Taiwan Semiconductor Manufacturing Company Limited Q3 FY2022 Earnings Call

· Earnings call transcript and AI-powered summary

Overview

  • Q3 2022 revenue reached USD 20.2 billion (NT$613.1 billion), up 11.4% sequentially in USD terms due to strong 5nm demand.
  • Gross margin improved to 60.4%, up 1.3 percentage points from Q2, benefiting from a favorable exchange rate and cost improvements.
  • Operating margin rose to 50.6% (up 1.5 percentage points from Q2).
  • EPS was NT$10.83; ROE reached 42.9%.
  • TSMC expects Q4 2022 revenue to be USD 19.9–20.7 billion, roughly flat quarter-over-quarter at midpoint.

Technology & Product Mix

  • 5nm contributed 28% of wafer revenue; 7nm accounted for 26%.
  • Advanced technologies (7nm and below) made up 54% of revenue.
  • Platform contributions (QoQ growth):
    • Smartphone: +25% (41% of revenue)
    • HPC: +4% (39%)
    • IoT: +33% (10%)
    • Automotive: +15% (5%)
    • DCE: -2% (2%)

Balance Sheet & Cash Flow

  • Cash and marketable securities: NT$1.5 trillion.
  • Generated NT$413 billion in operating cash flow; CapEx spend was NT$266 billion in Q3.
  • 2022 CapEx guidance cut to around USD 36 billion, below the previous USD 40–44 billion range (half due to tool delays; half due to capacity optimization).

Key Management Commentary

Profitability & Outlook

  • Gross margin outperformed guidance due to a stronger USD vs NT$.

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Jeff Su: Good afternoon, everyone, and welcome to TSMC's Third Quarter 2022 Earnings Conference Call. This is Jeff Su, TSMC's Director of Investor Relations and your host for today. 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. If you are joining us through the conference call, your dial-in lines are in listen-only mode. 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 third quarter 2022, followed by our guidance for the fourth 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 in 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. And thank you for joining us today. My presentation will start with financial highlights for the third quarter 2022. After that, I will provide the

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