TSMC's price rise has put chip companies in a dilemma

    TSMC will raise the price of the whole manufacturing process by 6% in 2023. IC design customers are facing a dilemma. In particular, some applications are beginning to loosen at this stage. It is necessary to reduce the amount of chips, but it is difficult to refuse the price increase request made by important partners.

Industry insiders pointed out that the previous sharp rise in the quotation of wafer foundry was mainly concentrated in the second and third tier factories. Even due to the shortage of supply, the quotation of some wafer foundry factories adopted the "quarterly increase" response, resulting in the price being much higher than that of the first tier factories. Many IC Design factories prefer to switch to the first tier factories for chip production.

At a time when the quotation remains high, people in the industry said that they have seen a significant correction in the application demand of some IC, mainly in the fields related to mobile phone consumer IC and consumer PC, as well as home appliance microcontroller (MCU).

If the demand of some manufacturers in the mainland continues to be sluggish in the first half of this year, it is feared that there will be more short-term changes in some key areas of the IC market. If the demand of some manufacturers in the mainland continues to be sluggish, it is also feared that there will be some changes in the previous half of this year.

TSMC will challenge to earn four shares next year

Since 2023, TSMC has increased the price of foundry wafers for a full range of manufacturing processes by 6%, which is favored by legal persons. Driven by the price increase benefits and production optimization, TSMC's net profit per share next year is expected to reach 36-40 yuan, with the opportunity to earn four share capital and reach a new high. At the same time, it will ensure that the annual gross profit margin will remain above 53%.

TSMC has never commented on prices and corporate financial estimates. The legal person believes that TSMC's performance has grown steadily for a long time. After deducting the established capital expenditure, if the future profit continues to grow and the cash flow is stable, it is expected to increase the amount of quarterly interest distribution as soon as this year. It is expected that the shareholders will also pay attention to when the company will increase the quarterly interest distribution at the shareholders' meeting of TSMC on June 8 this year.

In terms of this year's operation, Wei Zhejia, President of TSMC, announced at the law conference a few days ago that the growth rate of TSMC's annual US dollar revenue has the opportunity to exceed the high standard. According to external interpretation, the annual growth rate of TSMC's US dollar revenue this year is expected to reach more than 29%, and the fastest challenge is that the annual revenue will exceed 2 trillion yuan this year.

TSMC's profits soared steadily. For shareholders, the interest distribution did not grow at the same rate. In addition, the holding cost continued to rise, and shareholders continued to reflect relevant opinions to the company. TSMC raised the quarterly interest distribution on June 9 last year. At that time, the board of directors decided to slightly increase the quarterly interest distribution by 10% to 2.75 yuan. This year, it has not announced the plan to increase the interest distribution.

The legal person estimates that TSMC will operate safely in the next two to three years, and will continue to benefit from the leading advanced process to bring abundant cash flow. It is estimated that the profit will continue to grow in 2023. With the price rise effect and the continuous transfer of high-speed computing applications to advanced processes, it is estimated that the net profit per share will continue to challenge a new high in 2023, and the annual gross profit margin will slightly exceed 53%.

Industry insiders pointed out that for TSMC, the production of 16 nm process has been proficient, 7 nm has gradually stepped into the mature production track, and the mass production of 5 nm family has gradually moved closer to skilled production. With the subsequent upgrading of more 16 nm process products to 5 nm and 7 nm production, the quotation will remain high-grade.

The industry believes that TSMC will still have long-term advance payment support with customers in the future downturn. It is estimated that TSMC's revenue is more than eight years, Chengdu has customer advance payment coverage, and the rest can also be flexibly dispatched to support the peripheral applications required by advanced process customers.

In addition, the legal person also estimated that if the total accumulated advance payment of TSMC customers this year is estimated to exceed 150 billion yuan, it can be determined that TSMC will complete 13 months of output in one year in 2022, and there will be considerable advance payment in 2023.

TSMC stressed at the legal presentation meeting in April this year that more than 53% of the medium and long-term gross profit margin is an achievable goal. It is believed that TSMC will continue to reflect the cost of plant expansion and construction and transfer the price difference of increased production costs to customers, which will help maintain a stable gross profit margin in 2023.

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