XMind

TSM 09Q4 investor conference

1. Financial key parameters

   1. Sales: 92.09bn. QoQ +2.4%

   2. GM: 48.5% (+0.8 bp)

      1. fully load on 2010

      2. keep GM structure

      3. 10% increasing on Depreciation this year

      4. maximum 50% less

      5. improvement factor

         1. maintain high Utilization

         2. cost structure optimization

   3. OPM: 36.5% (+0.9bp)

      1. OP expense +0.18bn. due the 22/28nm R&D activities

      2. maximum 36~37%

         1. due the competition and depreciation

      3. 分支主題 1

   4. EPS:1.26 (Q3 1.18, QoQ 7.2%, 09Y 3.44 )

      1. P/O 97%

      2. 2010 DVD NT$3 planed

         1. Yield 5% today

   5. ROE 27.3% flat

   6. FCF 19.29bn. (Q3 16.42, QoQ 31.9%)

   7. Non-OP item

      1. 0.9bn. income due the compensation litigation

   8. Q4 CAPEX 42.7bn.

      1. Q4 1.3bn. USD

      2. 09Y 2.67bn. YoY 42%

2. Sales status

   1. Wafer shipment 2.43kk, (Q3 2.445kk, QoQ -0.6% YoY +58.6%)

   2. By application

      1. Computer 33% ( +22% QoQ)

      2. Communication 39% ( -8% QoQ)

      3. Consumer 13% ( -15% QoQ)

      4. Industrial/others 15% (156% QoQ)

         1. What news in this sector ?

         2. There was no one to ask why the industrial contribution beyond consumer !

            1. 分支主題 1

      5. Application share to Revenue

   3. By technology

      1. 65,40nm 39%

         1. 40nm 9% QoQ 100%

         2. 65nm 30%

      2. beyond 0.13um 70% ( Q3 67%)

         1. 0.13um 16%

         2. 90nm 15%

      3. Node share to GM

   4. Capacity update

      1. 09Q4 capacity 2.532MW/Q-8", QoQ 3.6%

      2. 10Q1 capacity 2.557MW/Q-8" QoQ 1%

         1. 12" QoQ +8%

      3. 09Y 9.958MW/Q-8" YoY 6%

         1. 12" YoY +11%

            1. 12" had 42% share

   5. 2330 TSM 營收分析.xls

3. Business outlook

   1. 10Q1 Guidence

      1. USDTWD= 31.6

      2. Revenue 89.0~ 91.0bn.

      3. GM 46.5~48.5%

      4. OP M. 35~37%

      5. 2010 CAPEX plan 4.8bn. USD

   2. 2010 market Forecast

      1. End market

         1. PC +14%

         2. Consumer +7%

         3. Handsets +12%

      2. WW semi. market

         1. 10Y +18%

            1. Drive by Memory , 30%+ growth

         2. 09Y +9% growth

         3. 10Q1 decline single digital seasonally

            1. little better than historical seasonal behavior

         4. 09~10Y combine growth +9%

   3. Foundry market

      1. 09Y -70% decline

      2. 29% growth in 10Y

         1. TSM growth will little bit lead to foundry market

         2. The limited factor is capacity shortage

      3. 09~10Y combine growth 12%

   4. Inventory of major customer

      1. flat as Q3 level but still lower than historically

      2. First three quarters kept decline

   5. Technology and manufacturing

      1. 28nm

         1. 2 dozen+ customer (computing, wireless comm. networking)

         2. product tape out on mid of 2010

            1. Production on 2011

      2. 4xnm

         1. Yield still improving

         2. But 4xnm GM was still below corporate GM in '09

            1. Goal:4Xnm GM will above Corp. GM in the end of 2010

      3. 65nm & above

         1. utilization 100% across the board

         2. even 0.5um in 6" was fully load

         3. capacity shortage especially in adv. node

   6. CAPEX

      1. 4.8bn. 2010

         1. adv.node 94%

            1. affective supplier / capacity

               1. mainly invest 28,40,45 nm in next 2 years

               2. availability of technology

               3. Not only the yield

            2. No risk about capacity exceed demand

               1. adv. node still on supply shortening situation

               2. Competitor won't invest adv. node sharply according major customers information

            3. TSM book the equipment slot in advance

            4. 40nm market share about 90% excepted CPU

         2. New business 2%

         3. mainstream 3%

            1. address capacity over demand will lead ASP erosion

            2. Prefer supplier

               1. CAPEX major only on line balancing

               2. delivery reliability

               3. Become good partner

               4. Capacity flexibility

                  1. fulfill customer suddenly demand

               5. special technology

            3. Still had battle on those node

               1. maintain high utilization to competitor

         4. 13% overall capacity growth

            1. 40% utilization-break even point

            2. 42% adv. node capacity growth

4. Q&A

   1. ASP trend

      1. Adv. node ASP always decline

         1. To manage the cost structure trend down lead the ASP slip

         2. Won't raise ASP on adv. node especially on capacity shortage

         3. But it's different scenario on over supply and over demand

         4. ASP engaged by annual contract, it will not be raised by capacity shortage between duration

   2. About INTC

      1. INTC is still our partner

   3. 1Q market

      1. followed seasonal pattern

      2. computer sector decline excepted LCD driver

      3. Consumer will goes up slightly

      4. Communication and networking will decline slightly