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- TSMC (2330 TT) 4Q21 earnings call: implication to WAFER WORKS (6182 TT)
TSMC (2330 TT) 4Q21 earnings call: implication to WAFER WORKS (6182 TT)
Implication to WAFER WORKS (6182 TT)
Overall, positive to WAFER WORKS (6182 TT) on TSMC's YoY increase in CAPEX and reaffirmed long-term revenue growth of 15-20% (driven by semi-content structural growth). Interest rate assumption should play a crucial role in deriving fair values of all semi-supply chain companies.
l 1Q22 guidance: revenue USD16.6-17.2bn (7.4% q-q growth in mid-point) by growth in HPC, recovery of automobile, milder smartphone seasonality.
l 1Q22 margin guidance: GM 53-55%, OPM 42-44%, effective tax rate 10-11%.
l USD30bn CAPEX in 2021, CAPEX in 2022 guided USD40-44bn (70-80% advanced technology 2, 3, 5, 7nm; 10% advanced packaging, 10-20% specialty technology).
l Depreciation expenses increase low-to-mid teens y-y in 2022.
l 2022 forecasts: semi industry (excluding memory) to grow 9%, foundry to grow 20%. For TSMC, mid-to-high twenties revenue growth in USD.
l Higher level inventory than before, above seasonality levels.
l Short-term imbalance may or may not exist. 5G, High Performance PC (or HPC) megatrend and higher silicon content should continue to boost semi industry.
l Semi industry capacity should remain tight in 2022.
l Long-term revenue CAGR is 15-20% in USD.
l HPC is the strongest sector (such as Central Processing Unit (CPU), Graphics Processing Unit (GPU), Accelerated Processing Unit (APU), etc.). “Content” is first-time mentioned semi demand driver.
l L-T margin above 53% is achievable (guide 50% above previously), ROE 25%.
(the 6 key factors to impact TSMC gross margin are: 1. price, 2. cost, 3. Product mix, 4. production utilization rate, 5. Foreign exchange rate and 6. New technology ramp)