Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) Q4 2022 Earnings Call Transcript

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C. C. Wei: Well, Charlie, let me share with you, nowadays, we look at our technologies value not only geometries shrinkage actually. More important actually is the power consumption 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. 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.

Charlie Chan: Thank you. Thanks for the explanation. 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 trend 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 themselves of total revenue contribution in HPC and the growth rate of the 8-figure business? Thank you.

Jeff Su: 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?

Charlie Chan: Yes, correct, please.

C. C. Wei: 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 etcetera. But the technology adoption, actually, it did not slow down. That’s my answer to your first follow-up question. And the whether that 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 the opportunity actually increase our opportunity. And that requires TSMC is a leading-edge technology. So we do have quite a few hyperscale customers working with TSMC to develop their own chips.

Jeff Su: Okay, thank you.

Charlie Chan: And would that cannibalize your merchant business, for example, those on change CPU, GPU are they going to be replaced or impacted by those custom design growth? If I may?

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

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

Jeff Su: 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.

Charlie Chan: Thank you.

Operator: Thank you. And our next question is come from Sunny Lin with UBS. And Sunny, please go ahead.

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