TSMC(US:TSM) Zhi Tong Cai Jing·2025-07-17 08:28Group 1: Company Insights - TSMC's N3 capacity is very tight and will remain so for the next few years, with N5 also experiencing tight capacity. High demand is noted as many AI applications are still using N4 and will transition to N3 in the next two years [1][9][10] - The company has a competitive advantage with its giga fab clusters, where 85-90% of the equipment is similar across different processes, facilitating capacity switching [1][10] - The semiconductor opportunity in humanoid robots is still in early stages, with significant potential expected in the medical sector. It is suggested that the opportunity in robotics could be ten times that of electric vehicles (EVs) [1][19] Group 2: Demand and Supply Dynamics - AI demand is increasingly strong, with CSP CEOs acknowledging this trend. The company is working to narrow the supply-demand gap rather than achieving a balance [2][15] - The growth in edge AI is expected to take one to two years for customers to complete new designs and products, with a moderate increase in shipment volumes but a 5-10% increase in die size anticipated [3] - The company is seeing strong demand for N3, N5, and future N2 processes, with many AI data centers being announced recently [12] Group 3: Financial Guidance and Margins - The company is adopting a conservative approach to its financial guidance due to potential tariff impacts and other uncertainties, despite aiming for higher revenue targets [4] - The company expects to maintain a gross margin of 53% or higher, with various factors influencing this margin, including exchange rates [5][11] - Capital expenditure (CAPEX) guidance remains unchanged, reflecting a cautious stance due to macroeconomic uncertainties, but the company is open to increasing investment if opportunities arise [14][21] Group 4: Future Technologies and Innovations - The company is focused on advanced packaging technologies and will expand production based on customer demand. Various technologies are being developed to support customer needs [16][17] - The return on investment (ROI) for N2 is expected to be higher than for N3, with production ramp-up anticipated in the second half of this year and revenue expected to begin in the first half of next year [13] - The company is not overly concerned about potential overcapacity in mature processes, as it is developing specialized processes based on customer demand [18]