In 2022, TSMC’s revenue in Q2 was NT $534.141 billion, up 43.5% year-on-year From TSMC financial report

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TSMC, the “king of chips”, released its financial report for the second quarter of 2022, and its revenue and profit exceeded market expectations. The company’s revenue in the second quarter was NT $534.141 billion, up 43.5% year-on-year and 8.8% month on month; The net profit was NT $237 billion, an increase of 76% year-on-year and 16.9% month on month; The operating profit was NT $262.12 billion, an increase of 80% year-on-year.

The nano process will be put into production in the second half of the year

In terms of profit margin, TSMC’s gross profit margin in the second quarter was 59.1%, exceeding the company’s expectation by 56% to 58%, hitting a record high; The operating profit margin is 49.1%, which is also higher than the 45% – 47% expected by the company. In the second quarter, the after tax net profit per share reached NT $9.14, also hitting a new high, exceeding the average market expectation.

TSMC also disclosed that in the wafer foundry revenue in the second quarter, the proportion of 5-nanometer technology was 21%, and that of 7-nanometer technology was 30%. These two processes also contributed half of the wafer foundry revenue of TSMC in the second quarter. The revenue of 5nm process was still less than 7Nm in the second quarter of this year, which means that TSMC, an advanced process technology, has not replaced 7Nm process and become their largest source of revenue after two years of mass production.

As for the 3-nanometer process, TSMC said that it was still on schedule and would be put into production in the second half of the year. The more advanced 2-nanometer process is currently being developed on schedule and is expected to be mass produced in 2025.

The company expects revenue of US $19.8 billion to US $20.6 billion in the third quarter; The gross profit margin in the third quarter is expected to be 57.5% to 59.5%, the market is expected to be 56.1%, the operating profit rate is expected to be 47% to 49%, and the market is expected to be 46.1%. The company also said that the long-term gross profit margin of 53% is “achievable”; Customer demand continues to exceed supply capacity. TSMC expects its revenue (in US dollars) to increase by about 30% in 2022.

TSMC said that there will be a typical cycle of decline in chip demand in 2023, but the overall decline will be better than that in 2008.

Looking forward to this year’s capital expenditure, TSMC had expected to reach a record high of US $40-44 billion. However, the latest statement of TSMC Chairman Liu Deyin is that the scale of capital expenditure this year may fall below US $40 billion. Next year’s capital expenditure is still too early, but TSMC’s long-term growth is expected, and it will still maintain disciplined investment.

Wei Zhejia, President of TSMC, also mentioned that due to the failure of the supply chain, suppliers face the test of the supply chain, which includes advanced and mature processes. Part of TSMC’s capital expenditure this year will be deferred to 2023.

Wei Zhejia said that it is estimated that the semiconductor inventory correction in 2023 will take several quarters, but TSMC is confident that it will maintain its leadership and continue to grow, and that the company’s own set 15-20% compound annual growth (CAGR) will continue and be achieved.

With regard to the revision of semiconductor inventory in 2023, Wei Zhejia pointed out that at present, the inventory adjustment still needs to continue for a period of time, and it will continue in 2023, but TSMC is estimated to be a growth year at the time of the industrial inventory adjustment in 2023.

Manufacturers accelerate the expansion of production capacity

In 2022, the capital expenditure of the global semiconductor industry hit a record high, and semiconductor companies significantly increased capital expenditure to expand production capacity. According to icinsights, the capital expenditure of the global semiconductor industry will reach US $190.4 billion in 2022, an increase of 24% year-on-year. Before 2021, the annual capital expenditure of the semiconductor industry has never exceeded $115billion.

In order to expand their advantages in the field of wafer foundry, TSMC, Samsung and Intel increased their capital expenditure in 2022. The three companies accounted for more than half of the total industry expenditure.

TSMC had previously estimated that its capital expenditure would reach 40-44 billion in 2022, with a year-on-year increase of 33.2%-46.5%, mainly for the expansion of 7Nm and 5nm advanced processes. Samsung’s capital expenditure in the chip field in 2022 was about $37.9 billion, an increase of 12.46% year-on-year. Intel’s capital expenditure in 2022 is expected to reach $25billion.

TSMC pointed out at the recent technology forum that in addition to the construction of three 12 inch wafer plants in Arizona, Nanjing in mainland China and Kumamoto in Japan, 11 12 inch wafer plants will be built in Taiwan, China from 2022 to 2023, and the Zhunan AP6 packaging plant will be expanded to support the advanced packaging needs of 3dic.

Organization: it is expected that the growth rate of global wafer foundry will begin to slow down

Trendforce consulting said that from the second half of 2022 to 2023, high inflation pressure may continue to make global consumer demand face downward revision. However, from the supply side, the expansion process of wafer foundry is delayed by factors such as delayed equipment delivery and delayed factory construction, which is expected to cause the annual growth rate of global wafer foundry capacity to converge to 8% in 2023.

At present, it is observed that the deferred event of semiconductor equipment will have a relatively slight impact on the production expansion plan in 2022. The main impact will occur in 2023, including TSMC, UMC, PSMC, vanguard, SMIC, Globalfoundries and other industries will be affected, covering mature and advanced processes. The overall production expansion plan will be deferred for about 2-9 months.

Trendforce Jibang consulting pointed out that the delivery period of semiconductor equipment before the epidemic was about 3-6 months, and the delivery period from 2020 was forced to be extended to 12-18 months. By 2022, due to the conflict between Russia and Ukraine, logistics congestion, and insufficient production capacity of semiconductor industrial control chips, the shortage of raw materials and chips has impacted the production of semiconductor equipment. Excluding the EUV lithography machine with fixed annual output, the delivery time of other machines has been extended to 18-30 months again.

It is worth mentioning that the conflict between Russia and Ukraine and high inflation have affected the acquisition of various raw materials, as well as the continuous impact of the epidemic on human resources, which has also led to delays in the construction of semiconductor plants. This phenomenon and the delay in equipment delivery have affected the expansion plans of wafer foundries in 2023 and beyond.

FTU securities also holds the same view on the slowdown in the growth of foundry capacity. Icinsights previously predicted that the wafer foundry will continue to grow by 20% from 2022 to 2026; However, with AMD, apple and NVIDIA announcing the reduction of orders in July, FTU Securities believes that the global market scale of icinsights2022 will be reduced by 20%, that is, about US $112.3 billion.

Read more from the Securities Times: TSMC financial report: TSMC revenue in Q2 2022 was NT $534.14 billion, an increase of 8.8% month on month. TSMC financial report: TSMC revenue from January to may 2019 was NT $373.84 billion, a year-on-year decrease of 9.0% TSMC financial report: Q1 revenue in 2022 was NT $491.076 billion, a year-on-year increase of 35.5% TSMC revenue in September 2021 was NT $152.7 billion, a year-on-year increase of 20% TSMC financial report: Q3 TSMC net profit in 2021 exceeded US $5billion TSMC financial report Report: in 2016, TSMC’s revenue reached NT $947.938 billion, with a year-on-year increase of 12.4%. TSMC financial report: in 2018, TSMC’s revenue exceeded NT $1trillion for the first time, with a year-on-year increase of 5.5%. TSMC financial report: in February 2019, TSMC’s revenue was NT $60.889 billion, with a month on month drop of 22. TSMC financial report: in Q3 2018, TSMC’s net profit was about 19.96 billion yuan, with a year-on-year decrease of 0.9%. TSMC financial report: in October 2018, TSMC’s revenue was close to US $3.3 billion. TSMC financial report: Q2 2018 TSMC’s net profit was US $2.4 billion, with a year-on-year increase of 9.1%. TSMC financial report: the total revenue in Q1 in 2022 reached NT $491.08 billion, with a year-on-year increase of 35.5%. TSMC financial report: the net profit of TSMC in Q1 in 2017 was 19.85 billion yuan, with a year-on-year increase of 35.3%. TSMC financial report: the profit of TSMC in Q3 in 2014 was US $2.51 billion, with a year-on-year increase of 47%. TSMC financial report: the net profit of TSMC in Q3 in 2012 was NT $156.259 billion, with a year-on-year increase of 13.8%

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