TSMC(US:TSM)2025-10-13 01:00Summary of Conference Call Notes Industry and Company Involved - Industry: Semiconductor and AI Supply Chain - Company: TSMC (Taiwan Semiconductor Manufacturing Company) Key Points and Arguments TSMC's Market Position and Financial Outlook - TSMC's current P/E ratio is 18, which is relatively low compared to other regional stocks like Hynix, suggesting a buying opportunity before the upcoming legal week [3] - TSMC expects to achieve flat revenue in Q4 2025, with an annual revenue growth guidance revised up to approximately 33% [3] - AI revenue for TSMC is projected to grow steadily each year, driven by orders from NVIDIA and AMD [3] AI Demand and Capital Expenditure - Strong AI demand is anticipated, with AI server capital expenditures expected to increase significantly by at least 50% by 2026 [5] - The number of server racks for 2025 has been revised up to 28,000, with NVIDIA chips expected to enter a destocking phase in Q1 2026 [5] - TSMC's capacity is expected to meet customer demand by the end of 2026, potentially expanding to between 110,000 and 120,000 units depending on NVIDIA's forecasts [5] Storage Market Dynamics - The DRAM and NAND spot market is experiencing tight inventory, leading to price increases, with cloud customers actively replenishing stock [10] - A price increase of over 15% is expected in Q4, driven by strong demand for enterprise-level ESSD [10][4] - The overall pricing competition for commodity DRAM and HBM is expected to decrease in 2026 [2] Recommendations for Investment - Recommended stocks include TNC and wafer foundry KYEC, with a preference for Alchip in the third-party service sector [9] - For non-AI related stocks, Global Wafers and China SPE are favored, while EchoVue and MediaTek are advised to be avoided [9] Project Impacts - MediaTek has low order opportunities in the Meta project, relying heavily on a single customer, which poses risks [6] - Adobe's project mass production has been delayed until Q2 2026, but annual revenue is expected to remain around $170 million [6] - GUC is expected to see increased volume in Google CPU projects and has secured design service contracts with Meta and Kiosha, indicating strong growth momentum [6] Chinese AI Capital Expenditure - China's AI capital expenditure is projected to reach $5 billion, with training chips primarily relying on existing NVIDIA cards or overseas data [7] - RTS Pro 6,000D B40 chip demand remains high, with competitive pricing in inference applications [8] Future Supply and Market Trends - The supply of computing power in the next 10 months will increasingly depend on imported chips [9] - The semiconductor market is currently in an upward cycle, expected to last 4-6 quarters, with no significant price declines anticipated in 2026-2027 due to AI demand and traditional recovery [11] Specific Company Insights - NovaTech has introduced new products with positive customer feedback, leading to an optimistic outlook for the second half of the year [15] - Concerns regarding the production capacity of domestic AI chips and the impact of NVIDIA's new products remain [20][23] Conclusion - The semiconductor industry, particularly TSMC, is poised for growth driven by AI demand and strategic investments, while the storage market is experiencing significant price increases due to tight supply conditions. Investment recommendations focus on companies with strong growth potential and caution against those with high single-customer dependency.