Summary of Conference Call Notes on Taiwan Semiconductor Industry Industry Overview - **Industry**: Semiconductors - **Key Companies**: TSMC (Taiwan Semiconductor Manufacturing Company), GlobalWafers (GWC) Core Insights and Arguments 1. **US Tariff Announcement**: On August 6, 2025, President Trump announced a proposed 100% tariff on imported semiconductor chips, with exemptions for companies building manufacturing facilities in the US [1] 2. **Impact on TSMC and GWC**: TSMC and GWC are likely to be exempt from the tariff due to their US operations and expansion plans, positioning them favorably for US customers seeking domestic sourcing [2][3] 3. **Investor Sentiment**: The tariff exemption is expected to alleviate investor concerns regarding semiconductor tariff uncertainties, which have been a significant valuation overhang [2] 4. **TSMC's Market Performance**: TSMC's share price has increased by 15%, but it has underperformed compared to other AI-related companies, indicating investor concerns over geopolitical risks [3] 5. **Earnings Visibility**: The tariff exemption is anticipated to enhance TSMC's earnings visibility and reduce downside risks to its growth outlook, as management has already factored potential tariff impacts into their 2025 guidance [3] 6. **Mature Node Capacity**: The proposed tariff exemption may limit downside risks to TSMC's mature node capacity, potentially making its pricing more competitive [4][7] 7. **Vanguard and UMC Implications**: Vanguard may face negative implications due to lack of US exposure, while UMC's collaboration with Intel on a 12nm process lacks clarity on tariff exemption eligibility [8] Company-Specific Developments 1. **TSMC's US Investment**: TSMC plans to invest an additional US$100 billion in advanced semiconductor manufacturing in the US, bringing its total investment to US$165 billion, including multiple fabrication plants and R&D centers [9] 2. **GWC's Expansion**: GWC is expanding its capacity in the US, with significant customer interest in US-based products due to localization trends. Revenue is expected to ramp up gradually from 2H25 to 1H26 [10] Investment Thesis 1. **TSMC**: TSMC is viewed as a leading global foundry with over 60% market share, positioned to capture long-term growth opportunities in AI, 5G, HPC, and EV sectors. The stock is rated as a Buy with a target price of NT$1,370 [12][13][14] 2. **GWC**: GWC is rated Neutral due to slower end-demand recovery and high inventory levels among key customers, with a target price of NT$380 [16][19][18] Risks and Considerations 1. **TSMC Risks**: Key risks include deterioration in end-demand recovery, slower customer node migrations, and increased competition affecting profitability [15] 2. **GWC Risks**: Risks include fluctuations in end-demand recovery, competition, and production costs [20] Additional Insights - The tariff situation is expected to shift the cost dynamics in the semiconductor industry, potentially benefiting companies like TSMC that can offer competitive pricing while ensuring supply chain security [7]

Financial Data and Key Metrics Changes - The company reported revenue of $195 million and non-GAAP earnings per diluted share of $1.13, both exceeding expectations [6][22] - Bookings in the second quarter were $96 million, reflecting a book-to-bill ratio of 0.8 times, slightly down sequentially [6][25] - GAAP gross margins were 44.9%, exceeding the outlook of 41.7%, while non-GAAP gross margins were 45.2% compared to an expected 42% [25][26] - The company generated approximately $38 million in free cash flow in the second quarter [28] Business Line Data and Key Metrics Changes - System revenue was $134 million, and CS and I revenue was $61 million, both slightly above expectations [22] - Shipments in the power business remained flat quarter-over-quarter, with a focus on silicon carbide applications [8][14] - Revenue from other power applications grew sequentially, primarily due to growth in China [14] - Advanced logic remains an underpenetrated market, with a forward order received in the second quarter [15] Market Data and Key Metrics Changes - China accounted for 65% of total shipped system sales, up from 37% in the prior quarter [22] - The U.S. contributed 19% to system sales, while Korea declined to 8% [22] - The company anticipates that second-half revenue in China will be similar to the first half due to customers digesting previous investments [22] Company Strategy and Development Direction - The company is focused on innovation and deep engagement with customers on their technology roadmaps [19] - CS and I revenue made up approximately 30% of total revenue, reflecting the strength of the installed base [20] - The company is managing its cost structure prudently while ensuring resources for growth [21] Management's Comments on Operating Environment and Future Outlook - Management noted macroeconomic uncertainty and cyclical digestion in 2025 but expressed confidence in the company's ability to navigate these challenges [19][32] - The company expects modest improvement in revenue in 2025, driven by pockets of demand [13] - The outlook for the third quarter includes expected revenue of approximately $200 million and non-GAAP diluted earnings per share of about $1 [30] Other Important Information - The company repurchased approximately $45 million in shares during the second quarter, with $168 million remaining in share repurchase authorization [29][68] - The company continues to monitor the tariff environment and believes it is well-positioned to respond to changes [30] Q&A Session Summary Question: Initial indications of wafer start growth in memory market for 2026 - Management indicated that while they are not forecasting for 2026 yet, they expect to see new capacity come online in 2025 and early 2026 [36][37] Question: Outlook for the general mature marketplace - Management believes revenue for 2025 will be slightly up, but not due to general mature, which is currently in a digestion period [38] Question: Silicon carbide customers using current period for R&D - Management confirmed that customers are indeed acquiring tools for R&D, which may lead to increased demand for volume production in the future [41][42] Question: Drivers behind strong performance in CS and I - Management attributed the strong performance to upgrades and related activities rather than tariff pull-ins [64][66] Question: Competition in China - Management noted that competition in China is still immature and closely monitored, with no significant threats outside of China [72][75] Question: Backlog composition and timing - The backlog consists solely of systems-related orders and is expected to carry into 2026 [77] Question: Reconciliation of strong China EV sales with flat sales projection - Management explained that while EV sales are strong, the capacity built in 2024 is leading to a focus on productivity and efficiency rather than new capacity additions [82][84]

Market Leadership - Tesla is the top-selling EV brand in Europe for the first half of 2025 [1] - Model Y is the top-selling EV in Europe with 69,766 units [1] - Model 3 ranked 3 overall in European EV sales [1]

hot take: being able come up with a reasonably accurate ev on the fly is one of the most underrated skills ...

Thanks, Sarah. Well, it's called the Xiaomi U7. This is an SUV that's going head-to-head with Tesla's Model Y here at $35,000.It's just slightly less than the Model Y. Um, it also includes a driver assistance technology. This is their most advanced one.They give that one away for free. So, that's unlike uh Tesla. And then both are seen as performance cars.And the Xiaomi is seen as one that has a bit of a a better range. Now in China, of course, as you guys were talking about, there are so many car makers th ...

Rivian's new truck and SUV EVs have a surprise: the ability to perform a kick turn with a single button press, no steering required.Check out our full hands on: https://t.co/fNwbz0oWgc https://t.co/wxuGyy5tJh ...

Core Insights - The article discusses the current trend of investors focusing on high-growth sectors such as AI and electric vehicles (EVs), emphasizing the importance of maximizing returns on investments [1]. Group 1: Analyst Background - The analyst has a background in petroleum and gas engineering and has transitioned into finance, driven by an interest in business growth and market reactions [1]. - The analyst holds FMVA® and BIDA® certifications from the Corporate Finance Institute, indicating a strong foundation in financial analysis [1]. - The focus areas include technology, infrastructure, and internet services, with a preference for companies that exhibit strong fundamentals and growth potential [1]. Group 2: Investment Philosophy - The article aims to foster thoughtful discussions around stocks, emphasizing long-term returns over short-term market fluctuations [1]. - The content is designed to connect with other investors who share a similar focus on sustainable investment strategies [1].

Market Trend - Chinese smartphone maker Xiaomi has successfully manufactured a car, achieving what Apple failed to do despite a decade-long attempt [1] Company Strategy - Xiaomi has surpassed Apple's EV ambitions [1]

Production & Sales - Lucid is pushing to ramp up Gravity production [1] - Lucid sales are inching forward [1]

Rivian 投资价值分析 - Value Works 认为 Rivian 是一家价值股，因为其资产价值超过 140 亿美元的市场估值 [2] - Rivian 预计未来三年内收入将从 50 亿美元增长到 150-200 亿美元 [3] - Rivian 的电动汽车销量达到每年 45,000 辆，并计划推出新款车型，预计产量将达到数十万辆 [2][3] - Rivian 已基本完成早期阶段的资本消耗，目前拥有正的毛利率 [4] - 大众汽车对 Rivian 投资 10 亿美元，表明其对 Rivian 技术的认可 [4] - Rivian 的车辆价格较高，主要面向不受税收抵免政策影响的客户群体 [6] 电动飞机 Joby 投资价值分析 - Value Works 以略高于现金价值的价格（约 30 亿美元估值）收购 Joby，认为其具有长期增长潜力 [11][12] - Joby 电动垂直起降飞机单价为 50 亿美元，预计销量达到数亿美元 [13] - Joby 在电动垂直起降飞行器领域处于领先地位，在飞机制造和认证方面领先竞争对手 Archer 一年半 [15] 市场竞争与挑战 - 中国电动汽车制造商进入美国市场面临品牌认知和消费者信任的挑战 [8]