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    Brett Simpson • Arete Research

    Brett Simpson's questions to Taiwan Semiconductor Manufacturing Co Ltd (TSM) leadership

    Brett Simpson's questions to Taiwan Semiconductor Manufacturing Co Ltd (TSM) leadership • Q2 2025

    Question

    Brett Simpson asked how TSMC can adjust wafer pricing to neutralize structural cost increases from FX and overseas fabs, and requested quantification of the economic benefits from using AI in its own operations. He also questioned if the current large-scale fab expansion is sufficient for next year's demand.

    Answer

    SVP & CFO Mr. Wendell Huang emphasized that TSMC uses six factors, not just pricing, to manage profitability and achieve its 53%+ gross margin target. He quantified internal AI benefits by stating a 1% productivity gain equals about US$1 billion. Chairman & CEO Dr. C.C. Wei added that due to immense AI demand, TSMC is working diligently to 'narrow the gap' between supply and demand for its advanced nodes.

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    Brett Simpson's questions to Taiwan Semiconductor Manufacturing Co Ltd (TSM) leadership • Q1 2025

    Question

    Brett Simpson questioned how TSMC's AI revenue could still double in 2025 despite the U.S. ban on AI chip sales to China, and asked if the strong Q2 guidance reflects customer pull-ins ahead of potential tariffs. He also asked why management favors dividends over share buybacks for shareholder returns.

    Answer

    CEO C. C. Wei explained that very strong AI demand from the U.S. and other regions outside of China is sufficient to support the forecast for AI revenue to double. CFO Wendell Huang reiterated that Q2 growth is driven by HPC demand, not tariff pull-ins. On shareholder returns, Huang stated that the company's policy remains focused on a sustainable and steadily increasing dividend, which they believe is the best method.

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    Brett Simpson's questions to Taiwan Semiconductor Manufacturing Co Ltd (TSM) leadership • Q3 2024

    Question

    Brett Simpson asked how TSMC validates long-term AI demand beyond 2025 for its capacity planning and what customer commitments help de-risk these large investments. He also questioned how TSMC is addressing Taiwan's energy challenges for its N2 fab build-out and its stance on using nuclear power.

    Answer

    CEO Dr. C. C. Wei explained that TSMC works closely with a broad base of AI innovators and hyperscalers to understand long-term demand and uses a disciplined system for capacity planning. Regarding energy, he stated that TSMC has received assurances from the government for sufficient support (electricity, water, land) for its growth plans, without specifying the energy source.

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    Brett Simpson's questions to Taiwan Semiconductor Manufacturing Co Ltd (TSM) leadership • Q2 2024

    Question

    Brett Simpson of Arete Research asked about TSMC's capacity plans for N2 and A16 to support the aggressive migration of AI chipmakers, particularly due to backside power demand. He also inquired about the current gross margin dilution from N3 and whether the N3E variant structurally improves the node's profitability.

    Answer

    CEO C.C. Wei confirmed that AI customers are moving quickly to advanced nodes like N2 and A16 for power efficiency and that capacity is currently 'very tight.' He stated TSMC is working hard to build sufficient capacity over the next 1-2 years. CFO Wendell Huang explained that for the N3 family, it will take longer than prior nodes to reach the corporate average margin, estimating 10-12 quarters, but confirmed profitability is improving.

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