Taiwan Semiconductor Manufacturing Company Limited Q1 FY2022 Earnings Call

· Earnings call transcript and AI-powered summary

Financial Performance (Q1 2022)

  • Revenue: USD 17.6 billion, up 11.6% quarter-over-quarter (QoQ), driven by strong HPC and automotive demand.
  • Gross Margin: 55.6%, up 2.9 percentage points QoQ due to cost improvements, value-selling, and FX tailwinds.
  • Operating Margin: 45.6%, up 3.9 percentage points QoQ, helped by lower vaccine donation expenses.
  • EPS: TWD 7.82; ROE: 36.2%.
  • Advanced technologies (7nm and below) contributed 50% of wafer revenue.

Platform Revenue Mix (Q1 2022)

  • Smartphone: 40% (+1% QoQ).
  • HPC: 41% (+26% QoQ), now TSMC's largest segment.
  • IoT: 8% (+5% QoQ).
  • Automotive: 5% (+26% QoQ).
  • DCE: 3% (+8% QoQ).

Balance Sheet and Cash Flow

  • Cash and marketable securities: TWD 1.3 trillion.
  • CapEx: USD 9.38 billion in Q1; full-year 2022 CapEx unchanged at USD 40–44 billion.
  • Cash from operations: TWD 372 billion; cash balance increased by TWD 87 billion.

Q2 2022 Guidance

  • Revenue: USD 17.6–18.2 billion, ~1.9% QoQ growth at the midpoint.
  • Gross Margin: 56–58%, benefiting from more favorable FX (USD/TWD 28.8).
  • Operating Margin: 45–47%.

Key Management Commentary

Demand and Market Trends

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Jeff Su: Good afternoon, everyone, and welcome to TSMC’s First Quarter 2022 Earnings Conference Call. This is Jeff Su, TSMC’s Director of Investor Relations and your host for today. To prevent the spread of COVID-19, TSMC is hosting our earnings conference call via live audio webcast through the company’s website at www.tsmc.com, where you can also download the earnings release materials. The format for today’s event will be as follows: first, TSMC’s Vice President and CFO, Mr. Wendell Huang, will summarize our operations in the first quarter 2022, followed by our guidance for the second quarter 2022. Afterwards, Mr. Huang and TSMC’s CEO, Dr. C.C. Wei, will jointly provide the company’s key messages. Then we will open the line for Q&A. As usual, I would like to remind everybody that today’s discussions may contain forward-looking statements that are subject to significant risks and uncertainties, which could cause actual results to differ materially from those contained in the forward-looking statements. Please refer to the Safe Harbor notice that appears on our press release. And now I would like to turn the call over to TSMC’s CFO, Mr. Wendell Huang, for the summary of operations and the current quarter guidance. Wendell Huang: Thank you, Jeff. Good afternoon, everyone. Thank you for joining us today. My presentation will start with financial highlights for the first quarter 2022. After that, I will provide the guidance for the second quarter. First quarter revenue increa

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