Core Viewpoint - TSMC is shifting its advanced semiconductor manufacturing to the U.S. due to changing global semiconductor dynamics, with plans for multiple factories producing cutting-edge technologies [2][3]. Group 1: TSMC's U.S. Expansion Plans - TSMC initially planned to keep advanced processes domestically but announced in 2020 its intention to build a factory in Arizona, producing 4nm chips, which is now operational [2]. - The cost of production in the U.S. is expected to be 5% to 20% higher compared to domestic production, as noted by AMD's CEO [2]. - TSMC's second U.S. factory is set to produce 3nm chips, with production now delayed to 2028 from the original 2026 timeline [2]. - A third factory (F21 P3) is planned for 2028, which will include advanced packaging facilities, allowing for integrated production and packaging in the U.S. [2]. Group 2: Technological Advancements - The third factory will upgrade to 2nm (N2) and A16 processes, aligning closely with TSMC's domestic technology levels, indicating a transfer of core technology to the U.S. [3]. - The A16 process is expected to enhance speed by 8-10% at the same voltage, while reducing power consumption by 15-20%, with a density increase of up to 1.10 times, making it suitable for high-performance computing applications [3]. Group 3: Financial Outlook and Market Conditions - TSMC's revenue is projected to decline in Q4 compared to Q3, marking a potential first in nearly a decade where Q4 performance does not exceed Q3 [5][6]. - The semiconductor demand is expected to weaken due to tariff impacts and a conservative consumer outlook, particularly affecting PC and smartphone markets [5]. - Despite strong demand in AI and high-performance computing sectors, nearly 40% of TSMC's applications are in consumer markets, which are more sensitive to economic fluctuations [5].

Group 1 - The core viewpoint indicates that the impact of U.S. tariffs is leading to a conservative consumer outlook for the second half of the year, with expectations that demand for terminal products like PCs and smartphones during the year-end holiday season may not meet expectations [1] - TSMC's orders related to consumer applications are weakening, and there are concerns that TSMC's revenue in Q4 may decline from the historical high in Q3, marking the first time in nearly a decade that Q4 performance may not exceed Q3 [1] - Approximately 40% of TSMC's terminal applications are in the consumer sector, which is being affected by tariffs and economic changes, leading to a slowdown in growth for the peak season in Q4, although it is still expected to outperform the same period last year [1] Group 2 - TSMC's revenue in the first half of the year increased by about 40% year-on-year, with Q4 revenue estimated to be between $31.8 billion and $33 billion, averaging $32.4 billion, indicating a quarter-on-quarter decline despite being better than the same period last year [2] - The estimated decline in Q4 revenue is projected to be in the high single to mid-double digit percentage range compared to Q3 [2]