Recently, TSMC disclosed that the company’s first-quarter consolidated revenue was $17.57 billion, net profit was $7 billion, and diluted earnings per share was $7.82. Compared with the same period last year, revenue in the first quarter increased by 35.5%, while net profit and diluted EPS both increased by 45.1%, continuing to maintain a high operating level, with ROE as high as 36.2%.
Figure 1: TSMC’s 2022Q1 first quarter operations (unit: billions)
▲ Data source: TSMC 2022Q1 financial report
TSMC’s 2022Q1 smartphone and high-performance computing segments accounted for 40% and 41% of net revenue, respectively, while IoT, automotive, DCE, and others accounted for 8%, 5%, 3%, and 3%, respectively. Comparing the revenue breakdown of 2021Q4 and 2022Q1,Company’s main revenue benefits from continued chip shortages, strong growth in automotive and high-performance computing chipsrevenue from smartphones, high-performance computing (HPC), IoT, automotive, DCE and others increased 1%, 26%, 5%, 26%, 8% and 9% from the fourth quarter, respectively.
Figure 2: 2021Q4-2022Q1 business revenue and growth rate (unit: 100 million yuan)
▲ Data source: TSMC 2022Q1 financial report
Wei Zhejia, CEO of TSMC, said that the company will continue to observe the high inventory level of customers, and the production capacity will be tight throughout the year.Demand is softening in some segments such as PCs, tablets and smartphonesbut there are some areas where demand is gradually strengthening.
IDC data shows that,2021Q4 global smartphone shipments reached 362 million units, down 3.2% year-on-year, only Xiaomi and Samsung achieved positive growth in mainstream manufacturers, while Apple and OV both declined to varying degrees.Entering 2022, the stall is even more obvious. Guo Mingchi, a well-known mobile phone industry analyst, recently said that domestic majorandroidMobile phone manufacturers have already cut orders by about 20%, a decrease of 170 million units from the expected shipment in 2022. Taking the domestic market as an example, according to data from the Academy of Information and Communications Technology, in the first two months of 2022, domestic mobile phone shipments totaled 47.886 million units, a year-on-year decrease of 22.6%. Among them, in February 2022, OPPO’s domestic mobile phone shipments were 4 million units, down 45.7% year-on-year; Xiaomi’s shipments were 3.6 million units, down 20.1% year-on-year; Apple performed slightly better, with 3.8 million shipments Department, down 4% year-on-year. The order-cutting behavior of terminal manufacturers has also had a certain impact on TSMC, which is deeply engaged in high-end process chips for smartphones, so the company is also adjusting its product structure in a timely manner.
Figure 3: Shipments of major mobile phone manufacturers in China in February 2022
▲ Data source: China Academy of Information and Communications Technology
Regarding the downturn in smartphone sales, industry insiders believe that, in addition to being affected by the overall economic situation, there are also reasons for the lack of current smartphone innovation and the prolonged replacement cycle for consumers. At present, the overall mobile phone market is in a micro-innovation environment, and most mobile phone manufacturers are entering the high-end market, and the average replacement cycle of users is prolonged. The hot 5G replacement wave in the past two years is far from matching the transmission rate of 5G in terms of the current level of software development.
However, in the face of weak demand in the mobile phone market, it did not prevent TSMC from giving strong revenue guidance for the second quarter. TSMC expects revenue of $17.6-18.2 billion in the second quarter, gross profit margin of 56%-58%; net profit of 45%-47%; capital expenditures in 2022 will remain unchanged at $40-44 billion, and the company’s long-term gross profit margin guidance is 53% and above. The company’s management said that in 2022 and the next few years, HPC will be the company’s strongest growth driver. Facing the huge market demand for high-performance and energy-efficient computing, the growth rate of HPC, automotive and IoT fields will exceed the overall growth level of the company, which is exactly where TSMC has an advantage.
HPC is a high-standard computing performance that can process a large amount of data at high speed. It is an operation that cannot be processed by ordinary personal computers, especially high bandwidth, high performance and low power consumption. Therefore, in addition to the continuous shrinking of the wafer process, it also needs advanced Packaging to handle more immediate operations and reduce power consumption. In the past, HPC was mainly used in scientific research institutes, focusing on computing-intensive scenarios such as petroleum, meteorology, materials, physics and earth science computing, which also made HPC very “cold” in a sense, but after the epidemic , Computation-based pharmaceuticals and vaccines, on the basis of high-performance computing, rapidly shorten the decades required for previous calculations, simulations and clinical experiments. HPC is closely connected to people’s lives and is becoming more and more ubiquitous. change.
According to a report by research firm Hyperion Research, by 2022, the market value of HPC servers is expected to reach $19.6 billion, and the market value of the entire HPC ecosystem will exceed $38 billion.
Figure 4: 2021-2022HPC server market value market forecast
▲ Data source: Hyperion Research
The development of high-performance computing is very fast, and the commercialization trend of supercomputing is becoming more and more obvious. At the same time, supercomputing products for small and medium-sized users other than scientific research projects are also showing an upward trend. the times. Many world-class chip design manufacturers have also increased their investment and commercialization in the HPC field. NVIDIA focuses on high-efficiency computing (HPC) chips for data centers, and its order volume at TSMC in 2022 will increase by about three times. NVIDIA internally predicts that the performance of data center HPC chips will have a high annual growth target of about 200~250%. If the progress is smooth, new products using 5nm enhanced versions are expected to come out around the beginning of the third quarter of 2022 at the earliest; Intel Through the XPU strategy, hardware products with different architectures have been launched, from the original general-purpose CPU to special-purpose GPU, to ASIC, to FPGA. The product portfolio supports the computing power requirements of AI and HPC. Intel also announced its new Xe-HPC GPU, Ponte Vecchio, for HPC and AI workloads in August. Intel’s most complex SoC to date, it contains up to 100 billion transistors, delivering leading floating-point and compute density to accelerate AI, HPC and advanced analytics workloads.
At the same time, another incremental demand for the high revenue guidance in the second quarter came from the automotive sector. In terms of industrial scale, the global automotive semiconductor market’s sales volume in 2019 reached US$41.013 billion, and it is expected to reach US$65.1 billion in 2022, accounting for 12% of the global semiconductor market, and becoming the fastest growing semiconductor segment. quick part. From the perspective of product structure, the automotive power semiconductor and computing and control chip markets are the largest, with a combined scale of US$22.9 billion, accounting for more than 55% of the entire automotive semiconductor market. The third largest demand scale is automotive sensors, with a scale of 7.67 billion US dollars. The market share of communication and memory is relatively small, but with the future development trend of automobile safety, interconnection, intelligence, and energy saving, as well as the emerging new products and functions such as driverless, ADAS, and Internet of Vehicles (V2X), the penetration is gradually increasing. The demand for communication chips and automotive memory will usher in rapid growth. TSMC’s automotive customers have gradually increased in recent years. It will launch a 5nm automotive electronic process platform this year, and its automotive process products will comply with all automotive safety regulations. TSMC may have received orders for NVIDIA and Intel Mobileye autonomous driving chips, and long-term orders signed by customers are also supporting the continued expansion of TSMC’s production capacity. It is reported that the expansion of TSMC’s Nanjing plant and the new plant in Japan are all to increase the production capacity of automotive chips. In addition, due to the relatively stable yield rate of its 5nm and more advanced processes, although Tesla temporarily transferred to Samsung, Tesla is expected to return to TSMC again. (
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