Or is the cycle time between you put the money in, put the investment into the time you harvest the investment, the generated revenue is getting a little bit longer than usual? So hopefully, you can clarify this.Jeff Su Okay, Charles. That is a very long question. Please let me try to summarize it a little bit into 2 parts. I think Charles’ question, he does rightly note that on our balance sheet, equipment under installation reached roughly about $40 billion at the end of 2022. He notes this is a very high level. His concern, maybe Wendell can address, as we also guided for $32 billion to $36 billion CapEx this year, so is this number going to only increase? And what is driving this? Is this preparing for significant revenue opportunities in 2024 and beyond?
So this is his first question.Wendell Huang Okay, Charles. The $40 billion asset under construction at the end of last year primarily come from 2 nodes, an N3 node and the N5 node. N3 node, that is because we’re ramping up the N3 nodes. And N5, we continue to increase our capacity. Therefore, these 2 add together, you see a big — a bigger asset under construction at the end of last year. From what I can see going forward, this number will be — will gradually come down in the next few years.Jeff Su Okay, Charles.Charles Shi Yes. Maybe the other part of this question is because you are proceeding with that $32 billion to $36 billion, that — it’s hard for me to reconcile how this number comes down, at least in the next one year or so over the next 12-month horizon.
How do I reconcile that? Or are you expecting, like, next year, there’s going to be a significant revenue — incremental revenue come in to TSMC?Wendell Huang Charles, as we said, it’s too early to talk about next year. But we also said that if we continue to see the future growth opportunities there, we will continue to invest.Charles Shi May I ask the second question?Jeff Su Sure.Charles Shi Yes. So the second question is about CHIPS Act. I heard you provided some help to the question from another analyst. But can you kind of quantify the potential benefits from the U.S. CHIPS Act, the manufacturing incentives, which to my understanding, including both grants and investment tax credit? I know this is kind of relevant to our modeling going forward.
And maybe if I may, can I ask — one of your U.S. peers seems to be favoring investment tax credit over grants. They seem to only want the investment tax credit, not the grants. What is TSMC’s thinking between these 2 different funding opportunities?Jeff Su Okay. Thank you, Charles. So Charles’ second question is around the CHIPS Act. He is asking if you can quantify the potential benefits, both in terms of grants and also in terms of tax credits. And also, do we favor one over the other or preference for one over the other?Wendell Huang Charles, as I said, we are in the process of the application, so we’re not in a position to disclose any details. I will refrain from sharing more information at this moment.Jeff Su Okay. Thank you, Wendell.
All right. So thank you, everyone. 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, and the transcript will become available 24 hours from now. Both of these will be available through TSMC’s website at www.tsmc.com. So thank you, everyone, for joining us today. We hope you all continue to stay well, and we look forward to joining us again next quarter. Goodbye, and have a great day.
