Event:
On April 14, 2022, TSMC (2330. TW) released the report for the first quarter of 2022: in 2022q1, the operating revenue reached US $17.57 billion, with a year-on-year increase of 36.0% and a month on month increase of 11.6%; The gross profit margin was 55.6%, with a year-on-year increase of 3.2pct and a month on month increase of 2.9pct; The net interest rate was 41.3%, with a year-on-year increase of 2.7pct and a month on month increase of 3.4pct.
Comments:
TSMC’s 2022q1 revenue and gross profit margin exceeded the upper limit of the guidelines, and both high-performance computing and automotive electronics increased by 26% month on month. TSMC’s operating revenue in 2022q1 was US $17.57 billion, with a guideline of US $16.6-17.2 billion, a gross profit margin of 55.6% and a guideline of 53-55%. Both revenue and gross profit margin exceeded the upper limit of the guideline, mainly because the demand for smart phones and automotive electronics was better than previously expected. Capital expenditure in 2022q1 was US $9.38 billion, an increase of 10.87% compared with us $8.46 billion in 2021q4.
In terms of the proportion of process revenue, 7Nm and 5nm accounted for 30% and 20% respectively, accounting for 50% in total, 28nm and 16nm accounted for 11% and 14% respectively, and 28nm and below accounted for 75% in total. On the whole, advanced manufacturing process is the main source of income of the company, and the head effect is obvious.
In terms of the proportion of downstream applications, the revenue of smart phones and high-performance computing accounted for 40% and 41% respectively, accounting for 81% in total. The revenue of Internet of things, automobile, DCE and other businesses accounted for 8%, 5%, 3% and 3% respectively. Smart phones and high-performance computing are the main sources of the company’s revenue. In addition, the ranking of revenue month on month growth is as follows: High Performance Computing (+ 26%), automotive electronics (+ 26%), others (+ 9%), DCE (+ 8%), Internet of things (+ 5%) and smartphone (+ 1%), both high performance computing and automotive electronics have achieved rapid growth.
In terms of the proportion of countries and regions: North America accounts for 64% of the company’s revenue, which is the main source of the company’s revenue. The revenue of Asia Pacific, China, EMEA (Europe, Middle East and Africa) and Japan account for 15%, 11%, 5% and 5% respectively, and China occupies an important position.
In 2022q2, the company’s revenue guidance increased by 0.17-3.59% month on month. It is expected that the industrial sales will maintain an increase of about 20% in 2022. 22q2 company’s revenue guidance is expected to be between USD 17.6-18.2 billion, with a month on month increase of 0.17-3.59%, a median of 17.9 billion, a month on month increase of 2% and a year-on-year increase of 35%; The gross profit margin is between 56-58%, with a median of 57%, with a month on month increase of 1.4pct; The overall business will continue to benefit from the growth of demand related to high-performance computing and automotive electronics. The company expects that the industrial sales will maintain a growth of about 20% in 2022, and its capital expenditure will be between us $40-44 billion. It is expected that the demand for high-performance computing will be the first driving force to maintain the strong growth of the company in 2022. The company’s long-term goal is to achieve a gross profit margin of 53% or more and a roe of more than 25%.
N3 is expected to achieve mass production in 2022h2, n3e is expected to produce in 2023h2, and N2 is expected to be put into production in 2025. The company’s N3 technology node adopts FinFET transistor structure. It is expected to achieve mass production in the second half of 2022 and contribute revenue in 2023. Its growth will be driven by the demand for smart phones and high-performance computing. N3e technology node is expected to be mass produced one year after N3 technology node, and N3 series will become another large and long-term technology node similar to N7 and N5; N2 technology node is expected to be in risk trial production in 2024 and mass production in 2025, which will continue to maintain the company’s leading position in technology.
Investment suggestions:
1. Wafer Foundry: in 2022, the capital development support of China’s leading wafer factories continued to rise. From 2021 to 2022: TSMC (US $30 / 42 billion, year-on-year + 40%, the same below), SMIC (45 / 50, + 11.11%), XMC / ytmc (33 / 34, + 3.03%), Huahong group (20 / 25, + 25%), UMC (18 / 30, + 66.67%), five companies in total (416 / 559, + 34.38%). It is suggested to pay attention to: Semiconductor Manufacturing International Corporation(688981) (A / h) and Huahong semiconductor (h).
2. Semiconductor equipment: semiconductor equipment: about 70-80% of the capital expenditure on wafer factory expansion will be used to buy semiconductor equipment. We continue to be optimistic about the logic of domestic substitution of semiconductor equipment. It’s a long-term, high-quality track for the future. It’s recommended to focus on listed companies, including Hongda Xingye Co.Ltd(002002) 371 \ (kestone), Gl Tech Co.Ltd(300480) , Suzhou Hyc Technology Co.Ltd(688001) Wuhan Jingce Electronic Group Co.Ltd(300567) Zhejiang Jingsheng Mechanical & Electrical Co.Ltd(300316) Shanghai Sheng Jian Environment Technology Co.Ltd(603324) Shanghai Gentech Co.Ltd(688596) 、ASMPacific（H）； Non listed companies include Yitang semiconductor, Huahai Qingke, Shenyang tuojing, Shanghai microelectronics, Ruili scientific instruments and Dongfang Jingyuan.
3. Semiconductor materials: semiconductor materials: semiconductor materials are closely related to semiconductor devices and wafer factories. Semiconductor materials are closely related to semiconductor devices and devices that are closely related to semiconductor devices and fabfabfabfabmaterials, and it is expected to enter a period of volume after 2021. It is expected to enter a period of volume after 2021. It is expected to be expected after 2021, and it is expected to enter a period of volume after 2021. It is expected to be expected to enter a period of volume. It is suggested to focus attention on listed companies, including 6882828233\ \, Shanghai Sinyang Semiconductor Materials Co.Ltd(300236) , Jiangyin Jianghua Microelectronics Materials Co.Ltd(603078) , Jiangsu Nata Opto-Electronic Material Co.Ltd(300346) , Guangdong Huate Gas Co.Ltd(688268) , Suzhou Jinhong Gas Co.Ltd(688106) .
4. Semiconductor design: (1) ddr5 industrial chain: ddr5 penetration rate continues, and industrial chain companies grow year-on-year and month on month. It is recommended to pay attention to Montage Technology Co.Ltd(688008) , Giantec Semiconductor Corporation(688123) ; (2) Simulation: there is a huge space for domestic substitution, and some enterprises have strong access to global major customers. It is recommended to pay attention to Sg Micro Corp(300661) , Wuxi Etek Microelectronics Co.Ltd(688601) ; (3) Special IC: the industry continues to be booming, so it is recommended to pay attention to Unigroup Guoxin Microelectronics Co.Ltd(002049) ; (4) CIS: the mobile phone business has been improved, and there is a huge space for automotive CIS. Tddi and DDIC can expect high growth in 2022. At present, the market value is underestimated. It is recommended to pay attention to Will Semiconductor Co.Ltd.Shanghai(603501) ; (5) Logic: it is suggested to focus on Amlogic (Shanghai) Co.Ltd(688099) , Gigadevice Semiconductor (Beijing) Inc(603986) , Sino Wealth Electronic Ltd(300327) , etc.
Risk tip: technology R & D is not as expected, downstream application and expansion are not as expected, and there is a risk of wafer overcapacity.
