TSMC(US:TSM)2025-09-12 07:28TSMC (2330.TW) Conference Call Summary Company Overview - Company: Taiwan Semiconductor Manufacturing Company (TSMC) - Ticker: 2330.TW - Event: Goldman Sachs Communacopia + Technology Conference 2025 - Date: September 8-11, 2025 - Presenters: Wendell Huang (CFO), Jeff Su (Head of Investor Relations) Key Industry Insights 1. Advanced Node Capacity: - TSMC's advanced node peak capacity is expected to be higher than previous nodes due to increased demand from smartphone and high-performance computing (HPC) sectors [2][3] - N2 technology is projected to contribute 11.5% of wafer revenue in 2026, significantly higher than N3's 5.1% in its first year [3] 2. N3/N5 Capacity Growth: - TSMC maintains over 90% tool commonality between adjacent advanced nodes, allowing for flexible capacity adjustments to meet AI demand [2][7] - The company plans to convert capacity from N7 to N5 and N5 to N3 to support strong AI demand, leading to tight capacity in advanced nodes [7] 3. Advanced Packaging Expansion: - TSMC is allocating 10-20% of capital expenditures to advanced packaging, which is expected to grow faster than the corporate average [2][8] - Advanced packaging is projected to account for over 10% of revenue in 2025, up from 8% in 2024, with increasing adoption in non-AI applications [8] 4. Long-term Gross Margin (GM) Target: - Despite overseas expansion plans, TSMC's long-term GM target of 53%+ remains achievable [2][9][11] - The company plans to mitigate GM pressure through geographical diversification, cost efficiency, and leveraging government support [11] 5. Revenue Growth Forecast: - TSMC reaffirms a close to 20% compound annual growth rate (CAGR) for the 2024-2029 period, with potential upside driven by strong N2 demand and tightness in N3 and N5 nodes [12] Financial Metrics - Market Capitalization: NT$32.2 trillion / $1.1 trillion - Revenue Projections: - 2024: NT$2,894.3 billion - 2025E: NT$3,667.9 billion - 2026E: NT$4,211.2 billion - 2027E: NT$4,873.4 billion - EPS Projections: - 2024: NT$45.25 - 2025E: NT$60.36 - 2026E: NT$68.49 - 2027E: NT$77.56 - Price Target: NT$1,370.00 (upside of 10.5%) [18] Investment Thesis - TSMC is positioned as a leading global foundry with over 60% market share, benefiting from its technology leadership in AI, 5G, HPC, and EV sectors [13][15] - The stock is rated as a "Buy" due to its attractive valuation and long-term growth prospects [14][15] Key Risks 1. Deterioration in end-demand recovery affecting capacity utilization [16] 2. Slower customer node migrations impacting revenue [16] 3. Delays in 5G penetration affecting semiconductor growth [16] 4. Poor yields or execution leading to profitability issues [16] 5. Increased competition affecting pricing and margins [16] 6. Unfavorable foreign exchange trends or cost increases impacting margins [16] Conclusion TSMC's strong positioning in advanced technology nodes and packaging, along with a robust growth forecast, supports a positive investment outlook despite potential risks associated with market dynamics and competition.