Key investment points:
The revenue and gross profit margin exceeded the guideline expectations again, and the foundry capacity of wafers was tight in 22 years. TSMC 22q1 revenue reached US $17.57 billion, an increase of 11.6% month on month and 36.0% year-on-year, exceeding the previous guidelines (US $16.6-17.2 billion). The gross profit margin was 55.6%, an increase of 2.9 percentage points month on month, compared with the previous guidance of 53.0% – 55.0%. In the first quarter, the shipment volume of wafers (equivalent to 12 inches) was 3.778 million, with a month on month increase of 1.4%, and the revenue achieved a month on month increase of 11.6%, indicating that the ASP of wafers was further improved. From the perspective of the proportion of the revenue of each process node, nodes of 7Nm and below account for 50%. The company’s production capacity continues to be in short supply, which is expected to be tight in the whole year of 22 years. The continued prosperity of wafer foundry is also reflected in the company’s optimistic expectation for the second quarter. The revenue is expected to be between 17.6-18.2 billion US dollars, and the gross profit margin is expected to further increase to 56% – 58%.
HPC and automotive applications maintained strong growth, and capital expenditure remained unchanged, reflecting confidence in medium – and long-term semiconductor demand. From the perspective of downstream applications, HPC (High Performance Computing) and automotive applications maintained strong growth, with an average month on month growth of 26%, becoming the main driving force for the company’s revenue growth. Mobile applications increased by 1% month on month, Internet of things applications increased by 5% month on month, and DCE (data communication equipment) applications increased by 8% month on month. The company expects HPC to become the platform with the strongest growth in 22 years. This also reflects the high prosperity of server and automotive applications in the segment market. In the era of big data, applications such as face recognition, intelligent recommendation and automatic driving require a lot of server and edge computing power. According to IDC data, the AI server market will continue to grow rapidly in 21-25 years. It is expected that the global AI server market will reach US $27.7 billion in 2025, with a five-year compound growth rate of 20.3%. Adas and automatic driving have also greatly increased the semiconductor value of single cars. According to the data of strategy analytics, L2 level assisted driving will increase the semiconductor value of single cars by an additional $160180, while L4-L5 level will increase to $11501250. Driven by the continuous trend of AI application and automotive intelligence, the demand for semiconductors is expected to maintain rapid growth in the medium and long term. Considering the long-term needs of semiconductor customers, the company maintained the capital expenditure of US $40-44 billion this year.
It is suggested to pay attention to: semiconductor equipment: Naura Technology Group Co.Ltd(002371) , Advanced Micro-Fabrication Equipment Inc.China(688012) , Kingsemi Co.Ltd(688037) , Hangzhou Chang Chuan Technology Co.Ltd(300604) , Beijing Huafeng Test & Control Technology Co.Ltd(688200) etc; Design Category: Will Semiconductor Co.Ltd.Shanghai(603501) , Gigadevice Semiconductor (Beijing) Inc(603986) , Sino Wealth Electronic Ltd(300327) , Ninestar Corporation(002180) , Amlogic (Shanghai) Co.Ltd(688099) , Rockchip Electronics Co.Ltd(603893) , Allwinnertech Technology Co.Ltd(300458) , etc; Semiconductor materials: National Silicon Industry Group Co.Ltd(688126) , Hangzhou Lion Electronics Co.Ltd(605358) , Hubei Dinglong Co.Ltd(300054) etc.
Risk warning: the downstream demand is less than expected, the R & D progress is less than expected, and the Sino US trade friction affects the supply chain risk
