台積電 ADR (TSM) 2022 Q4 法說會逐字稿

(foreign language) Good afternoon, everyone, and welcome to TSMC's Fourth Quarter 2022 Earnings Conference Call. This is Jeff Su, TSMC's Director of Investor Relations and your host for today. TSMC is hosting our Earnings Conference Call via live audio webcast through the company's website at www.tsmc.com, where you can also download the earnings release materials. If you're joining us through the conference call, your dial-in lines are in listen-only mode.

（外語）大家下午好，歡迎來到台積電2022年第四季度財報電話會議。我是台積電投資者關係總監 Jeff Su，也是今天的主持人。台積電將通過公司網站 www.tsmc.com 以現場音頻網絡直播的方式主持我們的收益電話會議，您還可以從該網站下載收益發布材料。如果您通過電話會議加入我們，您的撥入線路將處於只聽模式。

The format for today's event will be as follows: First, TSMC's Vice President and CFO, Mr. Wendell Huang, will summarize our operations in the fourth quarter 2022, followed by our guidance for the first quarter 2023. Afterwards, Mr. Huang and TSMC's CEO, Dr. C.C. Wei, will jointly provide the company's key messages. Then TSMC's Chairman, Dr. Mark Liu, will host the Q&A session, where all 3 executives will entertain your questions.

今天活動的形式如下：首先，台積電副總裁兼首席財務官黃文德先生將總結我們在 2022 年第四季度的運營，然後是我們對 2023 年第一季度的指導。之後，黃先生和台積電的首席執行官，C.C.博士魏，將共同提供公司的關鍵信息。隨後，台積電董事長劉國強博士將主持問答環節，屆時三位高管將一一解答大家的提問。

As usual, I would like to remind everybody that today's discussions may contain forward-looking statements that are subject to significant risks and uncertainties which could cause actual results to differ materially from those contained in the forward-looking statements. Please refer to the safe harbor notice that appears in 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，這些陳述存在重大風險和不確定性，可能導致實際結果與前瞻性陳述中包含的結果存在重大差異。請參閱我們的新聞稿中出現的安全港通知。

And now I would like to turn the call over to TSMC's CFO, Mr. Wendell Huang, for the summary of operations and the current quarter guidance.

現在我想把電話轉給台積電的首席財務官 Wendell Huang 先生，了解運營總結和當前季度的指導。

Thank you, Jeff. Happy New Year, everyone. Thank you for joining us today. My presentation will start with financial highlights for the fourth quarter and a recap of full year 2022. After that, I will provide the guidance for the first quarter 2023. First quarter revenue decreased 1.5% sequentially in U.S. dollar terms as our business was dampened by the end market demand softness and customers' inventory adjustment despite the continued ramp-up of our industry-leading 5-nanometer technologies. It is at the low end of our previous guidance.

謝謝你，傑夫。祝大家新年快樂。感謝您今天加入我們。我的演講將從第四季度的財務亮點和 2022 年全年的回顧開始。之後，我將提供 2023 年第一季度的指導。第一季度收入按美元計算環比下降 1.5%，因為我們的業務受到儘管我們行業領先的 5 納米技術持續提升，但終端市場需求疲軟和客戶庫存調整。它處於我們之前指導的低端。

In NT dollar terms, revenue increased 2% in the fourth quarter due to a more favorable foreign exchange rate. Gross margin increased 1.8 percentage points sequentially to 62.2% mainly due to a more favorable foreign exchange rate and cost improvement efforts, partially offset by lower capacity utilization.

以新台幣計算，由於更有利的匯率，第四季度收入增長了 2%。毛利率環比增長 1.8 個百分點至 62.2%，這主要是由於更有利的匯率和成本改善措施，部分被較低的產能利用率所抵消。

Total operating expenses accounted for 10.3% of net revenue. Operating margin was 52%, up 1.4 percentage points from the previous quarter. Overall, our fourth quarter EPS was TWD 11.41 and ROE was 41.7%.

總運營費用占淨收入的10.3%。營業利潤率為 52%，較上一季度上升 1.4 個百分點。總體而言，我們第四季度的每股收益為 11.41 新台幣，淨資產收益率為 41.7%。

Now let's move on to the revenue by technology. 5-nanometer process technology contributed 32% of wafer revenue in the fourth quarter while 7-nanometer accounted for 22%. Advanced Technologies defined as 7-nanometer and below, accounted for 54% of wafer revenue.

現在讓我們繼續討論技術收入。 5 納米工藝技術在第四季度貢獻了 32% 的晶圓收入，而 7 納米佔 22%。定義為 7 納米及以下的先進技術佔晶圓收入的 54%。

On a full year basis, 5-nanometer technology contributed 26% of 2022 wafer revenue. 7-nanometer was 27%. Advanced Technologies accounted for 53% of total wafer revenue, up from 50% in 2021.

按全年計算，5 納米技術貢獻了 2022 年晶圓收入的 26%。 7 納米為 27%。先進技術佔晶圓總收入的 53%，高於 2021 年的 50%。

Moving on to revenue contribution by platform. HPC increased 10% quarter-over-quarter to account for 42% of our fourth quarter revenue. Smartphone decreased 4% to account for 38%, IoT decreased 11% to account for 8% and Automotive increased 10% to account for 6% and DCE decreased 23% to account for 2%.

繼續討論平台的收入貢獻。 HPC 環比增長 10%，占我們第四季度收入的 42%。智能手機下降 4% 至 38%，IoT 下降 11% 至 8%，汽車增長 10% 至 6%，DCE 下降 23% 至 2%。

On a full year basis, all 6 platforms had year-on-year growth. HPC increased 59% year-on-year to account for 41% of our 2022 revenue. Smartphone increased 28% to account for 39%, IoT increased 47% to account for 9%, automotive increased 74% to account for 5%, and DCE increased 1% to account for 3%.

從全年來看，6 大平台均實現同比增長。 HPC 同比增長 59%，占我們 2022 年收入的 41%。智能手機增長28%，佔比39%，IoT增長47%，佔比9%，汽車增長74%，佔比5%，DCE增長1%，佔比3%。

Moving on to the balance sheet, we ended the fourth quarter with cash and marketable securities of TWD 1.56 trillion or USD 51 billion. On the liability side, current liabilities increased by TWD 137 billion, mainly due to the increase of TWD 48 billion in accounts payable, an increase of TWD 93 billion in accrued liabilities and others.

轉到資產負債表，我們在第四季度結束時擁有 1.56 萬億新台幣或 510 億美元的現金和有價證券。負債方面，流動負債增加新台幣1,370億元，主要是應付賬款增加新台幣480億元，預提負債增加新台幣930億元及其他。

On financial ratios, accounts receivable turnover days remain at 36 days while days of inventory increased 3 days to 93 days.

在財務比率方面，應收賬款周轉天數保持在 36 天，而存貨周轉天數增加 3 天至 93 天。

Regarding cash flow and CapEx, during the fourth quarter, we generated about TWD 487 billion in cash from operations, spent TWD 337 billion in CapEx and distributed TWD 71 billion for first quarter 2022 cash dividend.

關於現金流和資本支出，在第四季度，我們從運營中產生了約 4870 億新台幣的現金，在資本支出上花費了 3370 億新台幣，並為 2022 年第一季度的現金股息分配了 710 億新台幣。

Overall, our cash balance increased TWD 47 billion to TWD 1.34 trillion at the end of the quarter.

總體而言，本季度末我們的現金餘額增加了 470 億新台幣，達到 1.34 萬億新台幣。

In U.S. dollar terms, our fourth quarter capital expenditures totaled $10.82 billion.

以美元計算，我們第四季度的資本支出總額為 108.2 億美元。

To recap our performance in 2022. We had a strong growth in 2022 as our technology leadership position enabled us to capture the industry's megatrends of 5G and HPC. Our revenue increased 33.5% in U.S. dollar terms to reach $76 billion and 42.6% in NT terms to reach TWD 2.26 trillion. Gross margin increased 8 percentage points to 59.6%, mainly reflecting a more favorable foreign exchange rate, value-selling efforts and cost improvement, partially offset by lower capacity utilization. Thanks to better operating leverage, operating margin increased 8.6 percentage points to 49.5%.

回顧我們在 2022 年的表現。我們在 2022 年實現了強勁增長，因為我們的技術領先地位使我們能夠抓住行業 5G 和 HPC 的大趨勢。我們的收入以美元計算增長 33.5% 至 760 億美元，以新台幣計算增長 42.6% 至新台幣 2.26 萬億。毛利率增長 8 個百分點至 59.6%，主要反映更有利的匯率、價值銷售努力和成本改善，部分被較低的產能利用率所抵消。由於更好的經營槓桿，經營利潤率增加了 8.6 個百分點，達到 49.5%。

Overall, full year EPS increased 70.4% to TWD 39.2 and ROE was 39.8%.

整體而言，全年每股盈利增長 70.4% 至新台幣 39.2 元，股本回報率為 39.8%。

On cash flow, we spent USD 36.3 billion or TWD 1.1 trillion in CapEx. We generated TWD 1.6 trillion in operating cash flow and TWD 528 billion in free cash flow. We also paid TWD 285 billion in cash dividends in 2022, up from TWD 266 billion in 2021. I have finished my financial summary.

在現金流方面，我們在資本支出上花費了 363 億美元或 1.1 萬億新台幣。我們產生了 1.6 萬億新台幣的經營現金流和 5280 億新台幣的自由現金流。我們還在 2022 年支付了 2850 億新台幣的現金股息，高於 2021 年的 2660 億新台幣。我已經完成了財務摘要。

Now let's turn to our current quarter guidance. As overall macroeconomic conditions remain weak, we expect our business to be further impacted by continued end market demand softness and customers' further inventory adjustment.

現在讓我們轉向我們當前的季度指南。由於總體宏觀經濟狀況依然疲軟，我們預計我們的業務將進一步受到終端市場需求持續疲軟和客戶進一步庫存調整的影響。

Based on the current business outlook, we expect our first quarter revenue to be between USD 16.7 billion and USD 17.5 billion, representing a 14.2% sequential decline at the midpoint.

根據當前的業務前景，我們預計第一季度收入將在 167 億美元至 175 億美元之間，中值環比下降 14.2%。

Based on the exchange rate assumption of USD 1 to TWD 30.7, gross margin is expected to be between 53.5% and 55.5%, operating margin between 41.5% and 43.5%.

基於1美元兌30.7新台幣的匯率假設，預計毛利率在53.5%至55.5%之間，營業利潤率在41.5%至43.5%之間。

Starting in 2023, certain tax exemptions from the Taiwan government have expired. However, the government has recently passed the amendments to the statute for industrial innovations. All things considered, we expect our effective tax rate in 2023 and beyond to be approximately 15%. This concludes my financial presentation.

從 2023 年開始，台灣政府的某些免稅政策已經到期。然而，政府最近通過了對工業創新法規的修正案。綜合考慮，我們預計 2023 年及以後的有效稅率約為 15%。我的財務報告到此結束。

Now let me turn to our key messages. I will start by making some comments on our fourth quarter '22 and first quarter '23 profitability. Compared to third quarter, our fourth quarter gross margin increased by 180 basis points sequentially to 62.2%, of which 140 basis points was contributed by a more favorable foreign exchange rate. Meanwhile, cost improvement efforts also helped offset the impact from a lower capacity utilization.

現在讓我談談我們的關鍵信息。首先，我將對我們 22 年第四季度和 23 年第一季度的盈利能力發表一些評論。與第三季度相比，我們第四季度的毛利率環比增長 180 個基點至 62.2%，其中 140 個基點得益於更有利的匯率。同時，成本改善措施也幫助抵消了較低產能利用率的影響。

Compared to our fourth quarter guidance, our actual gross margin exceeded the high end of the range provided 3 months ago, mainly due to cost improvement efforts.

與我們第四季度的指導相比，我們的實際毛利率超過了 3 個月前提供的範圍的高端，這主要是由於成本改善的努力。

We have just guided our first quarter gross margin to be 54.5% at the midpoint mainly due to a lower capacity utilization rate as customers further adjust their inventory levels and a less favorable foreign exchange rate.

我們剛剛將第一季度毛利率的中點指引為 54.5%，這主要是由於客戶進一步調整庫存水平和不利的匯率導致產能利用率較低。

In 2023, our gross margin faces challenges from lower capacity utilization due to semiconductor cyclicality, the ramp-up of N3, overseas fab expansion and inflationary cost.

2023年，我們的毛利率面臨半導體週期性導致的產能利用率下降、N3產能提升、海外晶圓廠擴張和成本通脹等挑戰。

In addition, R&D expenses accounted for 7.2% of our net revenue in 2022. In 2023, as we increase our focus on technology development and add more resources, we expect R&D expenses to increase by about 20% year-on-year and account for 8% to 8.5% of our net revenue.

此外，研發費用占我們2022年淨收入的7.2%。2023年，隨著我們加大對技術開發的關注並增加更多資源，我們預計研發費用同比增長約20%，佔我們淨收入的 8% 至 8.5%。

To manage our profitability in 2023, we will work diligently on internal cost improvement efforts while continuing to strategically and consistently sell our value.

為了在 2023 年管理我們的盈利能力，我們將努力改善內部成本，同時繼續戰略性地、持續地銷售我們的價值。

Excluding the impact of foreign exchange rate, we continue to forecast a long-term gross margin of 53% and higher is achievable.

剔除匯率影響，我們繼續預測長期毛利率可達到 53%或更高。

Next, let me talk about our 2023 capital budget and depreciation. Every year, our CapEx is spent in anticipation of the growth that will follow in future years. As I have stated before, given the near-term uncertainties, we continue to manage our business prudently and tighten up our capital spending where appropriate. That said, our commitment to support customers' structural growth remains unchanged, and our disciplined CapEx and capacity planning remains based on the long-term market demand profile.

接下來，讓我談談我們2023年的資本預算和折舊。每年，我們的資本支出都用於預期未來幾年的增長。正如我之前所說，鑑於近期的不確定性，我們將繼續審慎地管理我們的業務，並在適當的時候收緊我們的資本支出。也就是說，我們支持客戶結構性增長的承諾保持不變，我們嚴格的資本支出和產能規劃仍然基於長期市場需求狀況。

In 2022, we spent $36.3 billion to capture the structural demand and support our customers' growth. In 2023, our capital budget is expected to be between USD 32 billion and USD 36 billion. Out of the USD 32 billion to USD 36 billion CapEx for 2023, about 70% will be allocated for advanced process technologies. About 20% will be spent for specialty technologies and about 10% will be spent for advanced packaging, mask making and others.

2022 年，我們花費了 363 億美元來捕捉結構性需求並支持客戶的增長。 2023年，我們的資本預算預計在320億美元到360億美元之間。在 2023 年 320 億美元至 360 億美元的資本支出中，約 70% 將分配給先進工藝技術。約 20% 將用於專業技術，約 10% 將用於先進封裝、掩模製造等。

Our depreciation expense is expected to increase by approximately 30% year-over-year in 2023 mainly as we ramp our 3-nanometer technologies.

預計到 2023 年，我們的折舊費用將同比增長約 30%，這主要是因為我們推出了 3 納米技術。

With this level of CapEx spending in 2023, we reiterate that TSMC remains committed to a sustainable cash dividends on both an annual and quarterly basis. We will continue to work closely with our customers to plan our long-term capacity and invest in leading-edge and specialty technologies to support their growth while delivering profitable growth to our shareholders.

鑑於 2023 年的資本支出水平如此，我們重申台積電仍致力於每年和每季度的可持續現金股息。我們將繼續與客戶密切合作，規劃我們的長期產能並投資於前沿和專業技術，以支持他們的發展，同時為我們的股東帶來盈利增長。

Now let me turn the microphone over to C.C.

現在讓我把話筒交給 C.C.

Thank you, Wendell. Good afternoon, everyone. First, let me start with our 2023 outlook.

謝謝你，溫德爾。大家下午好。首先，讓我從我們的 2023 年展望開始。

Concluding 2022, the semiconductor industry growth excluding memory, was about 10%, while foundry increased about 27% year-over-year. TSMC's revenue grew 33.5% year-over-year in U.S. dollar terms.

到 2022 年，不包括內存在內的半導體行業增長率約為 10%，而晶圓代工同比增長約 27%。台積電以美元計算的收入同比增長 33.5%。

Our business was supported by our strong technology leadership and differentiation, even as a semiconductor inventory correction began to dampen the momentum in second half 2022.

我們的業務得到了我們強大的技術領先地位和差異化的支持，即使半導體庫存調整在 2022 年下半年開始抑制這一勢頭。

Entering 2023, we continue to observe softness in consumer end market segment, while other end market segments such as data center related have softened as well.

進入 2023 年，我們繼續觀察到消費終端細分市場的疲軟，而數據中心相關的其他終端細分市場也有所疲軟。

As customers and the supply chain continue to take action, we forecast the semiconductor supply chain inventory will reduce sharply through first half 2023, to rebalance to a healthier level.

隨著客戶和供應鏈繼續採取行動，我們預測半導體供應鏈庫存將在 2023 年上半年大幅減少，以重新平衡到更健康的水平。

In the first half of 2023, we expect our revenue to decline mid- to high single-digit percent over the same period last year in U.S. dollar terms.

2023 年上半年，我們預計以美元計算，我們的收入將比去年同期下降中高個位數百分比。

Having said that, we also start to observe some initial signs of demand stabilization, and we will watch closely for more signals. We forecast the semiconductor cycle to bottom sometime in first half 2023, and to see a healthy recovery in second half this year.

話雖如此，我們也開始觀察到一些需求穩定的初步跡象，我們將密切關注更多信號。我們預測半導體週期將在 2023 年上半年的某個時候觸底，並在今年下半年出現健康復蘇。

In the second half of 2023, we expect our revenue to increase over the same period last year in U.S. dollar terms.

2023年下半年，我們預計按美元計算，我們的收入將比去年同期有所增長。

For the full year of 2023, we forecast the semiconductor market, excluding memory, to decline approximately 4% while foundry industry is forecast to decline 3%. For TSMC, supported by our strong technology leadership and differentiation, we will continue to expand our customer product portfolio and increase our addressable market, and we expect 2023 to be a slight growth year for TSMC in U.S. dollar terms.

對於 2023 年全年，我們預測半導體市場（不包括內存）將下降約 4%，而代工行業預計將下降 3%。對於台積電來說，在我們強大的技術領導力和差異化的支持下，我們將繼續擴大我們的客戶產品組合併增加我們的目標市場，我們預計 2023 年將是台積電以美元計算的小幅增長的一年。

Next, let me talk about the N7, N6 demand outlook. Three months ago, we set our N7, N6 capacity utilization in first half '23 will not be as high as it has been in the past 3 years. due to end market weakness in smartphone and PCs and customers' product schedule delay. Since then, the end market demand for smartphone and PCs has further weakened and the capacity utilization of N7, N6 is lower than our expectation 3 months ago. We expect this to persist through first half '23 as the semiconductor supply chain inventory takes a few quarters to rebalance to a healthier level, and we expect a mild pickup in our N7, N6 demand in second half '23 than our prior expectation.

接下來說一下N7、N6的需求前景。三個月前，我們將 23 年上半年的 N7、N6 產能利用率設定為不會像過去 3 年那樣高。由於智能手機和 PC 的終端市場疲軟以及客戶的產品計劃延遲。此後，終端市場對智能手機和個人電腦的需求進一步減弱，N7、N6 的產能利用率低於我們 3 個月前的預期。我們預計這種情況將持續到 23 年上半年，因為半導體供應鏈庫存需要幾個季度才能重新平衡到更健康的水平，我們預計 23 年下半年我們的 N7、N6 需求將比我們之前的預期溫和回升。

However, we continue to believe N7, N6 demand is more a cyclical issue rather than structural. We are working closely with our customers to develop specialty and differentiated technologies to drive additional wave of structural demand from consumer, RF, connectivity and other applications to backfill our N7, N6 capacity over the next several years. Thus, we are confident our 7-nanometer family will continue to be a large and long-lasting node for TSMC.

然而，我們仍然認為 N7、N6 需求更多是周期性問題而非結構性問題。我們正在與客戶密切合作，開發專業和差異化技術，以推動來自消費、射頻、連接和其他應用的額外結構性需求浪潮，以在未來幾年內回填我們的 N7、N6 產能。因此，我們有信心我們的 7 納米系列將繼續成為台積電的一個大而持久的節點。

Now I will talk about our N3 and N3E status. Our N3 has successfully entered volume production in late fourth quarter last year as planned with good yield. We expect a smooth ramp in 2023 driven by both HPC and smartphone applications. As our customers' demand for N3 exceeds our ability to supply, we expect the N3 to be fully utilized in 2023. Sizable N3 revenue contribution, we expect to start in third quarter '23 and N3 will contribute mid-single-digit percentage of our total wafer revenue in 2023. We expect the N3 revenue in 2023 to be higher than N5 revenue in its first year in 2020.

下面我說一下我們的N3和N3E狀態。我們的 N3 已按計劃在去年第四季度末成功進入量產，良率良好。我們預計 2023 年將在 HPC 和智能手機應用程序的推動下平穩增長。由於我們的客戶對 N3 的需求超過了我們的供應能力，我們預計 N3 將在 2023 年得到充分利用。N3 的收入貢獻可觀，我們預計從 23 年第三季度開始，N3 將貢獻我們的中個位數百分比2023年晶圓總收入。我們預計2023年N3收入將高於2020年第一年的N5收入。

N3E will further extend our N3 family with enhanced performance, power, and yield and offer complete platform support for both smartphone and HPC applications. Volume production is scheduled for second half '23.

N3E 將通過增強的性能、功率和產量進一步擴展我們的 N3 系列，並為智能手機和 HPC 應用程序提供完整的平台支持。批量生產計劃於 23 年下半年進行。

Despite the ongoing inventory correction, we continue to observe a high level of customer engagement at both the N3 and N3E with a number of tape-outs more than 2x that of N5 in its first and second year.

儘管正在進行庫存調整，但我們繼續觀察到 N3 和 N3E 的客戶參與度很高，第一年和第二年的流片數量是 N5 的 2 倍多。

Our 3-nanometer technology is the most advanced semiconductor technology in both PPA and transistor technology, thus, we expect customers a strong demand in 2023, 2024, 2025 and beyond for our 3-nanometer technologies and are confident that our N3 family will be another large and long-lasting node for TSMC.

我們的 3 納米技術是 PPA 和晶體管技術中最先進的半導體技術，因此，我們預計客戶在 2023 年、2024 年、2025 年及以後對我們的 3 納米技術有強勁需求，並且有信心我們的 N3 系列將成為另一個台積電的大而持久的節點。

Finally, let me talk about our plans to expand TSMC's global manufacturing footprint to increase customers' trust and expand our future growth potential. TSMC's mission is to be trusted technology and capacity provider for the global IC, logic IC industry for years to come. Our job is to provide the optimal solutions for our customers to enable their success. This including technology leadership, manufacturing, cost, trust and recently also including more geographic manufacturing flexibility.

最後，讓我談談我們計劃擴大台積電的全球製造足跡，以增加客戶的信任並擴大我們未來的增長潛力。台積電的使命是在未來幾年成為全球 IC、邏輯 IC 行業值得信賴的技術和能力供應商。我們的工作是為我們的客戶提供最佳解決方案，以幫助他們取得成功。這包括技術領先、製造、成本、信任，最近還包括更多的地理製造靈活性。

Based on customers' request, we are increasing our capacity outside of Taiwan to continue to provide our customers the optimal solution they need to be successful. TSMC's decisions are based on our customers' need and the necessary level of government support. This is to maximize the value for our shareholders. Our decisions are also based on the talent pool, land, electricity and water needs for TSMC's long-term growth.

根據客戶的要求，我們正在增加台灣以外的產能，以繼續為我們的客戶提供他們成功所需的最佳解決方案。台積電的決定基於我們客戶的需求和必要的政府支持水平。這是為了我們股東的價值最大化。我們的決定也是基於台積電長期增長的人才儲備、土地、電力和水的需求。

In the U.S., we are in the process of building 2 advanced semiconductor fabs in Arizona. Our U.S. customers welcome us to build capacity in the U.S. to support their need and have placed their strong commitment and support. We had an opening ceremony on December 6 last year to celebrate the arrival of the first batch of state-of-the-art semiconductor manufacturing equipment, and Fab 1 is on track to begin production of N4 process technology in 2024.

在美國，我們正在亞利桑那州建設 2 座先進的半導體工廠。我們的美國客戶歡迎我們在美國建設能力以滿足他們的需求，並給予了他們堅定的承諾和支持。我們在去年 12 月 6 日舉行了開幕式，慶祝第一批最先進的半導體製造設備的到來，Fab 1 有望在 2024 年開始生產 N4 工藝技術。

We also announced the construction of a second fab, which is scheduled to begin production of 3-nanometer process technology in 2026. TSMC Arizona will continue to provide the most advanced semiconductor technology commercially available in the U.S., enabling next-generation, high-performance and low-power computing products in the future years. Each of our fab will have a clean room area that approximately double the size of a typical logic fab.

我們還宣佈建設第二個晶圓廠，計劃於 2026 年開始生產 3 納米工藝技術。台積電亞利桑那州將繼續提供美國最先進的商用半導體技術，實現下一代高性能以及未來幾年的低功耗計算產品。我們的每個晶圓廠都將擁有一個潔淨室面積，其面積大約是典型邏輯晶圓廠的兩倍。

We will also consider building additional mature node capacity outside of Taiwan. In Japan, we are building a specialty technology fab, which will utilize 12- and 16-nanometer, N22, N28 process technologies. Volume production is scheduled for late 2024. We are also considering building a second fab in Japan, as long as the demand from customers and the level of government support makes sense.

我們也將考慮在台灣以外建立額外的成熟節點能力。在日本，我們正在建設一個專業技術工廠，它將利用 12 和 16 納米、N22、N28 工藝技術。批量生產計劃於 2024 年下半年進行。我們還在考慮在日本建設第二家工廠，只要客戶的需求和政府的支持水平合理。

In Europe, we're engaging with customers and partners to evaluate the possibility of building a specialty fab, focusing on automotive-specific technologies based on the demand from customers and level of government support. In China, we expand 28-nanometer in Nanjing as planned to support local customers, and we continue to follow all the rules and regulation fully. At the same time, we continue to invest in Taiwan and expand our capacity to support our customers' growth.

在歐洲，我們正在與客戶和合作夥伴接洽，以評估建立專業工廠的可能性，並根據客戶需求和政府支持水平專注於汽車專用技術。在中國，我們按計劃在南京擴展 28 納米以支持當地客戶，我們將繼續完全遵守所有規則和法規。同時，我們繼續在台灣投資並擴大產能以支持客戶的增長。

Our N3 has just entered volume production in Tainan Science Park. We are also preparing for N2 volume production starting in 2025, which will be located in Hsinchu and Taichung Science Park.

我們的N3剛剛在台南科學園區量產。我們也正準備從 2025 年開始量產 N2，地點將設在新竹和台中科學園區。

While capacity is not born overnight and takes time to build, we are committed to expanding our global manufacturing footprint to increase customer trust and expand our future growth potential. Depending on the demand from customers and level of government support, our 28-nanometer and below overseas capacity could be 20% or more of our total 28-nanometer and below capacity in 5 years or more time.

雖然產能不是一夜之間誕生的，需要時間來建立，但我們致力於擴大我們的全球製造足跡，以增加客戶信任並擴大我們未來的增長潛力。根據客戶需求和政府支持水平，我們的 28 納米及以下海外產能可能會在 5 年或更長時間內占我們 28 納米及以下總產能的 20% 或更多。

While initial cost of overseas fab are higher than TSMC's fab in Taiwan. Our goal is manage and minimize the cost gap.

而海外晶圓廠的初始成本高於台積電在台灣的晶圓廠。我們的目標是管理和最小化成本差距。

Our pricing will remain strategic to reflect our value, which also including the value of geographic flexibility. At the same time, we are leveraging our competitive advantage of lost volume, economies of scale and manufacturing technology leadership to continuously drive cost down. We will also continue to work closely with our government to secure their support.

我們的定價將保持戰略性以反映我們的價值，其中還包括地域靈活性的價值。與此同時，我們正在利用我們在損失量、規模經濟和製造技術領先地位方面的競爭優勢，不斷降低成本。我們還將繼續與我們的政府密切合作，以獲得他們的支持。

By taking such actions, TSMC will have the ability to absorb the higher cost of overseas fabs while remaining the most efficient and cost-effective manufacturer, no matter where we operate.

通過採取這些行動，台積電將有能力吸收海外晶圓廠的更高成本，同時無論我們在哪裡運營，都能保持最高效、最具成本效益的製造商。

Thus, even we increased our capacity outside of Taiwan, we believe long-term gross margin of [53%] and higher continue to be achievable, and we can earn a sustainable and healthy ROE of greater than 25% while delivering profitable growth for our shareholders. This concluding our key message. Thank you for your attention.

因此，即使我們增加了台灣以外的產能，我們相信 [53%] 和更高的長期毛利率仍然是可以實現的，我們可以獲得超過 25% 的可持續和健康的股本回報率，同時為我們的業務帶來盈利增長股東。這結束了我們的關鍵信息。感謝您的關注。

Thank you, C.C. This concludes our prepared remarks. (Operator Instructions) Now we will begin the Q&A session. Our Chairman, Dr. Mark Liu, will be the host.

謝謝你，C.C.我們準備好的發言到此結束。 （操作員說明）現在我們將開始問答環節。我們的董事長 Mark Liu 博士將擔任主持人。

Hello, everyone. It's good to meet every one of you online again. At the beginning of the year, I wish you all stay healthy and have a happy new year. Now let's have answer your question.

大家好。很高興再次在網上認識你們每一個人。新年伊始，祝大家身體健康，新年快樂。現在讓我們回答你的問題。

Thank you, Chairman. Operator, let's begin, please proceed with the first caller on the line.

謝謝主席。接線員，讓我們開始吧，請接聽線路上的第一個來電者。

The first question is come from Randy Abrams with Credit Suisse.

第一個問題來自瑞士信貸的 Randy Abrams。

Okay. I wanted to ask the first question just about the rising investment costs and also the cost differential with the U.S. Just based on the 2 press releases, the Taiwan fab, you cited Fab 18, about USD 60 billion investment for 8 phases, which would be, I estimate about 200,000 capacity. That's about $300 million per thousand wafer. The Arizona fab was $40 billion for about 50,000, $800 million per 1,000 wafers. So just 2 questions on it. If you could maybe discuss a bit more if there's differences in those releases on the investment in calculation, and a bit more color on the relative costs since you do the U.S. expansion?

好的。我想問第一個問題，就是關於投資成本上升以及與美國的成本差異。就根據兩份新聞稿，台灣晶圓廠，你提到的 Fab 18，大約 600 億美元投資 8 個階段，這將是，我估計大概有20萬的容量。這大約是每千片晶圓 3 億美元。亞利桑那晶圓廠每 1,000 片晶圓約 50,000、8 億美元，價值 400 億美元。所以只有兩個問題。如果這些版本在計算投資方面存在差異，以及自從美國擴張以來相對成本的更多色彩，您是否可以多討論一下？

And then the second part of the question is, is the cost seeing a significant acceleration? It's been rising with each new node. But are you seeing an accelerating pace as you move through 3- and 2-nanometer?

然後問題的第二部分是，成本是否出現顯著加速？隨著每個新節點的出現，它一直在上升。但是，當您通過 3 納米和 2 納米時，您是否看到了加速的步伐？

Okay. Randy, Thank you. Please allow me to summarize your question. So Randy's first question is he wants to understand, I think, he's referring, I think, to our press release when we -- about N3 in Tainan and the total investment there, and how does that compare to our announcement of the investment in Arizona for 2 phases.

好的。蘭迪，謝謝你。請允許我總結一下您的問題。所以蘭迪的第一個問題是他想了解，我認為，我認為他指的是我們的新聞稿——關於台南的 N3 和那裡的總投資，以及這與我們宣佈在亞利桑那州的投資相比如何2 個階段。

Randy, if I got you correctly, basically what Randy is asking is, what is the cost in the U.S. seem much higher in terms of the investment? So what is driving this big difference or a gap, so to speak. That's the first part of your question, right, Randy. Okay. So that's the first part.

蘭迪，如果我沒聽錯的話，基本上蘭迪要問的是，美國的成本是多少？就投資而言似乎要高得多？那麼，是什麼導致了這種巨大的差異或差距，可以這麼說。這是你問題的第一部分，對吧，Randy。好的。這是第一部分。

Yes, that's right. That's the first part.

恩，那就對了。這是第一部分。

Okay. Randy, this is Wendell. Let me share with you this. The Arizona fab. We make the decision based on customers' request. And so we're planning on building the 2 fabs, 1 and 5, actually N4 and the other one N3. We're not able to share with you a specific cost gap number between Taiwan and U.S., but we can share with you that the major reason for the cost gap is the construction cost of building and facilities, which can be 4 to 5x greater for U.S. fab versus a fab in Taiwan.

好的。蘭迪，這是溫德爾。讓我和你分享這個。亞利桑那工廠。我們根據客戶的要求做出決定。因此，我們計劃建造 2 個晶圓廠，1 個和 5 個，實際上是 N4，另一個是 N3。我們無法與您分享台灣與美國之間具體的成本差距數字，但我們可以與您分享成本差距的主要原因是建築和設施的建設成本，它可以比美國高出 4 到 5 倍美國晶圓廠與台灣晶圓廠。

The high cost of construction includes labor cost, cost of permits, cost of occupational safety and health regulations, inflationary costs in recent years and people and learning curve costs. Therefore, the initial cost of overseas fabs are higher than our fabs in Taiwan.

建築的高成本包括勞動力成本、許可證成本、職業安全和健康法規成本、近年來的通貨膨脹成本以及人員和學習曲線成本。因此，海外晶圓廠的初始成本高於我們在台灣的晶圓廠。

And I think the second part of Randy's question was about the -- how do we see the CapEx per K as we go from, I guess, Randy, you're asking N5, N3 and 2.

我認為蘭迪問題的第二部分是關於——我們如何看待每 K 的資本支出，我猜，蘭迪，你問的是 N5、N3 和 2。

Yes, it's seeing a faster pace of expansion through these next couple of nodes.

是的，它正在通過接下來的幾個節點看到更快的擴張速度。

Right. Randy, we're not able to disclose the specific CapEx per K for each node, but certainly, the CapEx is per K is more expensive for a new node as the process capacity increases. Okay?

正確的。蘭迪，我們無法透露每個節點每 K 的具體資本支出，但可以肯定的是，隨著處理能力的增加，新節點的每 K 資本支出會更加昂貴。好的？

Okay. And the second question, just wanted to ask actually 2 areas that came up in the remarks. The R&D, the over 20% increase. If you could give a feel like what's mainly driving that additional step up, is it the development cost for the new nodes, the packaging? Or is it some now expanding R&D into new geographic areas?

好的。第二個問題，實際上只是想問一下評論中提到的兩個方面。研發方面，增幅超過20%。如果你能感覺到是什麼主要推動了額外的進步，是新節點的開發成本，包裝？還是一些公司正在將研發擴展到新的地理區域？

And if I can fit in the second part, just the tax rate, Taiwan was hyping a pretty big program of CapEx and R&D, but tax breaks, but your tax rate is going up from 11% to 15%. Is that alternative minimum tax or global tax? Just want to understand why not any benefit from that?

如果我能說第二部分的話，那就是稅率，台灣正在宣傳一個相當大的資本支出和研發計劃，但是稅收減免，但是你的稅率從 11% 上升到 15%。那是替代最低稅還是全球稅？只是想了解為什麼沒有任何好處？

Okay. So Randy's second question, I guess, is sort of 2 parts financial related. First, we -- our CFO said, our R&D spending will increase about 20% year-on-year. So Randy wants to know what is driving behind that? Is it customer going overseas? Is it more technology development as a technology leader, et cetera? And then the second part, he wants to understand the guidance of effective tax rate of 15% given the recent legislation passed in Taiwan. Why is it not lower?

好的。所以蘭迪的第二個問題，我猜，是兩部分財務相關的。首先，我們——我們的首席財務官說，我們的研發支出將同比增長約 20%。所以蘭迪想知道背後的驅動力是什麼？是去海外的顧客嗎？是作為技術領導者的更多技術開發，等等？然後是第二部分，鑑於台灣最近通過的立法，他想了解 15% 的有效稅率的指導。為什麼不低？

Okay. Randy, for the first question, we're the technology leader, and we intend to continue to maintain the leadership. Therefore, we are devoting more and more resources in R&D, including people and other kind of resources. That's the reason why our R&D expense will increase in 2023 and probably beyond.

好的。蘭迪，對於第一個問題，我們是技術領先者，我們打算繼續保持領先地位。因此，我們在研發上投入越來越多的資源，包括人力和其他資源。這就是為什麼我們的研發費用將在 2023 年甚至更長時間內增加的原因。

The other thing about tax, in 2023, part of the tax exemptions -- or incentives in Taiwan have expired. Without the new amendments to this industrial innovation, the statute of industrial innovation, our tax rate would have become between 18% to 19%. With this new amendment, our tax rates will drop to about 15%.

關於稅收的另一件事是，到 2023 年，台灣的部分免稅或激勵措施已經到期。如果沒有新的產業創新法修正案，產業創新法，我們的稅率會變成18%到19%之間。通過這項新修正案，我們的稅率將降至 15% 左右。

Okay. Does that answer your question, Randy?

好的。這能回答你的問題嗎，蘭迪？

Yes, that does, I mean this mid-term R&D, do you think the rate stays at this level or could go up one more? That's my final one.

是的，就是這樣，我的意思是這個中期研發，你認為比率保持在這個水平還是可以再上升一個？那是我的最後一個。

From what we are seeing at this moment, we expect the R&D to revenue ratio to be between 8% to 8.5% in the next several years.

從我們目前所看到的情況來看，我們預計未來幾年研發與收入的比率將在 8% 至 8.5% 之間。

Thank you, Randy. Operator, can we move on to the next participant, please?

謝謝你，蘭迪。接線員，我們可以轉到下一位參與者嗎？

Sure. And our next question is come from Bruce Lu with Goldman Sachs.

當然。我們的下一個問題來自高盛的 Bruce Lu。

The first question is focused on the overseas capacity expansion. So I think you just mentioned that even though we cannot disclose it, but the cost is definitely higher for the overseas capacity, but the management believes that the margin will stay the same. So I mean -- I think I asked this question back to 2019, the manager was talking about like the pricing will be the same across the board regardless of geographical locations. So what has changed now? So with the different pricing, can we say the overseas capacity will generate a similar return and profitability throughout the cycle? So -- or what is the benchmark you're looking for when you set out the different pricing scheme?

第一個問題是關於海外產能擴張。所以我想你剛才提到，儘管我們不能透露，但海外產能的成本肯定更高，但管理層認為利潤率將保持不變。所以我的意思是——我想我早在 2019 年就問過這個問題，經理說的是無論地理位置如何，定價都將是一樣的。那麼現在發生了什麼變化？那麼在定價不同的情況下，是否可以說海外產能在整個週期內會產生相似的回報和盈利能力？那麼——或者當您制定不同的定價方案時，您正在尋找的基準是什麼？

Okay. So Bruce from Goldman Sachs actually, his question is regarding -- first question regarding overseas expansion. His question is we said overseas costs are higher, yet that -- so his question is in regards to our pricing. Are we a higher price overseas? Or if it's overall? And what is the benchmark that we use when we go overseas in terms of financial returns and price? Is that roughly correct, Bruce?

好的。實際上，來自高盛的布魯斯，他的問題是——第一個關於海外擴張的問題。他的問題是我們說海外成本更高，但是 - 所以他的問題是關於我們的定價。我們在國外的價格更高嗎？或者如果它是整體的？我們出海的回報率和價格的標杆是什麼？這大致正確嗎，布魯斯？

Yes, that's correct.

對，那是正確的。

Okay, Bruce, this is Wendell, we're not able to comment on pricing details, but our pricing is always strategic and consistent to reflect our value. Now value to our customers as C.C. said in his statement includes technology leadership, manufacturing efficiency and quality, cost, trust and recently also includes more geographic manufacturing flexibilities. Therefore, our overall pricing will remain strategic to reflect our value, which includes the value of geographic flexibilities. Does that answer your question?

好的，布魯斯，我是溫德爾，我們無法對定價細節發表評論，但我們的定價始終是戰略性的，並且始終如一地反映我們的價值。現在作為 C.C. 對我們的客戶有價值他在聲明中表示，包括技術領先、製造效率和質量、成本、信任以及最近還包括更多的地理製造靈活性。因此，我們的整體定價將保持戰略性，以反映我們的價值，其中包括地域靈活性的價值。這是否回答你的問題？

Well, to some extent. Let me ask the question in different ways is that we do understand it will reflect TSMC's value, i.e., geographical location is [bad], but at the end of the day, it's the cost plus for everybody across the board. I mean, how confident that TSMC feels that the customers can swallow the cost. And the end customer will swallow the costs, i.e., without triggering the potential wafer price inflation or semiconductor inflation at the end of the day with more and more global capacity for TSMC.

好吧，在某種程度上。讓我以不同的方式問這個問題，我們確實理解它將反映台積電的價值，即地理位置是 [bad]，但歸根結底，這對所有人來說都是成本加成。我的意思是，台積電有多大信心認為客戶可以吞下成本。最終客戶將承擔成本，即不會在一天結束時引發潛在的晶圓價格通脹或半導體通脹，因為台積電的全球產能越來越多。

Yes. Okay. Bruce, let me add that in C.C.'s statement, he also mentioned that we will -- aside from selling our value, we will continue to drive down our cost, but also to leverage our competitive advantages of large volume, economy of scale and manufacturing technology leadership. And with all these actions plus the government support, we are able to absorb the higher cost of overseas fabs and maintain our long-term financial goals, gross margin of 53% and higher.

是的。好的。 Bruce，讓我補充一下，在 C.C. 的聲明中，他還提到我們將——除了出售我們的價值，我們將繼續降低成本，同時利用我們的大容量、規模經濟和製造技術領先。通過所有這些行動加上政府的支持，我們能夠吸收海外晶圓廠的更高成本並維持我們的長期財務目標，即 53% 或更高的毛利率。

Let me add some color. this is C.C. Wei. Actually, in our view, the semiconductor becomes more essential and more pervasive in people's life. And the semiconductor industry value in the supply chain is increasing. And if we look at our customers' performance, they are rising structural gross margin over the past 5 to 6 years, it continued to improve. That reflects what I just said, the semiconductor value has been recognized and also very important in our daily life. And so we set up our pricing strategy to reflect all the values we share to customer and customer also in their value from the end market.

讓我添加一些顏色。這是 C.C.魏。事實上，在我們看來，半導體在人們的生活中變得越來越重要，越來越普遍。供應鏈中的半導體產業價值正在增加。如果我們看一下客戶的表現，他們在過去 5 到 6 年中結構性毛利率不斷上升，而且還在繼續改善。這反映了我剛才所說的，半導體的價值已經被認可並且在我們的日常生活中也非常重要。因此，我們制定了定價策略，以反映我們與客戶和客戶共享的所有價值，也體現在他們來自終端市場的價值中。

Thank you, C.C. Bruce? Do you have a second question?

謝謝你，C.C.布魯斯？你還有第二個問題嗎？

Yes, please. The second question is for the N7. I think we spent some time for 7-nanometer, which is more cyclical. I think after 3 months, I think the correction is even bigger. So how -- can you share us the full year outlook for 7-nanometer? When we can expect the customer or the 7-nanometer capacity utilization to back to normal, back to like fully utilized? Or can we avoid the same cyclical symptom in 5-nanometer and 3-nanometer in 2, 3 years from now?

是的，請。第二個問題是關於 N7 的。我認為我們在 7 納米上花費了一些時間，它更具週期性。我認為 3 個月後，我認為調整幅度更大。那麼如何 - 您能否與我們分享 7 納米的全年展望？我們什麼時候可以預期客戶或 7 納米產能利用率恢復正常，恢復到充分利用？或者我們能否在 2、3 年後避免 5 納米和 3 納米出現相同的周期性症狀？

Okay. So Bruce's second question was on 7-nanometer. So his question is 7-nanometer seems to have deteriorated versus 3 months ago. So what is our view? Can it fully recover in this year?

好的。所以 Bruce 的第二個問題是關於 7 納米的。所以他的問題是 7 納米似乎與 3 個月前相比有所惡化。那麼我們的觀點是什麼？今年能完全恢復嗎？

And then I think, Bruce, the second part of your question is also how can we avoid the same cyclical systems at other nodes in the future. Is that correct?

然後我想，Bruce，你問題的第二部分也是我們將來如何避免在其他節點出現相同的循環系統。那是對的嗎？

Yes.

是的。

Okay.

好的。

So I answer this one? First, N7 most of business for TSMC in the last 2 years is from the PC and smartphone. And that happened to correct -- or let me say that inventory correct happened to be the most severe one. And so the end market dropped more severely than we thought. In fact, the unit will not increase, but the content will be increased, so is demand be more softened than we thought 3 months ago?

所以我回答這個？首先，台積電近兩年的N7大部分業務來自PC和智能手機。這恰好是正確的——或者讓我說庫存正確恰好是最嚴重的。因此，終端市場的下跌比我們想像的要嚴重。其實單位不會增加，但是含量會增加，所以需求是不是比我們3個月前想的要軟？

Why be repeated at 5 or 3? Cyclicality of the semiconductor always exist, but it's unlikely this time the scenario was to be repeated because our current downturn actually, it's kind of being enhanced or being degraded by the pandemic.

為什麼要重複 5 或 3？半導體的周期性一直存在，但這次不太可能重複這種情況，因為我們目前的低迷實際上在某種程度上被大流行病加劇或惡化了。

Due to the pandemic, the digital transformation progress have been enhanced. And so the demand being increased dramatically. But then due to the pandemic, the supply chain disruption happened. And people during this time, probably changed their strategy or their thoughts on the inventory buildup. So artificially, the inventory has been built up quickly and dramatically.

受疫情影響，數字化轉型進程加快。因此需求急劇增加。但隨後由於大流行，供應鏈中斷發生了。在這段時間裡，人們可能改變了他們的策略或他們對庫存增加的想法。如此人為地，庫存已經迅速而顯著地增加了。

And then the response to the each industry are different. And so they manage that the inventory correction also differently. This kind of phenomenon all because of -- largely because of pandemic, and we don't think that it will happen again. And in the next 5-nanometer, 3-nanometer, I believe TSMC and TSMC's customer will be more prudent on planning that what is the demand and also the supply.

然後每個行業的反應都不一樣。因此，他們管理庫存修正的方式也不同。這種現像都是因為 - 主要是因為大流行，我們認為它不會再次發生。而在接下來的5納米、3納米，我相信台積電和台積電的客戶在規劃上會更加謹慎，什麼是需求，什麼是供應。

Okay. Bruce, does that answer your second question?

好的。布魯斯，這是否回答了你的第二個問題？

Yes, let me follow up a little bit. I mean so, C.C. just mentioned more external factors, right? So what does TSMC do to avoid the same thing for 5 and 3 in the future for (inaudible) if you are cutting your capacity plan into a more conservative way or something like that? Is that something we should expect in the future nodes?

是的，讓我跟進一點。我的意思是，C.C.剛才提到了更多的外部因素，對吧？那麼，如果您將容量計劃削減為更保守的方式或類似方式，台積電將如何避免未來（聽不清）5 和 3 發生同樣的事情？這是我們應該在未來節點中期待的東西嗎？

So Bruce is asking sort of a follow-on. So then with 7-nanometer, how do we avoid the same thing happening at 5 or 3 in the future? Will we cut our capacity? How do we change our capacity planning and build to avoid a similar situation?

所以 Bruce 是在問某種後續問題。那麼對於 7 納米，我們如何避免在未來的 5 或 3 納米上發生同樣的事情呢？我們會削減產能嗎？我們如何改變我們的容量規劃和構建以避免類似情況？

Bruce, this is a very good question. Actually, let me share with you how we deal with it. In fact, between the N5, N3, the technology node our capacity buildup and with a lot of tools that can be completely used by these 2 nodes. So in fact, for TSMC to build capacity, we put N5, N3 and maybe in the future N2 as a total picture to look at it. And we will keep our flexibility to increase or to adjust for the future. So we will be better prepared. That's what I can tell you.

布魯斯，這是一個很好的問題。實際上，讓我與您分享我們如何處理它。事實上，在N5、N3之間，技術節點我們的能力建設和有很多工具可以完全被這2個節點使用。所以其實台積電建產能，我們把N5，N3，可能未來的N2，作為一個全貌來看。我們將保持靈活性，以增加或調整未來。所以我們會準備得更好。這就是我能告訴你的。

Thank you, Bruce. Operator, can we move on to the next participant, please?

謝謝你，布魯斯。接線員，我們可以轉到下一位參與者嗎？

And our next question is come from Gokul Hariharan with JPMorgan.

我們的下一個問題來自摩根大通的 Gokul Hariharan。

Let me take my first question on the near-term 2023. So you mentioned first half, we have seen a worse kind of environment compared to 3 months back. Is it mainly HPC data center that has seen further reduction? Or are we seeing it across the board, including smartphone for first half?

讓我回答關於近期 2023 年的第一個問題。所以你提到上半年，與 3 個月前相比，我們看到了更糟糕的環境。進一步縮減的主要是HPC數據中心嗎？還是我們全面看到它，包括上半年的智能手機？

And also on second half, just putting in rough numbers on your guidance, looks like we are looking for a pretty sharp rebound in second half of 2023, something like 25% to 30% second half versus first half of this year. Could we have some more color on what are the areas that gives you the confidence for such a strong rebound in the second half of the year to get us back to like a flattish revenue growth for the year?

同樣在下半年，只是在你的指導中輸入粗略數字，看起來我們正在尋找 2023 年下半年的大幅反彈，與今年上半年相比，下半年反彈幅度約為 25% 至 30%。我們能否對哪些領域有更多的了解，讓您有信心在今年下半年實現如此強勁的反彈，讓我們回到今年收入增長平穩的狀態？

Okay. So Gokul's first question is on the near-term outlook. He wants to understand first half, we said the inventory correction is sharper. So he wants to understand what are we seeing in different end market segments. Is the sharper correction driven by data center? Is it smartphone, PC? What are we seeing across the different segments first.

好的。所以 Gokul 的第一個問題是關於近期前景。他想了解上半年，我們說庫存調整更劇烈。所以他想了解我們在不同的終端細分市場看到了什麼。更劇烈的修正是由數據中心驅動的嗎？是智能手機、PC嗎？我們首先在不同的細分市場看到了什麼。

Well, let me answer the question. The inventory correction actually began last year. And at the peak of the third quarter, and we think the inventory has been picked in third quarter last year and gradually reduced in the fourth quarter, and we did see some inventory reduce sharply recently, and it will continue to be so to first half of this year. So that's why we say we have confidence that in the second half, the business will rebound. But is that a very strong V shape? We didn't know yet, but certainly, it's not a U shape for the business to recover in the second half.

好吧，讓我回答這個問題。庫存調整實際上是從去年開始的。而在三季度的高峰期，我們認為去年三季度庫存已經回升，四季度逐漸減少，最近確實看到一些庫存大幅減少，而且會持續到上半年今年的。這就是為什麼我們說我們有信心在下半年業務會反彈。但這是一個非常強大的 V 形嗎？我們還不知道，但可以肯定的是，下半年業務復甦不會呈 U 形。

Okay. I think N3 is clearly one part of that ramp. But is there anything else that is -- that you are already seeing that strong confidence for the second half rebound in addition to the N3 ramp-up?

好的。我認為 N3 顯然是該斜坡的一部分。但是還有什麼——除了 N3 的上升之外，你已經看到了對下半場反彈的強烈信心嗎？

So Gokul is asking sort of in terms of second half, why can TSMC's business be better than the overall industry? Besides N3, are there any other factors when you think about technology leadership?

所以Gokul是在問下半年，為什麼台積電的業務可以比整個行業好？除了 N3，您在考慮技術領先時還有其他因素嗎？

Gokul, you are right. N3's ramp-up here of the business to rebound, and also actually, let me share with you some of the HPC's customer. Also, we have a new product launch in the second half, especially in the AI area or in computing area. Did that answer your question?

戈庫爾，你是對的。 N3 的業務回升，實際上，讓我與您分享一些 HPC 的客戶。此外，我們在下半年有新產品發布，特別是在人工智能領域或計算領域。這回答了你的問題嗎？

Understood. Okay. That's my first question. Jeff, can I move on to the second one?

明白了。好的。這是我的第一個問題。傑夫，我可以轉到第二個嗎？

Yes, please.

是的，請。

My second question is on CapEx and capital intensity. CapEx, we are taking it down a notch for this year given the downturn, I guess, and some conservatism. Are we already seeing the peak in CapEx intensity in the cycle? Or we are likely to given the plans in Europe plans to expand more capacity in U.S.? Are we likely to see higher CapEx intensity in the out years as well?

我的第二個問題是關於資本支出和資本密集度。資本支出，我猜，鑑於經濟低迷和一些保守主義，我們將今年的資本支出降低一個檔次。我們是否已經看到週期中資本支出強度的峰值？或者我們可能會考慮到歐洲計劃擴大美國的產能？我們是否也可能在未來幾年看到更高的資本支出強度？

Okay. Sorry. Is that your -- okay, Gokul. I think I got the gist of your question. So Gokul's second question is on CapEx and capital intensity. He notes this year, we have guided 32% to 36% given sort of some tightening up and such. So his question is -- does this represent, have we already seen or past the peak in terms of our capital intensity this cycle, or as we may continue to evaluate and expand overseas and such? Will there be another step-up in our capital intensity?

好的。對不起。那是你的——好的，Gokul。我想我明白了你問題的要點。所以 Gokul 的第二個問題是關於資本支出和資本密集度的。他指出，今年我們已經指導了 32% 到 36%，因為有些緊縮等等。所以他的問題是——這是否代表，我們是否已經看到或超過了本週期資本密集度的峰值，或者我們可能會繼續評估和向海外擴張等？我們的資本密集度會再次提高嗎？

Okay. Gokul, this is Wendell. As we said before, we invest the CapEx this year for the growth in the future years. So we also said earlier that we are tightening up the spending where appropriate. But as long as we believe the growth opportunity is there, we will continue to invest.

好的。 Gokul，這是溫德爾。正如我們之前所說，我們今年投資資本支出是為了未來幾年的增長。所以我們之前也說過，我們正在適當地收緊開支。但只要我們相信增長機會存在，我們就會繼續投資。

Now we've given the guidance for this year, so you can calculate the capital intensity. It will be over 40%. From what we are able to see at this moment, several years down the road, we're seeing the CapEx intensity to be between mid- to high 30s. That's the current view.

現在我們已經給出了今年的指導，所以你可以計算資本密集度。將超過40%。從我們目前能夠看到的情況來看，幾年後，我們看到資本支出強度在 30 多歲到 30 多歲之間。這是目前的看法。

Is that several years like 5 years out? Or is it like closer to that?

那是幾年還是 5 年？還是更接近於此？

Yes. Something like that. Something like that.

是的。像那樣的東西。像那樣的東西。

All right. Thank you, Gokul. Operator, can we move on to the next participant?

好的。謝謝你，戈庫爾。接線員，我們可以轉到下一位參與者嗎？

And our next question is come from Charlie Chan with Morgan Stanley.

我們的下一個問題來自摩根士丹利的 Charlie Chan。

So first of all, a question to C.C. And so thanks for your sharing during the Monte Jade Association Presentation on Semiconductor Challenge was really insightful.

所以首先，有一個問題要問 C.C.因此，感謝您在 Monte Jade 協會關於半導體挑戰的演講中分享的內容非常有見地。

So my question is that you mentioned during your peak saying that the biggest change for semiconductor is cost is getting higher, along so-called difficulty in supply chain. So I wanted to ask C.C. what's the true value add of Moore's Law going forward since it becomes much more expensive and whether you really see that customers can continue to expand their gross margin and create value to this world. So this is my first question.

所以我的問題是，你在高峰期提到，半導體最大的變化是成本越來越高，以及所謂的供應鏈困難。所以我想問問C.C.摩爾定律在未來的真正增值是什麼，因為它變得更加昂貴，以及您是否真的看到客戶可以繼續擴大他們的毛利率並為這個世界創造價值。所以這是我的第一個問題。

Okay. So Charlie's first question is around technology. He notes that the cost, I guess, and cost per transistor is getting higher and overall global costs are increasing as well. So his question is, what is the value? Or is there still value in the so-called Moore's Law going forward? How does TSMC view this issue?

好的。所以查理的第一個問題是關於技術的。他指出，我猜，成本和每個晶體管的成本越來越高，全球總體成本也在增加。所以他的問題是，價值是多少？還是所謂的摩爾定律在未來仍然有價值？台積電如何看待這個問題？

Well, Charlie, let me share with you, nowadays, we look at our technologies value not only the geometries are shrinking actually. More importantly actually is the power consumption type efficiency. And also, we try to help our customers with our advanced 3D IC Fabric technology to improve the system performance, and that's where it's important.

好吧，查理，讓我和你分享一下，如今，我們看我們的技術價值，不僅幾何形狀實際上在縮小。其實更重要的是功耗式效率。此外，我們還嘗試通過我們先進的 3D IC Fabric 技術幫助我們的客戶提高系統性能，而這正是它的重要所在。

In the future, we want the world to be more greener, more safer, better. So power consumption needs become very, very important. And while we still improve the system performance and that's where our customer can get their value. And that's what we view in the future.

未來，我們希望世界更綠色、更安全、更美好。因此，功耗需求變得非常非常重要。在我們仍在提高系統性能的同時，這也是我們的客戶可以獲得價值的地方。這就是我們對未來的看法。

So the follow-up to that is that we noticed that for your major smartphone SoC customers, they seem to slow down the migration to the newer nodes, right, or so-called bifurcation for their new SoC adoption. So do you think for mobile computing, particularly do you think a value-add is diminishing based on what you just said. And also another structural change we are seeing is about the cost of chip by ASIC in HPC segment. So can management talk about that part of business, meaning the ASIC design in terms of total revenue contribution in HPC and the growth rate of the 8-figure business?

因此，後續行動是我們注意到，對於您的主要智能手機 SoC 客戶，他們似乎放慢了向較新節點的遷移，對，或者所謂的新 SoC 採用分叉。那麼，您認為對於移動計算，特別是根據您剛才所說的，您認為增值正在減少嗎？我們看到的另一個結構性變化是關於 ASIC 在 HPC 領域的芯片成本。那麼管理層能否談談這部分業務，即 ASIC 設計在 HPC 中的總收入貢獻和 8 位數業務的增長率？

Okay. So Charlie, I'm going to interpret. So he has a follow-up to his first question and then his second question. So the follow-up to his first question is then in terms of going back to cost again, do we see any sign of slowdown in smartphone SoC migration at the leading node. That's his follow-up. And then his second question is then do we see more companies designing ASICs? And can we disclose the revenue contribution from such customers? Correct, Charlie?

好的。查理，我要翻譯。所以他對他的第一個問題和第二個問題進行了跟進。因此，他的第一個問題的後續問題是再次回到成本方面，我們是否看到領先節點的智能手機 SoC 遷移放緩的跡象。那是他的後續行動。然後他的第二個問題是我們是否看到更多公司設計 ASIC？我們能否披露此類客戶的收入貢獻？對嗎，查理？

Yes, correct, please.

是的，請正確。

Okay. Charlie, let me answer your question. In fact, we do not see any slowdown on our customer to adopt the TSMC's leading-edge technology. Actually, they might have a different kind of product schedule. They might have a different kind of product plan and et cetera. But the technology adoption, actually, it did not slow down. That's my answer to your first follow-up question. And whether that's some kind of customer, some of the hyperscale customers want to develop their own chip. Yes, but I cannot give you more information than that. However, I can tell you that they also look at compute for their own business, the positioning for their opportunity actually increase their opportunity. And that requires TSMC's leading-edge technology. So we do have quite a few hyperscale customers working with TSMC to develop their own chips.

好的。查理，讓我回答你的問題。事實上，我們沒有看到我們的客戶在採用 TSMC 的領先技術方面有任何放緩。實際上，他們可能有不同類型的產品時間表。他們可能有不同類型的產品計劃等等。但實際上，技術採用並沒有放緩。這是我對你的第一個後續問題的回答。無論是某種類型的客戶，一些超大規模客戶都希望開發自己的芯片。是的，但我不能給你更多的信息。但是，我可以告訴你，他們也為自己的業務著眼於計算，對他們機會的定位實際上增加了他們的機會。而這需要台積電的領先技術。所以我們確實有不少超大規模客戶與台積電合作開發他們自己的芯片。

And would that cannibalize your merchant business, for example, does the merchant CPU, GPU, are they going to be replaced or impacted by those custom design growth?

這是否會蠶食您的商業業務，例如，商業 CPU、GPU 是否會被這些定制設計的增長所取代或影響？

Okay. Last question, Charlie is asking then his concern is that any hyperscalers are developing, will that cannibalize business for other types of companies?

好的。最後一個問題，Charlie 問他，他擔心的是任何超大規模企業正在發展，這會蠶食其他類型公司的業務嗎？

I cannot comment, but I don't think so. They also developed the specific purpose for their own. I mean it's not a kind of to rephrase, generalize the purpose of CPU, GPU, all those kind of things.

我無法發表評論，但我不這麼認為。他們還為自己制定了特定的目的。我的意思是，這不是一種改寫，概括 CPU、GPU 以及所有這些東西的用途。

And I think also for TSMC, we're happy to work with all types of customers, whatever type they may be. Okay, thank you, Charlie. Let's move on to the next participant.

而且我認為對於台積電來說，我們很高興與所有類型的客戶合作，無論他們是什麼類型。好的，謝謝你，查理。讓我們繼續下一位參與者。

And our next question is come from Sunny Lin with UBS.

我們的下一個問題來自瑞銀集團的 Sunny Lin。

So my first question is on the N3 ramp up. And so if we look at the share revenue could be higher than 5-nanometer for the first year. But if we look at the sales contribution as a percentage of total sales, it's actually a bit lower. And so I wonder for this year, perhaps there's some market demand issue. But looking into 2024 and 2025 based on your current customer engagement, should we model a faster ramp-up into 2024 or 2025 or its overall ramp-up could be slight slower because of maybe customer schedule issues or planning? And if we think about the peak revenue contribution for 3-nanometer over time, do you think you will be able to reach 30% range, as N5 and N7. That's my first question.

所以我的第一個問題是關於 N3 的提升。因此，如果我們看一下第一年的份額收入可能會高於 5 納米。但如果我們將銷售額貢獻佔總銷售額的百分比來看，它實際上會低一些。所以我想知道今年，也許存在一些市場需求問題。但是，根據您當前的客戶參與度來展望 2024 年和 2025 年，我們是否應該模擬到 2024 年或 2025 年的更快增長，或者由於客戶日程安排問題或計劃，其整體增長可能會稍微慢一些？如果我們考慮隨著時間的推移 3 納米的峰值收入貢獻，您認為您是否能夠達到 30% 的範圍，如 N5 和 N7。這是我的第一個問題。

Okay. So Sunny's first question is on 3-nanometer. She notes 3-nanometer revenue is greater than 5-nanometer in its first year, but the revenue percentage contribution of mid-single digit is smaller or lower. So she's wondering why is that. Is it because of the market slowdown? Is it less customer adoption and interest? What is the reason behind that? And does that mean what is our expectation for that ramp to continue?

好的。所以 Sunny 的第一個問題是關於 3 納米的。她指出，第一年 3 納米的收入大於 5 納米，但中等個位數的收入百分比貢獻較小或更低。所以她想知道為什麼會這樣。是因為市場放緩嗎？客戶採用率和興趣是否減少？這背後的原因是什麼？這是否意味著我們對這種上升趨勢繼續下去的期望是什麼？

(technical difficulty)

（技術難度）

N3, N3E the number of tape-outs more than double that of N5 in the first and the second year. So as a result, we expect the strong demand will continue in 2023, '24, '25 and beyond, for our N3 technologies driven by both the HPC and smartphone applications. Okay? Does that answer...

N3、N3E第一年和第二年的流片數量是N5的兩倍多。因此，我們預計在 2023 年、24 年、25 年及以後，對我們由 HPC 和智能手機應用程序驅動的 N3 技術的強勁需求將繼續存在。好的？那個回答...

Yes, partially. So any thoughts on the potential peak revenue contribution in the next couple of years?

是的，部分。那麼對未來幾年潛在的收入峰值貢獻有什麼想法嗎？

Too early to talk about that N3, but we continue to believe that it will be a large and long-lasting node for us.

現在談論 N3 還為時過早，但我們仍然相信它對我們來說將是一個龐大而持久的節點。

It will be an important contributor to our 15% to 20% revenue CAGR in the next several years.

它將成為我們未來幾年 15% 至 20% 的收入複合年增長率的重要貢獻者。

Got it. My second question is a quick one. And so for you to growth value for the share. Just wonder what kind of industry growth are you assuming for the major end markets, including smartphone, PC, server, automotive?

知道了。我的第二個問題很快。等為您分享增長價值。只是想知道您假設主要終端市場（包括智能手機、個人電腦、服務器、汽車）的行業增長情況如何？

Okay. Sunny, second question is TSMC. We have said we will grow -- have slight growth year-on-year in U.S. dollar terms this year. Her question is what are we assuming for the end market growth in areas like smartphones, PCs, automotive and others?

好的。 Sunny，第二個問題是台積電。我們說過我們會增長——今年以美元計算同比略有增長。她的問題是，我們對智能手機、個人電腦、汽車等領域的終端市場增長有何假設？

Well, let me answer the question, Sunny. What we look at in 2023, actually, we look at the smartphone and PC's unit, we think it's a little bit drop in terms of units. And the content will continue to increase. And for TSMC, actually, we increased our product portfolio. We also extend our market segment -- available market segment to TSMC. So that's why we expect the whole industry to drop slightly and TSMC still grow slightly. Sunny, did that...

好吧，讓我回答這個問題，Sunny。實際上，我們在 2023 年看到的是智能手機和 PC 的單位，我們認為單位數量有所下降。而且內容還會不斷增加。實際上，對於台積電，我們增加了產品組合。我們還將我們的細分市場——可用的細分市場擴展到台積電。所以這就是為什麼我們預計整個行業會略有下降，而台積電仍會略有增長。桑尼，這樣做...

Sorry. Yes. So just a quick follow-up on server and automotive. So any expectations on server units for this year. And for auto, I think on October earnings call, you mentioned there could be some slowdown going to first half of the year. Have you started to see the deceleration? That's all my questions.

對不起。是的。所以只是對服務器和汽車的快速跟進。所以對今年的服務器單元有任何期望。對於汽車，我認為在 10 月份的財報電話會議上，您提到今年上半年可能會出現一些放緩。你開始看到減速了嗎？這就是我所有的問題。

So Sunny also wants to know what is our forecast for server units, automotive units, and then we said in October, 3 months ago, we said automotive demand was holding steady. What is the case now?

所以 Sunny 也想知道我們對服務器單位、汽車單位的預測是什麼，然後我們在 3 個月前的 10 月說，我們說汽車需求保持穩定。現在是什麼情況？

Well, the automotive demand continued to be very tight. I meant that -- I mean demand continued to increase actually. And today, we're still probably not 100% supply enough wafers to them. But it's improving, it's improving, and we expect the automotive to -- the shortage to be relaxed quickly.

好吧，汽車需求仍然非常緊張。我的意思是 - 我的意思是需求實際上繼續增加。而今天，我們可能仍然無法 100% 向他們供應足夠的晶圓。但它正在改善，它正在改善，我們預計汽車 - 短缺將迅速緩解。

And the units, for the units to grow, we expect the automotive to grow this year, but that's an OEM stuff.

而單位，為了單位的增長，我們預計汽車今年會增長，但這是 OEM 的東西。

Okay. Thank you, Sunny. Operator, can we move on to the next participant?

好的。謝謝你，桑尼。接線員，我們可以轉到下一位參與者嗎？

Our next question is come from Laura Chen with Citigroup.

我們的下一個問題來自花旗集團的 Laura Chen。

My first question is also about the overseas expansion. Like C.C. mentioned that the overseas more advanced than 20-nanometer. We account for 20% in the longer-term perspective. And also, we are expanding more in the Advanced now in the U.S. I'm just wondering that will you also expand more like back-end or advanced packaging, along with your Advanced, now say like 5- or 3-nanometer in Arizona as well.

我的第一個問題也是關於海外擴張。像 C.C.提到國外比20納米更先進。從更長遠的角度來看，我們佔20%。而且，我們現在正在美國的 Advanced 中擴展更多。我只是想知道您是否還會像後端或高級封裝一樣擴展更多，以及您的 Advanced，現在說亞利桑那州的 5 或 3 納米出色地。

Okay. So Laura's first question is actually, C.C. said the 28-nanometer below capacity could be 28 -- 20% and more in several years' time. depending on customer demand and government support. But her question is, would we consider expanding advanced packaging overseas as well?

好的。所以勞拉的第一個問題實際上是，C.C.表示 28 納米以下的產能在幾年後可能達到 28-20% 甚至更多。取決於客戶的需求和政府的支持。但她的問題是，我們是否會考慮將先進封裝也擴展到海外？

Well, today, actually we don't have a plan, but we do not rule out the possibility because the back end is a part of the total wafer service for our customer. Okay?

嗯，今天，實際上我們沒有計劃，但我們不排除這種可能性，因為後端是我們客戶的整個晶圓服務的一部分。好的？

Okay. Got it. And because we see that a lot of advanced nodes used for the high computing PC. So along with that kind of application, we see now TSMC is very good at both 3DIC or the advanced packaging. So I'm just wondering that a longer-term perspective, whether that is also the direction in the U.S.

好的。知道了。而且因為我們看到許多高級節點用於高計算 PC。所以隨著這種應用，我們現在看到台積電在3DIC或先進封裝方面都非常擅長。所以我只是想知道，從長遠來看，這是否也是美國的方向。

So I think what Laura is saying because, of course, that TSMC 3DIC solutions leading and HPC adoption is strong. So with advanced technologies, will there be a need to build or have packaging in the U.S. as we move advanced technology portion to the U.S.?

所以我認為 Laura 所說的當然是因為 TSMC 3DIC 解決方案的領先地位和 HPC 的採用率很高。那麼對於先進技術，當我們將先進技術部分轉移到美國時，是否需要在美國建造或擁有包裝？

All right, Laura, I just answered, said that we don't rule out the possibility. But today, we don't have a plan yet.

好吧，勞拉，我剛剛回答說，我們不排除這種可能性。但是今天，我們還沒有計劃。

Sure, sure. And my second question is about the again around road map. Can you give us more colors on the current progress? We know that we have the schedule to ramping up in 2025 versus the [EUV] the high-voltage equipment will probably only ready then. Do you think that could be any like potential pushback to like a 2026 onward?

一定一定。我的第二個問題是關於路線圖的回歸。你能給我們更多關於當前進展的顏色嗎？我們知道我們有計劃在 2025 年與 [EUV] 相比，高壓設備可能只會在那時準備就緒。你認為這可能是 2026 年之後的潛在阻力嗎？

Okay. So Laura's second question is on the nanosheet transistor structure. She wants to know what is the progress for TSMC as we are adopting nanosheet structure at our N2. Will this be impacted or pushed out by the availability of things such as, I think you're asking high NA, Laura and things like that, correct?

好的。所以勞拉的第二個問題是關於納米片晶體管結構。她想知道台積電的進展如何，因為我們在我們的 N2 上採用了納米片結構。這會受到諸如我認為你要求高 NA、勞拉之類的東西的可用性的影響或推動，對嗎？

Right.

正確的。

Actually, our aim to technology development is on track, actually is better than what we thought. We have very good progress recently, and our risk production will be in 2024 and volume production in 2025. The schedule is not changed if we don't put it in, but so far so good, let me assure you that.

其實，我們的技術發展目標是走上正軌的，實際上比我們想像的要好。我們最近進展非常好，我們將在 2024 年進行風險生產，在 2025 年進行量產。如果我們不投入，時間表不會改變，但到目前為止一切順利，讓我向你保證。

Okay. Thank you, Laura. Operator, can we move on to the next participant, please?

好的。謝謝你，勞拉。接線員，我們可以轉到下一位參與者嗎？

Thank you. And our next question is come from Rolf Bulk with New Street Research.

謝謝你。我們的下一個問題來自 New Street Research 的 Rolf Bulk。

I had a question on your 2023 CapEx budget and your fab build-out plan. You, earlier on in the conference call, you talked about the build-out cost of fabs in the U.S. being 5x higher versus Taiwan. And in that context, I was wondering if you could talk about the share of CapEx spending that you expect to go towards that build-out versus equipment this year versus last year? Will the larger share of CapEx go to those fab buildouts. And if so, how much more?

我對您的 2023 年資本支出預算和晶圓廠擴建計劃有疑問。你，在電話會議的早些時候，你談到美國晶圓廠的建設成本比台灣高 5 倍。在這種情況下，我想知道你是否可以談談今年與去年相比你預計用於擴建與設備的資本支出份額？資本支出的更大份額會用於那些晶圓廠擴建嗎？如果是這樣，還有多少？

Okay. Sorry, Rolf. Let me try to summarize your first question. His first question is on our CapEx in 2023, and our fab build-out plans. I believe Rolf, you're referring to fab build-out plans overseas, correct?

好的。對不起，羅爾夫。讓我試著總結一下你的第一個問題。他的第一個問題是關於我們 2023 年的資本支出以及我們的工廠擴建計劃。我相信羅爾夫，你指的是海外晶圓廠擴建計劃，對嗎？

Yes, exactly. What I'm trying to understand is if I think about your CapEx such as for this year versus last year, what share will go towards infrastructures of that build-outs, and what percentage will go to equipment roughly?

對，就是這樣。我想了解的是，如果我考慮您的資本支出，例如今年與去年的比較，有多少份額將用於擴建的基礎設施，大致有多少百分比將用於設備？

Okay. So Rolf wants to know for our CapEx, how much is going to building and facilities, how much is for tools?

好的。所以羅爾夫想知道我們的資本支出，有多少用於建築和設施，有多少用於工具？

Rolf, I want to make one correction when our CFO said the, when you refer to 5x greater, I think our CFO was saying the construction costs are 4 to 5x higher, not the CapEx cost, but nonetheless, Rolf is asking for a breakout, of the CapEx?

羅爾夫，當我們的首席財務官說，當你提到 5 倍時，我想我們的首席財務官說的是建設成本高出 4 到 5 倍，而不是資本支出成本，但儘管如此，羅爾夫還是要求突破, 資本支出？

Well, Rolf, we provide the breakdown of CapEx per year, advanced versus specialty technology, but we do not provide the breakdown between tools and constructions, but as I said, in the U.S., the construction of building and facilities is probably 5x that of Taiwan. And it lasts for a few years.

好吧，羅爾夫，我們提供每年資本支出的細目，先進技術與專業技術，但我們不提供工具和結構之間的細目分類，但正如我所說，在美國，建築和設施的建設可能是美國的 5 倍台灣。它會持續幾年。

Right? Okay. Rolf, do you have a second question?

正確的？好的。羅爾夫，你還有第二個問題嗎？

Yes, as a second question. Could you talk about the growth that you achieved in your Advanced Packaging segment in 2022? And what growth you are expecting in 2023? And in particular, could you talk about your SoIC products and whether interest in those products is accelerating?

是的，作為第二個問題。您能談談 2022 年您在先進封裝領域取得的增長嗎？您預計 2023 年會有怎樣的增長？尤其是，您能否談談您的 SoIC 產品，以及對這些產品的興趣是否正在增加？

Okay. Thank you, Rolf. So Rolf second question is on the Advanced Packaging business. What was the growth in Advanced Packaging last year? And what do we expect the growth to be this year? And then also more specifically in terms of our SoIC technology, what is the outlook or the momentum there?

好的。謝謝你，羅爾夫。所以羅爾夫的第二個問題是關於先進封裝業務的。去年先進封裝的增長情況如何？我們預計今年的增長情況如何？然後更具體地說，就我們的 SoIC 技術而言，那裡的前景或勢頭如何？

Okay. Rolf, this is Wendell. Again, in 2022, our Advanced Packaging grew at a similar rate to our corporate rate. So it accounted for about 7% of our total revenue in 2022. And we think that in this year, the growth will be also similar pretty -- well, slightly lower than the corporate, it will be probably flattish for the back end.

好的。羅爾夫，這是溫德爾。同樣，在 2022 年，我們先進封裝的增長速度與我們的企業增長率相似。因此，它在 2022 年占我們總收入的 7% 左右。我們認為，今年的增長也將非常相似——好吧，略低於企業，後端可能會持平。

Okay. Thank you, Rolf. All right. Thank you. In the interest of time, maybe we'll take questions from the last 3 participants.

好的。謝謝你，羅爾夫。好的。謝謝你。為了節省時間，也許我們會回答最後 3 位參與者的問題。

The next question is come from Charles Shi with Needham.

下一個問題來自 Charles Shi 和 Needham。

I want to ask a little bit about the 20% R&D expense step-up in this year. Can you provide a little bit more detail what the incremental R&D expense are going to be directed at? Well, for one thing, if I understand correctly, your N3 R&D team are going to move on to the N+2 node if we have seen nanometer is the current end node, or is there any other incremental R&D spending this year you're expecting to be around design enablement, Advanced Packaging, specialty technology. Can you kind of give us a sense where the big step-up is coming from?

我想問一下今年研發費用增加20%的情況。您能否更詳細地說明增加的研發費用將用於什麼？好吧，一方面，如果我理解正確的話，如果我們看到納米是當前的終端節點，或者今年是否有任何其他增量研發支出，您的 N3 研發團隊將轉向 N+2 節點期望圍繞設計支持、先進封裝、專業技術展開。你能告訴我們大進步的來源嗎？

Okay. So Charles first question is on R&D. He wants to understand or actually more details in terms of the 20% approximately year-on-year increase. What is driving -- or the R&D spending going to be focused on? Is it N3? Is it N2? Is it design enablement by specific breakdown?

好的。所以查爾斯的第一個問題是關於研發的。他想了解大約20%的同比增長，或者說更多的細節。什麼在推動——或者研發支出將集中在什麼地方？是N3嗎？是N2嗎？它是通過特定細分實現設計的嗎？

Charles, let me answer your question. All your comments are correct. I mean, that is because of a newer technology like a N2, N 1.4 and also a lot of new chips are more expensive than before. Actually, the technology complexity continue to increase exponentially. So that's why we spend much more R&D budget. We want to continue to be #1 in the world. So we continue to invest including the geometry shrinkage, including the new transistor architecture, including the design enablement and including buying the new equipment that all adds up.

查爾斯，讓我回答你的問題。你所有的評論都是正確的。我的意思是，這是因為像 N2、N 1.4 這樣的新技術以及許多新芯片比以前更貴。實際上，技術複雜性繼續呈指數增長。所以這就是為什麼我們花費更多的研發預算。我們希望繼續成為世界第一。因此，我們繼續投資，包括幾何收縮，包括新的晶體管架構，包括設計支持，包括購買所有加起來的新設備。

Okay. Charles do you have a second question?

好的。查爾斯，你還有第二個問題嗎？

Yes. Yes, I do. Maybe a second question. I want to ask about specialty technology. Obviously, you expect specialty technology to backfill your 7-nanometer fabs. I think this may be a more commonality inside the industry, but I recently spoke to some of your customers who are more on the analog mixed signal side. A lot of them are, I mean, driving volumes more from 28-nanometer and above, and they could tell me that the benefit of going to 14-nanometer, 16-nanometer for you, 7-nanometer is there, but it's not large enough as in the past, moving node to node. And at the same time, the cost is much higher, and I look at your technology road map, specialty technology, road map, it does seems to me that the specialty technology platforms are not as broad as the 7-nanometer if I compare with the 28-nanometer and above.

是的。是的，我願意。也許是第二個問題。我想問專業技術。顯然，您希望專業技術能夠回填您的 7 納米晶圓廠。我認為這可能是行業內的一個普遍現象，但我最近與你們的一些客戶進行了交談，他們更多地在模擬混合信號方面。我的意思是，他們中的很多人都在推動 28 納米及以上的產量增加，他們可以告訴我轉向 14 納米、16 納米、7 納米的好處是存在的，但並不大和過去一樣，將一個節點移動到另一個節點。同時，成本要高得多，我看了你們的技術路線圖，專業技術，路線圖，在我看來，專業技術平台確實沒有 7 納米那麼廣泛，如果我與28納米及以上。

I just want to get some insights from you. How do you think about the progression of specialty technology going forward, as it seems to me that it's kind of slowing down a little bit more slowing a little bit down faster for the analog mixed signal customers.

我只是想從你那裡得到一些見解。您如何看待未來專業技術的發展，因為在我看來，對於模擬混合信號客戶來說，它正在放慢一點點，放慢一點點。

So Charles' second question is on specialty technology. His observation is that the technology, specialty technology portfolio at 7-nanometer seems not as broad as prior nodes and that the -- his question is, do we see the slowing scaling of analog and mixed-signal areas in terms of the specialty technology development and moving down to lower nodes or more advanced nodes.

所以 Charles 的第二個問題是關於專業技術的。他的觀察是，7 納米的技術、專業技術組合似乎不像以前的節點那麼廣泛，他的問題是，我們是否看到模擬和混合信號領域在專業技術發展方面的規模正在放緩並向下移動到較低的節點或更高級的節點。

Charles, your observation is quite good. Actually, you are right. But then let me share with you a little bit more detail inside. Actually, you are right, for the analog portion or mixed signal portion, we do not need to really move into 7-nanometer or more ones node. But as time goes by, now it's more and more computing functionality needed to be added into the product.

查爾斯，你的觀察力很好。其實，你是對的。但是，讓我與您分享更多內部細節。其實你是對的，對於模擬部分或混合信號部分，我們不需要真正進入7納米或更多節點。但隨著時間的推移，現在需要將越來越多的計算功能添加到產品中。

Let me share with you that one thing like the WiFi, you need a really, very high speed to move to the next generation and also the RF. For those kind of things, you need a very high-performance of the computing together with low power consumption. It is important. And if you want to get the lower power consumption, the only the leading-edge node it can give you that kind of opportunities. All the footprint stays the same, then if you want to have a higher functionality with a lower power consumption, that's where you have to move into the 7-nanometer or more advanced node even with the analog product. Did that answer your question?

讓我與您分享一件事情，例如 WiFi，您需要非常非常高的速度才能移動到下一代以及 RF。對於這類事情，您需要非常高性能的計算和低功耗。這很重要。而如果你想獲得更低的功耗，只有領先的節點才能給你這樣的機會。所有佔地面積都保持不變，那麼如果您想以更低的功耗獲得更高的功能，那麼即使是模擬產品，您也必須進入 7 納米或更先進的節點。這回答了你的問題嗎？

Yes. So I think this is above the reason that you feel still quite confident about 7-nanometer utilization will come back. You said it will mildly come back a little bit in '23, but you're still confident '24 and forward, the 7-nanometer will still be a very, very long-lasting node for you.

是的。所以我認為這就是您對 7 納米的使用仍然充滿信心的原因。你說它會在 23 年溫和地恢復一點，但你仍然對 24 年和未來充滿信心，7 納米對你來說仍然是一個非常非常持久的節點。

You are right.

你是對的。

Okay. All right. Thank you, Charles.

好的。好的。謝謝你，查爾斯。

The next question is come from Brad Lin with Bank of America.

下一個問題來自美國銀行的 Brad Lin。

I have 2 questions. One is on the globalization challenge and the other on the mature nodes. So first of all, we know (inaudible) excellent in managing the supply chain and the cluster in Taiwan. However, when we now expand Japan and U.S. footprint with the less of the cluster there. Would management please share with us why the strategy is to maintain the strong efficiency and the excellence that TSMC has been delivering.

我有兩個問題。一個是關於全球化挑戰，另一個是關於成熟節點。因此，首先，我們知道（聽不清）台灣在管理供應鍊和集群方面表現出色。然而，當我們現在擴大日本和美國的足跡時，那裡的集群較少。管理層能否與我們分享為什麼該戰略是保持台積電一直以來的高效和卓越表現。

Okay. Brad's first question is on our global footprint. He notes that TSMC has done a good job in terms of supply chain and cluster management. But as we go overseas to U.S. and Japan, how will we continue to ensure that we do a good job?

好的。 Brad 的第一個問題是關於我們的全球足跡。他指出，台積電在供應鍊和集群管理方面做得很好。但隨著我們出海到美國和日本，我們將如何繼續確保我們做好工作？

Well, okay, let me answer. I think the Wendell has answered this question earlier, let me summarize a little bit. TSMC is in a service business. not in just pure production. The service depends on the trust from the customers. So in the past, our trust and service depends on our technology leadership, manufacturing excellence and the lowest cost and quality. But recently, the geopolitical development is evolving just in front of us. that 100% in one place cannot suffice our customers' needs. Therefore, we started the overall global footprint planning.

好吧，好吧，讓我回答。我想溫德爾之前已經回答了這個問題，讓我稍微總結一下。台積電從事服務業務。不僅僅是純粹的生產。服務取決於客戶的信任。所以在過去，我們的信任和服務取決於我們的技術領先、卓越的製造以及最低的成本和質量。但最近，地緣政治的發展演變就在我們面前。一個地方 100% 不能滿足我們客戶的需求。因此，我們開始了整體的全球足跡規劃。

Now of course, the cost will be higher. And I think our team has been focused on how do we do this at the same time, keep our minimum gross margin to be 53% and above. And that is the standard that we decide how the pace of our global expansion going to be, and there are other segments in terms of the space, of course.

當然，現在成本會更高。而且我認為我們的團隊一直專注於我們如何同時做到這一點，將我們的最低毛利率保持在 53% 及以上。這就是我們決定全球擴張步伐的標準，當然，在空間方面還有其他部分。

The global expansion increased the value to our customers and to the new geopolitical environment. And therefore, the pricing, how the customer can shoulder the increased cost in terms of pricing. And of course, the -- geopolitically, the semiconductor in the U.S. and Japan are all new. So I believe we are working hard on how to reduce the cost by building up the semiconductor supply ecosystem in U.S. and Japan. And I think indeed, both governments echo are -- not just us, also rather other major companies to build a similar capacity in this place to reduce the costs.

全球擴張為我們的客戶和新的地緣政治環境增加了價值。因此，定價，客戶如何在定價方面承擔增加的成本。當然，從地緣政治的角度來看，美國和日本的半導體都是全新的。所以我相信我們正在努力研究如何通過在美國和日本建立半導體供應生態系統來降低成本。我認為，事實上，兩國政府都在回應——不僅僅是我們，還有其他主要公司在這個地方建立類似的能力以降低成本。

So that is the general arrangement we are planning. There's no fixed rate. Of course, the government support will be another factor. And so that is, we are cautiously step-by-step to make sure our shareholders' value still be kept.

這就是我們計劃的總體安排。沒有固定利率。當然，政府的支持將是另一個因素。也就是說，我們謹慎地一步一步確保我們股東的價值仍然得到保留。

Thank you, Chairman. Brad, do you have a second question?

謝謝主席。布拉德，你還有第二個問題嗎？

Yes. So my second question is on the mature node. And there will be no mature node is long-lasting and generates pretty good profits with TSMC technology leadership. So while we are expanding overseas, what is the strategy for mature node in the long run, especially China expansion led by -- also by the government subsidies.

是的。所以我的第二個問題是關於成熟節點的。並且不會有成熟的節點是持久的，並在台積電技術領先的情況下產生可觀的利潤。因此，當我們在海外擴張時，從長遠來看，成熟節點的戰略是什麼，尤其是在中國的擴張——也是由政府補貼主導的。

And also R&D is quite valuable for TSMC. And should we continue to allocate the R&D to mature node when maintaining group (inaudible) and advanced packaging?

研發對台積電來說也很有價值。還是在維護成組（聽不清）和高級封裝的時候，是否應該繼續把研發分配給成熟節點？

Okay. So Brad, second question, I think maybe to summarize this more on the mature nodes. So he wants to better understand our strategy on the mature nodes. As we expand our manufacturing footprint and increase capacity outside of Taiwan, what is our strategy for mature nodes? Will we bring mature nodes overseas? What is the product status in China? How are we allocating R&D resources to mature nodes already, specialty technology strategies, et cetera.

好的。所以布拉德，第二個問題，我想也許可以在成熟節點上對此進行更多總結。所以他想更好地了解我們在成熟節點上的策略。隨著我們擴大製造足跡並增加台灣以外的產能，我們對成熟節點的策略是什麼？會把成熟的節點帶到海外嗎？中國的產品現狀如何？我們如何將研發資源分配給已經成熟的節點、專業技術戰略等。

Well, actually, our mature node capacity strategy is very simple. We develop differentiated specialty technology for our customer. In fact, we are working with customers and to define what they need and then what kind of technology that we need to develop. We don't add any commonly used logic technology per se, but we develop specialty and differentiated and for the long term, structural market demand, and that's our current strategy. And because of that, of course, we put R&D effort and resources to cooperate with our customer. And so we can generate profitability with a reasonable utilization.

嗯，其實我們成熟的節點容量策略很簡單。我們為客戶開發差異化的專業技術。事實上，我們正在與客戶合作，確定他們需要什麼，然後我們需要開發什麼樣的技術。我們本身不添加任何常用的邏輯技術，但我們開發專業和差異化以及長期的結構性市場需求，這是我們目前的戰略。正因為如此，我們當然投入了研發精力和資源來與我們的客戶合作。因此，我們可以通過合理利用來產生盈利能力。

Thank you, C.C. Thank you, Brad. Operator, well, can we move on to the last participant, please?

謝謝你，C.C.謝謝你，布拉德。接線員，好吧，我們可以轉到最後一位參與者嗎？

Sure. Our last question is come from Mehdi Hosseini with Susquehanna International Group.

當然。我們的最後一個問題來自 Susquehanna International Group 的 Mehdi Hosseini。

Yes. I want to go back to gross margin. I'm a little bit confused if you could clarify something. Your wafer shipment in Q4 declined and also FX actually strengthened by a little bit, which should be negative on gross margin. So your cost-cutting efforts must have been greatly exceeding these trends. And I want to get a better feel for it, and I have a follow-up.

是的。我想回到毛利率。如果你能澄清一些事情，我有點困惑。你們在第四季度的晶圓出貨量有所下降，而且外匯實際上也略有走強，這對毛利率來說應該是負數。所以你們削減成本的努力一定大大超過了這些趨勢。我想更好地感受它，我有一個後續行動。

Mehdi's first question is on gross margin. He notes wafer shipments declined sequentially in the fourth quarter. The -- but with the foreign exchange movement, he notes it's a negative for gross margin. So he wants to -- but -- well -- and then he wants to understand what is the magnitude or rate of cost improvement. Maybe our CFO can clarify some of these, particularly the FX.

Mehdi 的第一個問題是關於毛利率。他指出，第四季度晶圓出貨量連續下降。 - 但隨著外匯走勢，他指出這對毛利率不利。所以他想——但是——好吧——然後他想了解成本改善的幅度或速度是多少。也許我們的首席財務官可以澄清其中的一些，尤其是外匯。

Right. Our fourth quarter gross margin is 180 basis points higher than that in the third quarter. Foreign exchange rate actually went towards our favor. The NT depreciated in the fourth quarter from TWD 32 in the third quarter to TWD 31, TWD 39, so that gave us about 140 basis points of gross margin expansion. Now the remaining one, there are cost improvement but offset by, as we said, lower wafer utilization.

正確的。我們第四季度的毛利率比第三季度高出 180 個基點。外匯匯率實際上對我們有利。新台幣在第四季度從第三季度的 32 新台幣貶值到 31 新台幣、39 新台幣，這給了我們大約 140 個基點的毛利率擴張。現在剩下的一個，有成本改善，但正如我們所說，被較低的晶圓利用率所抵消。

Okay. So the volume helped. Now if I just take your comment about the first half, declining 5% to 10% on a year-over-year basis. It does imply that there is a chance that revenues in Q2 would decline on a sequential basis. Would that also drive gross margin down on a sequential basis?

好的。所以音量有幫助。現在，如果我只接受你對上半年的評論，同比下降 5% 至 10%。這確實意味著第二季度的收入有可能環比下降。這也會導致毛利率環比下降嗎？

Okay. So Mehdi's second question is then we have noted, we did not say 5% to 10%, but our first half revenue will decline mid- to high single digit year-on-year. So he wants to know does this mean that second quarter revenue will be down sequentially? And is there -- does that mean that the gross margin will go below 53% or decline into it.

好的。所以 Mehdi 的第二個問題是我們已經註意到，我們沒有說 5% 到 10%，但我們上半年的收入將同比下降中高個位數。所以他想知道這是否意味著第二季度收入會環比下降？那裡——這是否意味著毛利率將低於 53% 或下降到 53%。

Right. We give you the guidance, so you can really calculate yourself on the revenue growth on the second quarter. And it's too early to talk about the gross margin in the second quarter and beyond. However, we can tell you that we work very diligently to make sure our gross -- long-term gross margins of 53% and higher is achievable even in this year.

正確的。我們為您提供指導，因此您可以真正計算出第二季度的收入增長情況。現在談論第二季度及以後的毛利率還為時過早。然而，我們可以告訴你，我們非常努力地工作，以確保即使在今年我們的毛利率也能達到 53% 甚至更高的長期毛利率。

Understood. Sure. Understood. But could it go below 53% and then rebound. So it would average to 53%.

明白了。當然。明白了。但它能否跌破 53% 然後反彈。所以平均為53%。

It's too early to talk about that. But as I said, we work very diligently to make sure this long-term gross margin target of 53% and above can be achievable, including this year.

現在談這個還為時過早。但正如我所說，我們非常努力地工作，以確保實現 53% 及以上的長期毛利率目標，包括今年。

And we will give you the second quarter gross margin outlook in April, Mehdi, in 3 months. Okay.

Mehdi，我們將在 3 個月內為您提供 4 月份的第二季度毛利率展望。好的。

All right. Thank you. Okay. This concludes our Q&A session. Before we conclude today's conference, please be advised that the replay of the conference will be accessible within 30 minutes from now. The transcript will be available 24 hours from now, both of which you can find and is available through TSMC's website at www.tsmc.com. Thank you again for joining us today. We wish everyone a happy Lunar New Year, and we hope you will join us again next quarter. Goodbye, and have a good day.

好的。謝謝你。好的。我們的問答環節到此結束。在我們結束今天的會議之前，請注意，會議的重播將在 30 分鐘後提供。成績單將從現在起 24 小時內提供，您可以在 TSMC 的網站 www.tsmc.com 上找到和獲取這些成績單。再次感謝您今天加入我們。祝大家農曆新年快樂，希望您下個季度再次加入我們。再見，祝你有美好的一天。