okay. And maybe just a follow-up on 5-nanometer specifically. I guess maybe you can talk about whether you think the ramp of the 5-nanometer will be similar to prior nodes in wafer terms or revenue. How should we think about the ramp-up, particularly as you get through into the second half of 2020?

好的。也許只是 5 奈米的後續研究。我想也許您可以談談您是否認為 5 奈米的提昇在晶圓或收入方面將與先前的節點相似。我們應該如何看待這種成長，尤其是當你進入 2020 年下半年時？

And on your CapEx increase, I think you've said in the past you want to -- you plan to grow -- you've been quite consistent. You want to grow your top line 5% to 10%, but your capital intensity to support that growth would be around about 30 or maybe even low 40s as a percent of sales. Now you're stepping up your capital intensity significantly, but you're not changing your growth outlook. Can you perhaps just explain the thinking there?

關於您的資本支出增加，我想您過去曾說過您想要—您計劃成長—您一直非常堅持。您希望將營業收入成長 5% 至 10%，但支持此成長的資本強度將達到銷售額的 30% 左右，甚至 40% 出頭。現在，您正在大幅提高資本密集度，但並沒有改變成長前景。您能否解釋一下其中的想法？

So first part of the question is with respect to 5-nanometer ramp, whether the ramp profile next year will be similar to our prior nodes' ramp profile.

因此，問題的第一部分是關於 5 奈米坡道，明年的坡道輪廓是否會與我們先前節點的坡道輪廓相似。

The second question is related to the substantial increase in the CapEx. Because in the past, TSMC has indeed said that we could have $10 billion to $12 billion CapEx to support a 5% to 10% CAGR. Now our CapEx is substantially higher than the $10 billion to $12 billion. And therefore, does that mean that it's going to support a much higher CAGR on the revenue growth?

第二個問題與資本支出大幅增加有關。因為過去台積電確實說過，我們可以有100億到120億美元的資本支出來支持5%到10%的複合年增長率。現在我們的資本支出大大高於 100 億至 120 億美元。那麼，這是否意味著它將支持更高的收入成長複合年增長率？

Well, let me answer the first question first, the 5-nanometer's ramp for next year. Certainly as compared with 6 months ago, we are right now more aggressive and more optimistic about it. And hopefully, because we spend big money, hopefully, that it will ramp up much in terms of revenue, be much faster than 7-nanometer. In next January, we are going to talk about it more.

好吧，讓我先回答第一個問題，明年 5 奈米的提升。當然，與六個月前相比，我們現在對此更加積極、更加樂觀。而且我們希望，因為我們投入了大筆資金，所以希望它的收入能夠大幅增加，速度比 7 納米快得多。明年一月，我們將會進一步討論這個問題。

And so that also answers the second question, that we spend -- we increased the CapEx quite a lot, of course, from $10 billion to $11 billion to about $14 billion to $15 billion. With that money, we spend to buy the tools to prepare everything. We do expect that our growth will go beyond 5% to 10%. But right now, we are not ready to change that long-term 5-year's target yet. However, we are working on that.

這也回答了第二個問題，我們的支出——當然，我們的資本支出增加了不少，從 100 億美元到 110 億美元增加到 140 億美元到 150 億美元左右。我們用這筆錢購買工具來準備一切。我們確實預計我們的成長率將超過5%至10%。但目前，我們還沒有準備好改變這個長期的5年目標。不過，我們正在努力。

Operator, please go to the next caller on the line.

接線員，請接聽下一位來電。

Your question comes from the line of Mehdi Hosseini from SIG.

您的問題來自 SIG 的 Mehdi Hosseini。

A couple of follow-ups. When you made the reference to 5G, how should we think about opportunities from the networking, specifically base station?

一些後續行動。當您提到 5G 時，我們應該如何看待網路（特別是基地台）帶來的機會？

Thanks for the detailed color on the smartphone units, you expect a mid-teen penetration. But how would you quantify opportunities from the networking, specifically base station? And I have a couple of follow-ups.

感謝智慧型手機設備上的詳細色彩，您期待青少年的滲透率。但是您如何量化網路（特別是基地台）帶來的機會？我還有一些後續問題。

So Mehdi, your question is that although we have talked about 5G smartphone units for next year, but you would like for our management to talk about the 5G base station business next year.

那麼 Mehdi，你的問題是，雖然我們已經討論了明年的 5G 智慧型手機業務，但您希望我們的管理層討論明年的 5G 基地台業務。

Actually, the networking is fundamental for the 5G's infrastructure. And because of its shorter wavelength, so that you can expect that the base station will be much more than 4G's base station under SA or even the -- for the NSA's implement. So we expect the networking processor will be much higher. The opportunity will dramatically increase. Whether it is exactly for the number, we don't have an exact number right now.

事實上，網路是5G基礎設施的基礎。而且由於其波長較短，因此你可以預期，在 SA 甚至 NSA 實施下，基地台的數量將遠遠超過 4G 基地台。因此我們預期網路處理器的效能將會更高。機會將會大大增加。至於具體數字是多少，我們現在還沒有一個確切的數字。

Is networking included in the HPC category?

網路是否包含在 HPC 類別中？

Yes.

是的。

Okay. So the reason I ask this question is if your customers are building specifically a 5G smartphone, could opportunities in networking actually help offset any downside risk to excess inventory built on the smartphone?

好的。所以我問這個問題的原因是，如果你的客戶正在專門製造 5G 智慧型手機，那麼網路方面的機會是否真的可以幫助抵消智慧型手機庫存過剩帶來的下行風險？

I think, Mehdi, you are asking whether or not the increasing demand in the networking side will offset the higher inventory or the inventory correction on the smartphone side. Is that your question?

我認為，Mehdi，您問的是網路方面不斷增長的需求是否會抵消智慧型手機方面的更高庫存或庫存調整。這是你的問題嗎？

Yes. If there is an inventory, I'm trying to understand how networking could offset any risk of inventory built.

是的。如果有庫存，我想了解網路如何抵消建立庫存的任何風險。

I did not catch what you say. The relation between the networking or the base stations are set up with the 5G smartphones inventory.

我沒聽清楚你說什麼。網路或基地台之間的關係是與 5G 智慧型手機庫存建立的。

Sorry, let me clarify. I think one of the concerns among the investment community is, yes, there is a very strong build plans for the 5G smartphone, but the risk is these phones are too expensive and perhaps there is a risk that your customers' build plans are too aggressive. In that context, could opportunities on the networking side be large enough for TSMC to help alleviate any downside risk on the phone -- or excess inventory on the phone side?

抱歉，讓我澄清一下。我認為投資界的一個擔憂是，是的，5G 智慧型手機的生產計劃非常強勁，但風險在於這些手機太貴了，而且客戶的生產計劃可能過於激進。在這種背景下，網路方面的機會是否足夠大，以致於台積電能夠幫助緩解手機方面的任何下行風險——或者手機方面的過剩庫存？

Oh, I see. Okay. Let me repeat your questions. You say that my customers are making the smartphone quite a large number. If the base station or networking did not catch up, is that smartphone going to be inventory? The answer is no because of the 5G's application will be implemented. And you bought a 5G smartphone, you still can use 4G's functionality, by the way. So it won't be a kind of inventory as you mentioned about it provided you have just not enough 5G's base station.

我懂了。好的。讓我重複一下你的問題。你說我的客戶製造智慧型手機的數量相當多。如果基地台或連網沒跟上，那智慧型手機是不是就要成為庫存了？答案是否定的，因為5G的應用將會實現。順便說一句，你買了 5G 智慧型手機，你仍然可以使用 4G 的功能。所以，如果5G基地台不夠，就不會出現你說的那種庫存。

So Mehdi, I think what C.C. is saying is that you don't have to worry too much about 5G smartphone inventory because there will be sufficient demand to take up those products.

所以 Mehdi，我認為 C.C.意思是說，你不必太擔心 5G 智慧型手機庫存，因為有足夠的需求來滿足這些產品。

Yes. And then just a real quick follow-up. In the past, you have talked about advanced packaging accounting for high single digit of overall revenue in 2019 and that mix would grow into the teens in the next decade. Are those targets remain intact?

是的。然後只是一個真正快速的跟進。過去，您曾談到先進封裝在 2019 年整體收入中所佔比例將達到高個位數，並且在未來十年內這一比例將增長到十幾位。這些目標是否仍然完好？

Advanced packaging used to account for about high single-digit percent of TSMC's revenue. Mehdi's question is, will that continue to increase to maybe high teens of TSMC's revenue?

先進封裝業務過去佔台積電總收入的約個位數百分比。Mehdi 的問題是，這個數字是否會繼續成長至台積電收入的十幾個百分點？

It will continue to increase, but it's not a high teens. It's still the high single digit, but the growth rate is higher than the silicon wafer's growth rate.

它還會繼續增加，但不會達到十幾歲的水平。雖然仍是較高的個位數，但成長率高於矽片的成長率。

Okay. And is cryptocurrency stable? Should we be concerned that maybe some of this growth is driven by crypto? Or do you see crypto as pretty stable and minimal downside risk?

好的。加密貨幣穩定嗎？我們是否應該擔心這種成長可能是由加密貨幣推動的？還是您認為加密貨幣相當穩定且下行風險極小？

All right. You are talking about cryptocurrency mining. We did see the Bitcoin's prices increase starting from this year until now. However, let me state TSMC's policy and strategy. We will support cryptocurrency mining as a business with available capacity. That's what we will say. We are not going to be adding more CapEx for that.

好的。您正在談論加密貨幣挖礦。我們確實看到比特幣的價格從今年到現在一直在上漲。不過，我先說一下台積電的政策和策略。我們將以可用容量支援加密貨幣挖礦業務。這就是我們要說的。我們不會為此增加更多的資本支出。

Operator, could you please go to the next caller on the line?

接線生，您能接聽下一位來電嗎？

Your next question comes from the line of Sangam Iyer from Consilium.

您的下一個問題來自 Consilium 的 Sangam Iyer。

I just want to understand, given the different developments that are happening in Hong Kong and the elections that you're having in Taiwan next semester -- next calendar year, do you see that you might have to revisit the CapEx plan given the trade war and the intensity of the trade wars that are increasing?

我只是想了解一下，鑑於香港正在發生的不同事態發展以及下學期（下個日曆年）台灣將舉行的選舉，您是否認為，鑑於貿易戰和貿易戰的激烈程度不斷增加，您可能需要重新審視資本支出計劃？

You think about the trade war between the 2 big countries, is that going to affect TSMC's CapEx plan? We...

您想想兩個大國之間的貿易戰，這會影響台積電的資本支出計畫嗎？我們...

Yes, in terms of...

是的，就...而言

In terms of Hong Kong situation or what do you think about it? Let me say again, TSMC builds capacity working closely with customer to meet customers' demand and our own judgment. We did not put that kind of trade tension in the world into consideration, although we think that any trade tension or trade war between any countries will have a negative impact to the semiconductor industry. Did I answer your question?

對於香港的情況或您有什麼看法？我再說一遍，台積電與客戶密切合作，提高產能，以滿足客戶的需求和我們自己的判斷。我們沒有考慮到世界上的那種貿易緊張局勢，儘管我們認為任何國家之間的貿易緊張或貿易戰都會對半導體產業產生負面影響。我回答你的問題了嗎？

Right. But I mean there's no -- so hypothetically, if you were to believe that in the election that comes in -- presidential election in January, if things were to go towards the party that's in more favor of a one-state kind of thing, would that have an incremental impact in terms of how the trade war is seen from TSMC's perspective?

正確的。但我的意思是，沒有——所以假設，如果你相信在即將到來的選舉中——一月份的總統選舉中，如果事情朝著更傾向於一國制的政黨的方向發展，那麼從台積電的角度來看，這是否會對貿易戰產生漸進的影響？

No, we don't think so. Even we have general election in the next January, that won't affect TSMC's strategy. That will -- because of -- we can -- we do the business according to the demand, according to the market situation and have very little impact from the politics in Taiwan. Did I answer the question?

不，我們不這麼認為。即使明年一月舉行大選，也不會影響台積電的策略。這是因為，我們可以根據需求、根據市場狀況開展業務，而很少受到台灣政治的影響。我回答問題了嗎？

Good to hear that. And sir, finally -- yes. Yes. Yes. To a large extent, yes. That was helpful.

很高興聽到這個消息。先生，最後——是的。是的。是的。從很大程度上來說，是的。這很有幫助。

And so one more thing, sir. In terms of the 5G CapEx that we have been talking about, so there have been -- on the high-speed HPC segment, there have been delays in terms of the next node coming through from your last customer. When you see that your 5G rollout is moving pretty strong and also the HPC demand pick up strongly, is there any indication from the customers that the launch on the next node is going to be pretty soon? What gives us visibility here?

還有一件事，先生。就我們一直在談論的 5G 資本支出而言，在高速 HPC 領域，來自上一個客戶的下一個節點出現了延遲。當您看到 5G 部署進展順利，並且 HPC 需求強勁成長時，客戶是否有跡象表明下一個節點的發布即將到來？什麼讓我們在這裡能夠看到？

Let me try to see if I understand your question. You are asking us about the visibility of our customers' demand for our next node technology, how much visibility we have with respect to seeing the demand from them for the next node.

讓我試著看看我是否理解了你的問題。您詢問我們客戶對我們下一個節點技術的需求的可見性，我們對客戶對下一個節點的需求有多大可見性。

Right.

正確的。

Next node, you're mentioning about 5-nanometer and 3-nanometer?

下一個節點，您提到的是 5 奈米和 3 奈米嗎？

5-nanometer.

5奈米。

5-nanometer for now.

目前是5奈米。

Let's say 5-nanometer. Judging from we increased the CapEx for the 5-nanometer, you know our position and you know our forecast on the 5-nanometer's business. So it will be good. And I cannot tell you how many percentage more, but I think the 5-nanometer, TSMC is going to do a very good job and going to have a high market share.

假設是 5 奈米。從我們增加 5 奈米的資本支出來看，您了解我們的立場，也了解我們對 5 奈米業務的預測。所以這會很好。我無法告訴你增加多少百分比，但我認為台積電在 5 奈米方面將會做得很好，並且擁有很高的市場份額。

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

接線員，讓我們接聽下一位來電。

Your next question comes from the line of [Susie Chu] from S&P Global.

您的下一個問題來自標普全球的[Susie Chu]。

I just have a brief question for -- on the China issue. I was wondering, is there any change in the numbers of your Chinese clients in recent years, especially in this year? And if it is possible that we can get a number of the Chinese customers or the percentage of the Chinese customers as of the total clients.

我只想問一個關於中國問題的簡短問題。我想知道，近年來，特別是今年，你們的中國客戶數量有什麼變化嗎？並且我們是否可以得到中國客戶的數量或中國客戶佔總客戶數的百分比。

The number of customers in China actually is more than 100. So it changes -- some of them changes all the time. Of course, there are some bigger ones and smaller ones. I'm not sure if this is your question.

中國的客戶數量實際上有100多個。所以它會發生變化——其中一些會一直改變。當然，也有大的，也有小的。我不確定這是否是你的問題。

Yes. Sure. Just is there any change on this number in this year?

是的。當然。那麼今年這個數字有改變嗎？

The number of customers generally increases.

顧客數量普遍增加。

It increases. And may we know the portion of the Chinese customers in terms of your overall customers or the percentage?

它增加了。我們是否可以知道中國客戶佔你們整體客戶的比例或百分比？

Oh, you mean the revenue or number of customers?

哦，你是指收入還是顧客數量？

The number of customers. The number of customers.

顧客數量。顧客數量。

The number of customers.

顧客數量。

Oh, we have over 400 active customers globally. And if you look at China, if it's somewhere over 100, that gives you an idea. Does that answer your question?

哦，我們在全球有超過 400 個活躍客戶。如果你看看中國，如果這個數字超過 100，你就會有一個概念。這回答了你的問題嗎？

Yes. Yes. Very helpful. Yes, that's all my questions.

是的。是的。非常有幫助。是的，這就是我所有的問題。

Okay. Thank you. Do we have any questions on the floor? Okay, let me come back to the floor.

好的。謝謝。我們還有任何問題嗎？好的，讓我回到正題。

First of all, we will have a follow-up question from Citigroup's Roland Shu.

首先，花旗集團的 Roland Shu 將提出一個後續問題。

I would like to follow up on the inventory question. However, this is for your own inventory. I look at in 3Q, your inventory level actually have decreased to 97 billion even though we had a very strong revenue in 3Q and a very upbeat guidance in 4Q. So the wafer in process should increase. However, overall inventory decreased a lot. So does that mean that our finished goods and also even for our materials like the wafer, inventory had decreased a lot?

我想跟進庫存問題。不過，這是您自己的庫存。我看第三季度，儘管我們第三季度的收入非常強勁，第四季度的預期也非常樂觀，但你們的庫存水準實際上已經下降到 970 億美元。因此在製品晶圓數量應該會增加。但整體庫存下降較多。那麼這是否意味著我們的成品甚至晶圓等材料的庫存已經減少了很多？

And you are right. Actually, let me -- suppose that the process actually enlarged, the total inventory should increase, but it decreased. It's because of some of the wafer, we worked with our customer at the beginning of this year. We produced it in early stage to make sure that we don't have a wafer crowded at the end of this year and then we ship it out. And so the inventory actually decreased quite a lot because of that.

你是對的。實際上，讓我——假設這個過程實際上擴大了，總庫存應該增加，但它減少了。這是因為一些晶圓，我們在今年年初與客戶進行了合作。我們在早期就進行了生產，以確保今年年底晶圓不會擁擠，然後再將其運出。因此庫存實際上減少了​​很多。

Being the finished goods?

是成品嗎？

Yes, finished goods.

是的，成品。

Okay. Yes. How about for the wafers? I mean for the raw wafer inventory.

好的。是的。那麼薄餅怎麼樣呢？我指的是原始晶圓庫存。

The raw wafer almost stayed the same because we prepare -- TSMC's business is increasing. So actually, the raw wafer, we require a lot of amount in preparation for the good business. So it stays the same in terms of percentage -- in terms of days, I'm sorry.

原始晶圓幾乎保持不變，因為我們準備好——台積電的業務正在成長。因此實際上，我們需要大量的原始晶圓來為良好的業務做好準備。因此，就百分比而言（就天數而言），它保持不變，對不起。

Okay. And for the very upbeat outlook next year for the 7-nanometer and 5-nanometer, are we securing all of these wafers for our production next year?

好的。對於明年 7 奈米和 5 奈米的非常樂觀的前景，我們是否能確保所有這些晶圓都能用於明年的生產？

You bet.

當然。

Okay. Okay. And the second question is you announced that your EUV tools have been reached potentially maturity, but how about for the infrastructure? It means that for other component like photoresist, pellicle, photomask or even for this inspection tools, chemical and materials. So yes, we have -- going to have a very fast ramp on 5-nanometer because of very strong demand from a customer, but are there any gating items for this EUV infrastructure will be potentially a risk?

好的。好的。第二個問題是，您宣布您的 EUV 工具已經達到潛在成熟度，但基礎設施如何？這意味著對於光阻、薄膜、光掩模等其他組件，甚至對於這種檢查工具、化學物質和材料。是的，由於客戶需求非常強勁，我們將在 5 奈米上實現非常快速的成長，但是對於這種 EUV 基礎設施來說，是否存在任何潛在的風險？

So far we do not see any gating item. All the infrastructure, actually TSMC, we are prepared. We have a -- we produce our own pellicle. We have a large number of masking capacity and everything. So even photoresist, those kind of thing, we have been taking into account. So we are ready for the -- actually, we are in a high-volume production for the EUV lithography technology. For next year, you have big -- even higher volume, and I can assure you that we are all prepared.

到目前為止我們還沒有看到任何門控項目。所有的基礎設施，其實台積電，我們都準備好了。我們有－我們生產自己的防護薄膜。我們擁有大量的掩蔽能力和一切。因此，即使是光阻之類的東西，我們也一直在考慮。所以我們已經做好準備——實際上，我們正​​在大量生產 EUV 光刻技術。明年，你們的銷售量會更大，甚至更高，我可以向你們保證，我們都準備好了。

Next coming -- next question will be coming from Crédit Suisse, Randy Abrams.

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

Yes. I want to ask because you kind of hinted the utilization still below 90%. So to get to 50%, you need to get utilization up. Could you talk about the 28 node prospects, how you see that? And then also 16 and 12, some of the applications, like we move on, some of the mobile and graphics. So your view on utilization and backfill to hold up that technology node.

是的。我想問一下，因為您暗示利用率仍低於 90%。因此，要達到 50%，您需要提高利用率。能談談 28 個節點的前景嗎？您如何看待它？然後還有 16 和 12，一些應用程序，例如我們繼續前進的一些移動和圖形。那麼，您對利用率和回填以支撐該技術節點有何看法？

Let me answer that question. On 28-nanometers, this technology node right now, I believe, in the industry is overcapacity. And so the utilization is very low, not up to TSMC's expectation. So we prepare a lot of derivative technologies -- specialty technology, let me say that. And we expect 2 years later from now, it will be again in the high utilization, but not today. It takes time to work with a customer and to utilize that capacity.

讓我來回答這個問題。我認為，就 28 奈米這項技術節點而言，目前產業處於產能過剩狀態。因此利用率很低，達不到台積電的預期。因此，我們準備了很多衍生技術——專業技術，我這麼說吧。我們預計兩年後，利用率將再次達到高水平，但不是今天。與客戶合作並利用該能力需要時間。

For 16 and 12 node, today we are still in a very healthy utilization, but we are prepared. And if our competitor is -- continue to increase the capacity just like 28-nanometer's node, we expect a couple of years later, something like that, it will be overcapacity again. So right now, we are prepared all the specialty technology like RF, like even some of the ISP or something like that. So it won't happen to TSMC.

對於 16 和 12 節點，今天我們仍然處於非常健康的利用率，但我們已經準備好了。如果我們的競爭對手繼續增加產能，就像 28 奈米節點一樣，我們預計幾年後，就會再次出現產能過剩的情況。所以現在，我們已經準備好了所有專業技術，像是 RF，甚至一些 ISP 或類似的東西。所以這種情況不會發生在台積電身上。

Okay. The second question, just to ask about the segment revenue. I think into third quarter, mobile and HPC were both going to be strong. The HPC was good, but it wasn't quite as strong. So I'm curious just in that mix, maybe factor for HPC. And then IoT was quite strong. So maybe some of the things you're seeing in that. And then if you could extend to give an outlook for fourth quarter by segment.

好的。第二個問題，只是詢問分部收入。我認為第三季行動和高效能運算都會表現強勁。HPC 很好，但不夠強大。所以我很好奇，在這種組合中，也許是 HPC 的因素。然後物聯網就變得非常強大。所以也許您從中看到了一些東西。然後，您是否可以按細分市場延伸出第四季的展望？

In the fourth quarter, of course, every segment is increased. The HPC itself consists a lot of different market segments that's including network processor, including GPU, including accelerator, including all the cryptocurrency mining. And we expect that HPC will grow significantly in the fourth quarter.

當然，第四季度每個部分都是成長的。HPC 本身包含許多不同的細分市場，包括網路處理器、GPU、加速器以及所有加密貨幣挖礦。我們預計第四季度 HPC 將大幅成長。

Could you give the other segments? I guess do you -- so any lagging and any picking up strongly?

能提供其他片段嗎？我想你也這麼認為——有任何滯後和強勁回升嗎？

Let me give you -- okay. Now IoT, this quarter -- the third quarter of the IoT increased quite a bit. So in the fourth quarter probably it will level off or slightly decrease. While our all other segments will continue to grow.

讓我給你——好的。現在是物聯網，本季——第三季物聯網成長了不少。因此，第四季可能會趨於平穩或略有下降。而我們所有其他部門都將繼續成長。

Next question will be coming from UBS, Bill Lu.

下一個問題來自瑞銀的 Bill Lu。

Yes. If you look at the foundry industry historically, what we typically see is a big node followed by a smaller node, right? And now essentially what you're saying is a big 7 and a big 5. Can you maybe just discuss what you're seeing that is different now versus before? Clearly, TSMC is addressing new markets. I think the demand drivers are different now versus before. But I'm curious as to what you're seeing that is different now.

是的。如果從歷史角度回顧代工產業，我們通常會看到一個大節點之後跟著一個小節點，對嗎？現在您所說的基本上是 7 大和 5 大。您能否討論一下現在看到的東西與以前有什麼不同？顯然，台積電正在開拓新市場。我認為現在的需求驅動因素與以前不同。但我很好奇你現在看到了什麼不同的東西。

You mentioned, big and then followed by a small node. I don't really catch what you mean. But let me say that TSMC introduced a 16-nanometer and then 12 and then 10 and then 7 and then 5.

您提到過，大節點之後接著是小節點。我不太明白你的意思。但我要說的是，台積電推出了 16 奈米，然後是 12 奈米，然後是 10 奈米，然後是 7 奈米，然後是 5 奈米。

Now let's talk about 7 and 5. We are looking at the new market in the 5G because the 5G's requirement on the speed and the power consumption reduction is quite a lot. It's not the same experience that we have before. And so that after the 7-nanometer, all the customers asked us to develop the technology to meet their requirement with higher speed, lower power consumption. So it will be a full node kind of improvement. It's not, say, that a 10% improvement will be good enough.

現在我們來談談7和5。我們正在關注5G中的新市場，因為5G對速度和功耗降低的要求相當高。這與我們以前的經驗不同。因此在 7 奈米之後，所有客戶都要求我們開發技術來滿足他們對更高速度、更低功耗的要求。所以這將是一種完整節點的改進。也就是說，10% 的改善還不夠好。

Now look at our 7-nanometer. We have a 7-nanometer, we have 5 and then we have a 6-nanometer. The 6-nanometer being introduced as kind of for second wave products. But the leading wave of products always at a full node and marching ahead with about a 2 years cadence than we expect.

現在看看我們的 7 奈米。我們有 7 奈米，有 5 奈米，然後還有 6 奈米。6奈米作為第二波產品推出。但領先的產品浪潮總是處於一個完整的節點，並且以比我們預期大約兩年的節奏向前邁進。

Next question will be coming from JPMorgan's Gokul.

下一個問題來自摩根大通的 Gokul。

So if we compare the change in expectations in the last 6 months, would you characterize almost all of it as market growth -- faster market growth of 5G HPC? Or is there any meaningful change that -- in your market share expectation for some of your future nodes as well?

因此，如果我們比較過去 6 個月的預期變化，您是否將幾乎所有這些都描述為市場成長——5G HPC 的更快市場成長？或者，您對未來某些節點的市佔率預期是否也發生了有意義的變化？

Well, compared with 6 months ago, we are a little bit kind of conservative at the time because of our 7-nanometer's utilization is quite low. So we become conservative. But then in these 6 months, a lot of things changed. Let me say that, first, the 5G's momentum is larger than we expected. The second one is we also at the same time, because of our technology offer to the customer, we expand our customers' portfolio. And because of the performance, again, we also expand to new product portfolio. And so now we look at the future, we are more optimistic than 6 months ago, much more.

嗯，與 6 個月前相比，我們當時有點保守，因為我們的 7 奈米利用率相當低。所以我們變得保守。但在這六個月裡，很多事情都改變了。我想說的是，第一，5G的發展動能比我們預期的還要大。第二，由於我們向客戶提供技術，因此我們也同時擴大了客戶的產品組合。而且由於效能出色，我們也再次擴展了新的產品組合。所以現在我們展望未來，我們比六個月前更樂觀。

Any increase in market share that you expect compared to 6 months back?

與 6 個月前相比，您預計市場佔有率會增加嗎？

I cannot comment on that. But it will be increased, right? If you expect.

我無法對此發表評論。但會增加，對嗎？如果你期望的話。

Okay. Quickly on the breadth of customers on N5. I think around this time 1 year or 9 months before N7 ramp-up, you were talking about roughly I think 50 to 100 tape-outs on N7. Could we talk about what is the breadth of number of customers or number of tape-outs on N5 and how do you expect that to progress? And I know that number of tape-outs is not equal to the number of -- or revenue or wafer volume, but I just wanted to understand the breadth of the customer base.

好的。迅速在N5上覆蓋廣大客戶。我認為在 N7 加速推出前 1 年或 9 個月左右，您談論的 N7 上大約有 50 到 100 個流片。我們可以談談 N5 的客戶數量或流片數量是多少嗎？您預計其進展如何？我知道流片數量並不等於收入或晶圓數量，但我只是想了解客戶群的廣度。

Whenever you say that, tape-out is one thing that see that how popular it is, but the more important is high volume products at tape-out. And right now, we have many high-volume products at tape-out. And that is the main reason why we increase our CapEx, high volume. And also in addition to smartphone, there are more market segments that we entered at the end.

無論何時你這麼說，流片都是看它有多受歡迎，但更重要的是流片時的大批量產品。目前，我們有許多大量產品處於流片階段。這就是我們增加資本支出、增加產量的主要原因。而且除了智慧型手機之外，我們最終還進入了更多的細分市場。

Okay. Just one quick follow-up. If you think about N7 family, N7, N7+, N6, is it your expectation that pretty much most of the N7 current customers will eventually end up using N6, N7+? Will most of your capacity eventually be EUV-enabled for N7 as well? Or it will still be some EUV, some still using the current N7?

好的。只需快速跟進一次。如果您考慮 N7 系列、N7、N7+、N6，您是否預期大多數 N7 現有客戶最終都會使用 N6、N7+？你們的大部分產能最終也會為 N7 啟用 EUV 嗎？或者它仍然會是一些 EUV，一些仍然使用當前的 N7？

We still expect some using the EUV and some will still stay in the N7. Because for those customer in the N7, in the 2-year cadence, they moved to N5 already. So they have no reason to go back to use N6. However, as I said, for the second wave of the product, they're using N6 with the benefit of lower die cost and better performance.

我們仍然預期有些會使用 EUV，有些仍將留在 N7 中。因為對於那些 N7 的客戶來說，在兩年的節奏中，他們已經轉移到 N5 了。所以他們沒有理由再回去使用N6。然而，正如我所說，對於第二波產品，他們使用 N6，具有更低的晶片成本和更好的性能優勢。

So we should expect eventually majority will be N6?

那麼，我們應該預期最終大多數會是 N6 嗎？

Yes.

是的。

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

下一個後續問題來自摩根士丹利的 Charlie Chan。

So first of all, I want to follow up Bill's question on the future technology. C.C., you mentioned that there are lots of benefit from power consumption, from performance from 5-nanometer, et cetera. So how about the per transistor cost, right? I remember some of your customers talking about they don't see the benefit from the transistor cost-saving going forward. Do you think that is a true statement?

首先，我想回答比爾關於未來科技的問題。C.C.，您提到 5 奈米在功耗、性能等方面有許多好處。那麼每個電晶體的成本如何呢？我記得你們的一些客戶說過，他們看不到晶體管成本節省在未來帶來的好處。您認為這是正確的陳述嗎？

I still believe the per transistor cost is decreasing because right now, geometry is smaller and smaller. Although for TSMC, we more pay attention to what customer need, right? Because if they need speed, we give them speed. If they need the power -- lower power consumption, we give them the lower power consumption. But higher density is always the one that we are moving into the next-generation technology. So per transistor wise, I did not do a very detailed calculation, but I still think the transistor as a cost is lower.

我仍然相信每個晶體管的成本正在下降，因為現在幾何尺寸越來越小。不過對於台積電來說，我們更關注客戶的需求，對吧？因為如果他們需要速度，我們就會給他們速度。如果他們需要更低功耗的電力，我們就給他們更低功耗的電力。但更高的密度始終是我們邁向下一代科技的目標。因此，就每個晶體管而言，我沒有做非常詳細的計算，但我仍然認為晶體管的成本較低。

Okay. And you also mentioned that for those new tape-out, actually volume is quite big. Can I interpret it in another way? Meaning those smaller customers, they cannot really afford those future technology unless they have a very big volume. You said the right thinking.

好的。您還提到，對於那些新的流片來說，實際上數量相當大。我可以用另一種方​​式來解釋它嗎？這意味著那些較小的客戶，除非他們擁有非常大的數量，否則他們無法真正負擔得起這些未來的技術。你說的想法是對的。

Not really. I mean that depend on their product. Your last question about transistor's cost, let me give you some kind of taste. We improved the logic density by 80%, but I did not charge my customer 80% more. So you know that per transistor cost is lower. And again, in the market, I will say that a product to be successful is more important than you really calculate this improvement, this cost, that cost. Product has to be competitive in the market and so that people will give them the price that they deserve, okay? So not the small customer cannot afford it. Actually some of the small customer, they are working on the CPU kind of performance. They need a very high performance technology that they are working with TSMC.

並不真地。我的意思是這取決於他們的產品。關於晶體管成本的最後一個問題，讓我給你一些參考。我們將邏輯密度提高了 80%，但我並沒有向客戶多收取 80% 的費用。所以你知道每個晶體管的成本較低。再說一次，在市場上，我要說的是，產品的成功比你真正計算這個改進、這個成本、那個成本更重要。產品必須在市場上具有競爭力，這樣人們才會給它們應得的價格，好嗎？所以並不是小客戶無法承受。實際上，一些小客戶正在研究 CPU 的效能。他們需要一種非常高性能的技術，他們正在與台積電合作。

Okay. And next is on EUV, all right? So over the past 3 years, there were some kind of challenge in terms of power, throughput, pellicle, et cetera. So now do you see any kind of new issues, new challenge for EUV? Or from now on it's like a blue sky?

好的。接下來是 EUV，好嗎？因此在過去 3 年中，在功率、吞吐量、薄膜等方面都存在一些挑戰。那麼現在您是否看到 EUV 面臨任何新問題、新挑戰？還是從現在開始它就像一片藍天？

Okay. In TSMC, EUV lithography technology is now in the production stage. But are we happy with that? Not yet. We are still improving availability. We have output power of 250 watts, as we expected. Now we can operate the tool with 250 watts consistently. However, there's still something that we need to improve so that we can improve the throughput, we can improve the availability so you can reduce the cost, continue to improve.

好的。在台積電，EUV微影技術目前已進入量產階段。但我們對此滿意嗎？還沒有。我們仍在提高可用性。正如我們預期的那樣，我們的輸出功率為 250 瓦。現在我們可以持續以 250 瓦的功率操作工具。然而，我們仍需要改進一些事情，以便提高吞吐量，提高可用性，從而降低成本，繼續改進。

So in the interest of time, we will just have the last question that will be coming from CLSA's Sebastian Hou.

因此，為了節省時間，我們只回答來自里昂證券的 Sebastian Hou 的最後一個問題。

I want to follow up. The first one is I want to follow up on EUV. Because overnight, ASML seems to talk about some supply constraints on the EUV tool -- the new EUV tool. So it looks like this guidance -- preliminary expectation for next year EUV unit growth and this seems to be like amazing either. So I wonder what would that impact TSMC? And has TSMC secured what you need for this $14 billion to $15 billion CapEx this year and next year?

我想跟進。第一個是我想跟進 EUV。因為一夜之間，ASML 似乎談到了 EUV 工具（新的 EUV 工具）的一些供應限制。因此，這看起來像是一份指導——對明年 EUV 單位成長的初步預期，這似乎也令人驚嘆。所以我想知道這會對台積電產生什麼影響？台積電今年和明年這140億至150億美元的資本支出是否已經到位？

The answer is yes, we secure whatever we need. We work with ASML very closely and we are ordering all the tools that we need.

答案是肯定的，我們會確保我們需要的一切。我們與 ASML 密切合作，正在訂購我們需要的所有工具。

Okay. So which means that the supply constraints could affect someone else but not us more?

好的。那麼，這意味著供應限制可能會對其他人產生影響，但對我們不會造成太大影響？

I don't want to comment on that.

我不想對此發表評論。

Okay. My second question is that on the -- it looks like there's CapEx step-up this year or next year. When you think about that, the 28-nanometer also saw very strong demand, we continue to build the capacity, but then a couple of years later it turns into the underutilization, overcapacity, although there's some factors that because of the competition and laggards catching up. But how do you see this risk going forward for 7 and 5? And have you considered that whether there will be strong enough second wave or third wave of a demand to backfill this capacity when your current customers migrate into 3 or 2 or whatever it is 3 years from now?

好的。我的第二個問題是──看起來今年或明年的資本支出會增加。想想看，28 奈米的需求也非常強勁，我們繼續建立產能，但幾年後，它變成了利用率不足、產能過剩，儘管有一些因素是由於競爭和落後者的赶超造成的。但是您如何看待 7 和 5 未來面臨的風險？您是否考慮過，當您目前的客戶遷移到 3 年或 2 年或 3 年後，是否會有足夠強勁的第二波或第三波需求來填補這一產能？

To answer your second question first, we do have confidence that a lot of products will fill up TSMC's capacity. Now a few years later, if you compare with the 28-nanometer to 7 to 5, it's not a good comparison because 7 and 5 with EUV, that technology barrier is much, much, much higher than you can expect from the high-K metal gate. And so they are -- anyway, I don't want to comment on my competitor.

先回答你的第二個問題，我們確實有信心很多產品會填滿台積電的產能。現在幾年過去了，如果將 28 奈米與 7 奈米和 5 奈米進行比較，這並不是一個很好的比較，因為 7 奈米和 5 奈米採用 EUV，其技術壁壘比高 K 金屬閘極的預期要高得多。事實確實如此——無論如何，我不想評論我的競爭對手。

Right. Okay. Just last one. It's the last one, I promise, last one. The -- when we look at the CapEx step-up this time, it looks like the company has been staying around like $10 billion on the CapEx, plus/minus $1 billion to $2 billion for a few years right now. If we go back to look at in 2010, when we walked out of the downturn in 2009 and also we -- there's a huge step-up of your CapEx from 2010 in -- or 2009 to 2010, and then we know what happened to TSMC, it's a golden era for TSMC for a couple of years. So now we have another step-up out of the semi downturn in the past 12 months. Do you think there's similarity now or there's been and when you make this bold CapEx decision at this time?

正確的。好的。只剩最後一個了。這是最後一次，我保證，最後一次。當我們查看這次資本支出的成長時，我們發現該公司的資本支出目前幾年一直保持在 100 億美元左右，上下浮動 10 億到 20 億美元。如果我們回顧 2010 年，那時我們走出了 2009 年的低迷期，而且從 2010 年到 2009 年，資本支出大幅增加，然後我們就知道台積電發生了什麼，這是台積電幾年的黃金時代。因此，我們又一次走出了過去 12 個月的半衰退。您認為現在有相似之處嗎？或者當您此時做出這個大膽的資本支出決定時，曾經有過相似之處嗎？

I know what you ask, but let me say that TSMC is getting smarter, definitely. And by the way, that technology barrier is much higher than -- as I said, much higher than 28-nanometer. So we have confidence that the capacity we build is closely -- is a result we closely worked with our customer. And so we decided to increase the capacity at this time with a lot of detailed analysis. And I certainly -- I have confidence that we won't repeat the same kind of error that we did.

我知道你會問什麼，但我要說的是，台積電確實變得越來越聰明了。順便說一句，正如我所說，該技術壁壘比 28 納米高得多。因此，我們有信心，我們所建立的產能是我們與客戶密切合作的結果。因此，我們決定在進行大量詳細分析後增加容量。我當然有信心，我們不會再犯同樣的錯誤。

Actually, not means error. I will say that, that was a very bright and bold decision, capital increase in 2010.

其實，「不」就意味著錯誤。我想說的是，2010 年增資是一個非常明智和大膽的決定。

Oh, thank you. 2010? Yes. I'm sorry. Yes. Those are the 28-nanometer. It's the golden years. Very good, yes.

噢，謝謝。2010年？是的。對不起。是的。這些是 28 奈米。這是黃金歲月。非常好，是的。

Yes. So I was asking whether we could see another view of golden years after this.

是的。所以我問的是，在此之後我們是否還可以看到另一個黃金時代的景象。

Oh, you say that for -- of course. What do you expect?

哦，你這麼說是——當然了。你期望什麼？

Yes. Well, before we conclude our conference, ladies and gentlemen, I would like to announce that important news that the beautiful lady sitting right beside me, Elizabeth, had decided to retire from the company at the end of this year. As you all know, Elizabeth has been with TSMC as Head of Investor Relations for 17 years. 17, that's a long time, isn't it? She's also the head of our public relations for 10 years. And well, the beautiful lady had been called in the public, say, the face of TSMC. TSMC is beautiful also.

是的。好吧，女士們，先生們，在我們的會議結束之前，我想宣布一個重要的消息，坐在我旁邊的美麗女士伊麗莎白決定在今年年底從公司退休。眾所周知，伊莉莎白已在台積電擔任投資者關係主管17年。17，那已經是很長的時間了，不是嗎？她也擔任了我們公共關係主管十年。這位美麗的女士在公眾面前被稱為台積電的代言人。台積電也很漂亮。

In her IR role, Elizabeth has won numerous awards and recognitions all over the world, as an IR -- the best IR Officer. That's in Taiwan, in Asia and in the world. So many of you had been in frequent contact with her, I believe, so you know that she is a brilliant and enthusiastic and energetic lady. And you can definitely sense how much she loves TSMC. In the last many years, she has built a world-class IR team and developed successfully a competent successor who is sitting right there.

在擔任投資者關係 (IR) 職務期間，伊麗莎白在世界各地贏得了無數獎項和認可，被譽為最佳投資者關係官員。這是在台灣，在亞洲，在世界。我相信你們中的許多人都曾與她有過頻繁的接觸，所以你們知道她是一位才華橫溢、熱情洋溢、充滿活力的女士。你一定能感覺到她有多熱愛台積電。在過去的幾年裡，她建立了一支世界一流的投資者關係團隊，並成功培養了一位有能力的繼任者。

On behalf of TSMC, I would like to thank her for all her dedication and contribution to the company's success and wish her the best for her retirement.

我謹代表台積電感謝她為公司的成功所做的一切奉獻和貢獻，並祝她退休後一切順利。

Now ladies and gentlemen, let's ask Elizabeth to give us a few words.

女士們、先生們，現在讓我們請伊莉莎白給我們講幾句話。

Thank you, and thank you very much, C.C. I'm very privileged to have been able to work for TSMC in the last almost 17 years. Under the leadership of our Founder, Dr. Morris Chang, and the current management team, I have witnessed how this company is able to move from strength to strength and still remains true to its mission and its value. I have been blessed with the opportunity to represent this company that I deeply admire in front of the investment community and the press. I have enjoyed every minute of it, and I hope I have served the company well.

謝謝你，非常感謝，C.C.我很榮幸能夠在過去的近17年裡為台積電工作。在我們的創辦人張忠謀博士和現任管理團隊的領導下，我見證了這家公司如何不斷發展壯大，並且始終忠於自己的使命和價值。我很榮幸有機會在投資界和媒體面前代表這家我深深敬佩的公司。我享受在這裡的每一分鐘，並希望我能為公司做出良好的貢獻。

You did.

你做到了。

With all my heart to the investors, to the analysts and to the press, I want to thank you for your friendship and trust. I very much enjoyed our interactions, communications and discussions in the past. And I do hope that you will extend your goodwill to my IR successor, Jeff Su, who has been working closely with me in the last 4 years, and many of you are already familiar with Jeff.

我衷心感謝投資者、分析師和媒體的友誼和信任。我非常享受我們過去的互動、交流和討論。我也確實希望你們能向我的 IR 繼任者 Jeff Su 表達善意，他在過去 4 年裡一直與我密切合作，你們中的許多人已經熟悉 Jeff。

I have had the most wonderful, exciting and rewarding time in my career at TSMC. I'm leaving the company at a time when its future is brighter than ever, and I'm confident that you will continue to derive handsome returns from owning our shares. So with that, let me wish you good fortune and good health, and we will conclude today's conference here.

我在台積電度過了職業生涯中最美好、最激動人心、最有成就感的時光。當我離開公司的時候，公司的未來比以往任何時候都更加光明，我相信您將繼續從持有我們的股票中獲得豐厚的回報。最後，我祝大家好運、身體健康，今天的會議就到此結束。

Thank you.

謝謝。

Thank you.

謝謝。