Taiwan Semiconductor Manufacturing Company Limited Q4 FY2021 Earnings Call

· Earnings call transcript and AI-powered summary

Financial Highlights

  • Q4 2021 revenue grew 5.7% QoQ in NT$ (5.8% QoQ in USD), supported by strong 5nm demand.
  • Gross margin improved to 52.7%, up 1.4 percentage points from Q3 2021 due to cost improvements.
  • Operating margin increased to 41.7%, +0.5 percentage points QoQ.
  • Q4 EPS reached NT$6.41; ROE was 31.3%.
  • Technologies at 7nm and below accounted for 50% of wafer revenue (flat QoQ; up from 41% in 2020 full year).
  • Platform breakdown (QoQ): Smartphone +7% (44% of revenue), HPC +3% (37%), IoT +3% (9%), Automotive +10% (4%), DCE +2% (3%).
  • Full-year 2021 revenue grew 24.9% YoY in USD terms to $57B; NT$ revenue grew 18.5% YoY.
  • 2021 gross margin was 51.6% (down ~2 percentage points from FX headwind); operating margin 40.9%.
  • 2021 EPS up 15.2% YoY to NT$23.01; ROE 29.7%.

Cash Flow and Balance Sheet

  • Q4 operating cash flow: NT$378B, including NT$80B customer prepayments.
  • CapEx in Q4: NT$236B (US$8.46B).
  • Cash balance rose NT$211B to NT$1.1T.
  • 2021 full-year CapEx: NT$839B; operating cash flow NT$1.1T; free cash flow NT$273B.
  • Prepayments totaled US$6.7B by year-end 2021.

Q1 2022 Guidance

  • Revenue expected between US$16.6B–$17.2B (midpoint implies +7.4% QoQ growth).

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Jeff Su: Good afternoon, everyone, and welcome to TSMC's Fourth Quarter 2021 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. 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 fourth quarter 2021, followed by our guidance for the first quarter 2022. Afterwards, Mr. Huang and TSMC's CEO, Dr. C.C. Wei, will jointly provide the Company's key messages. Then TSMC's Chairman, Dr. Mark Liu, will host the Q&A session, where all three executives will entertain your questions. 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. Happy New Year, everyone. Thank you for joining us

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