TSMC will increase the price of its entire process by 6% in 2023, and IC design customers are facing a dilemma, especially at this stage when some applications are beginning to loosen and they need to reduce the amount of wafer input, but they find it difficult to refuse price increase requests from important partners.Industry insiders pointed out that the previous sharp increase in wafer foundry quotations was mainly concentrated in second- and third-tier factories. Due to supply and demand imbalance, some wafer foundries even adopted "quarterly increase" quotations to respond, resulting in prices far higher than those of first-tier factories. Many IC design companies would rather switch to single-tier factories for wafer production.While quotations remain high, industry insiders say they have seen a significant correction in demand for some IC applications, mainly in consumer ICs for mobile phones, consumer PC-related fields, and home appliance microcontrollers (MCUs).Industry analysts believe that due to the poor market conditions in related fields, some previous long-term orders may also have short-term changes. Individual manufacturers have different response measures. The key still lies in when the demand in the mainland market will recover. If the situation continues to be sluggish, more consumer IC applications may be adjusted in the second half of this year.TSMC: Next year, we will challenge ourselves to earn four times the equity
TSMC will increase the price of its full range of process wafer foundry by 6% starting from 2023. Analysts are optimistic that driven by the price increase effect and production optimization, TSMC's net profit per share is expected to reach 36 to 40 yuan next year, with a chance to earn four times the equity, setting a new record. At the same time, it will ensure that the annual gross profit margin remains above 53%.TSMC has never commented on prices or financial estimates by legal persons. Legal persons believe that TSMC's performance has been growing steadily over the long term. After deducting the established capital expenditures, if future profits continue to grow and cash flow is stable, it is expected that the quarterly dividend amount will be increased again this year at the earliest. It is expected that at TSMC's regular shareholders meeting on June 8 this year, shareholders will also pay attention to when the company will increase its quarterly dividend again.Looking at this year's operations, TSMC President Wei Zhejia recently announced at an earnings conference that TSMC's full-year dollar revenue growth rate has the opportunity to exceed the high target. Outsiders interpret TSMC's dollar revenue growth rate this year as expected to reach more than 29%, and the company may challenge the 2 trillion yuan mark in annual revenue as early as this year.TSMC's profits have been rising steadily, but for shareholders, the dividend has not increased year-on-year, and the cost of holding shares has continued to rise, so shareholders continue to express their concerns to the company. TSMC raised its quarterly dividend on June 9 last year, when the board of directors decided to slightly increase the quarterly dividend by 10% to NT$2.75. This year, it has not yet announced a dividend increase plan.Analysts estimate that TSMC will have no operational problems in the next two to three years and will continue to benefit from the ample cash flow brought by its leading advanced process technology. It is expected that profits will continue to grow in 2023. With the effect of price increases and the continued transition of high-speed computing applications to advanced processes, it is estimated that earnings per share will continue to challenge new highs in 2023, and the annual gross profit margin will slightly exceed 53%.Industry insiders pointed out that for TSMC, the 16nm process production is already mature, and the 7nm process is gradually entering a mature production track. The mass production of the 5nm family has also gradually moved towards skilled production. As more 16nm process products are upgraded to 5nm and 7nm production, quotations will be able to remain high.The industry believes that TSMC will still have the support of long-term contracts and customer prepayments when the economy reverses in the future. It is estimated that more than 80% of TSMC's revenue has been covered by customer prepayments, and the rest can also be flexibly coordinated to support peripheral applications required by advanced process customers.In addition, legal persons also estimated that if the total amount of TSMC's customers' cumulative prepayments this year is estimated to be more than 150 billion yuan, which is converted into monthly turnover, it can be determined that TSMC will have to complete 13 months of output in 2022, and it seems that there will be considerable prepayments received in 2023.TSMC emphasized at its earnings conference in April this year that a mid- to long-term gross profit margin of more than 53% is an achievable goal. The outside world believes that TSMC's gradual reflection of the cost of factory expansion and construction and the price difference of increased production costs passed on to customers will help maintain a stable gross profit margin in 2023.
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TSMC's price hike puts chip companies in a dilemma
Recommended ReadingLatest update time:2024-11-15 02:19
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