But for TSMC, we look at our sales. The AI’s CAGR, that’s the gross rate every year is about 50%, and we are confident that we can capture more opportunities in the future. So, that’s what we said that up to 2027, we are going to have high teens of the revenue from very narrow, we define the AI application processor, not to mention about the networking, not to mention about all others. And to further extend our value, actually, all the edge device including smartphone, including the PC, they start to put the AI’s application side, they have some kind of a neural processor, for example. So, the silicon content will be greatly increased. Although the unit it’s actually a low single digit in CAGR, but the silicon content is more important. So, put all together, if we run some of the AI related application, actually, it’s quite a big amount for TSMC to grow.
Jeff Su: Okay. Bruce, do you have a second question, please.
Bruce Lu: The second question is more for the technology leadership. I mean, as we’re moving into the nanosheet or advanced node, we see another technology defined DeFi, nowadays. For example, like a high-NA, EUV tools, TSMC seems to have a different view with other peers. I mean, in the past, like, 20 years, 30 years, there are several technology DeFi that TSMC always choose the right decisions, right? So, can you tell us that why you choose your current route compared to your peers? What is the pros and cons? What’s the advantage? And how confident that TSMC can leverage that to be the key sectional factor for the leading edge?
Jeff Su: Okay. Bruce’s second question is in regards, I think, to technology development and decision-making, basically. He notices that, today there’s divergence or his words DeFi between different companies’ technology decision whether to adopt nanosheet transistor structure, whether to adopt high-NA tools, he knows in the past that this has always occurred in our industry, but TSMC has somehow managed to make the right decision. So, he is asking especially how, what do we look at or evaluate in our decision-making process? What are the pros and cons and advantages and probably most importantly, how confident are we about our technology decisions going forward whether nanosheet or high-NA given our competitors’ actions?
C. C. Wei: Bruce, you asked a very technical question, I’m not very sure everybody know the high-NA or is nanosheet or that all run, but let me answer the question. We always make the right decision and our track record show that. Is that enough? Okay. Let me elaborate a little bit more because of technology itself is no value, only one can serve your customer. So, we always work with our customer to give them the best transistor technology and the best power-efficient technology and at a reasonable cost. More importantly, the technology maturity that in the high-volume production, that’s all important. Everything comes together, so every time we know that there are some new structure, new tools such as high NA UV, we look at it carefully, look at the maturity of the tools, look at the cost of the tools and look at the schedule of that, how to achieve it.
We always make the right decision at the right moment to serve our customers. And so far, all our customers are happy with TSMC’s progress. Did I answer your question? Almost everybody work with TSMC on 2-nanometer, except one.
Jeff Su: All right. Let’s go to the online. Take the next two questions from the participants, who are dialing in via the conference call, please. Operator, could you please state the name and company.
Operator: Our question from the line is Gokul Hariharan from JPMorgan.
Gokul Hariharan: Yes. [indiscernible] I simply mentioned that the AI proposition [indiscernible].
Jeff Su: Okay. Gokul, I need you to slow down a bit because the line is not that clear. I do think I got his question, which is, he wants to confirm, C. C., you mentioned that, we have a very narrow definition, we call server AI processor contribution and that you said it can be high teens in five years’ time because the last time we said low teens.
C. C. Wei: The demand is suddenly being increased since last, I think last year, the Q1, up to March or April, when ChatGPT became popular. So, customer respond quickly and ask TSMC to prepare the capacity both in front-end and the back-end and that’s why we have confidence that this AI’s revenue will increase. We only narrow down to the AI application process, by the way. So, we look at ourselves that, we prepare the technology and the capacity in both our front-end and also our back-end. And so, it’s in the early stage so far today. We already see the increase the momentum and we expect, if you guys continue to track this one, the number will increase. I have confidence to say that, although I don’t know how much.
Jeff Su: So high teens, you confirm?
C. C. Wei: Or higher.
Jeff Su: Okay. Gokul, hopefully that clarifies that first question.
