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    Zheng Lu • Goldman Sachs

    Zheng Lu's questions to 3711.TW leadership

    Zheng Lu's questions to 3711.TW leadership • Q1 2025

    Question

    Zheng Lu (Bruce Lu) asked if geopolitical considerations are part of the economic evaluation for U.S. investments. He also sought details on AI testing market share across different products (GPU vs. ASIC) and the impact of potential CoWoS demand fluctuations from partners on the company's capacity plans.

    Answer

    Joseph Tung, CFO, clarified that potential U.S. investments are driven by customer requests and economic feasibility, not geopolitics. On AI testing, he highlighted the company's dominant position in wafer sort and its aggressive move into final test, expecting results in H2 2025, but did not provide a specific market share breakdown. Mr. Tung added that they have not seen unusual changes in CoWoS demand and are proceeding with capacity expansion plans based on strong long-term AI growth prospects.

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    Zheng Lu's questions to ASE Technology Holding Co Ltd (ASX) leadership

    Zheng Lu's questions to ASE Technology Holding Co Ltd (ASX) leadership • Q1 2025

    Question

    Zheng Lu (Bruce Lu) asked if geopolitical factors are considered in the economic evaluation of U.S. investments. He also requested a market share breakdown for AI testing across different products (GPU vs. ASIC) and test types, and questioned if potential fluctuations in CoWoS demand from partners would alter the company's own capacity expansion plans.

    Answer

    Joseph Tung, CFO, clarified that U.S. investment decisions are driven by customer requests and economic feasibility, not directly by geopolitical factors. He declined to provide a specific market share breakdown for AI testing but reiterated their dominance in wafer sort and their aggressive push into final test. Regarding CoWoS demand, Tung affirmed that they have not seen any out-of-the-ordinary changes and are proceeding with their capacity expansion plans, maintaining a strong belief in the long-term growth prospects for AI-related technologies.

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    Zheng Lu's questions to ASE Technology Holding Co Ltd (ASX) leadership • Q2 2024

    Question

    Zheng Lu of Goldman Sachs posed several questions regarding advanced packaging, including its CapEx-to-revenue ratio, profitability compared to foundries, and the strategy for investing in complex technologies like panel-level packaging. He also asked about the lighter-than-historical EMS seasonality and the reasons for the moderated second-half ATM gross margin outlook.

    Answer

    COO Tien Wu explained that direct margin comparisons to TSMC are inappropriate but confirmed ASE's advanced packaging margin is above its corporate ATM average. He detailed ASE's long-term investment in a 600x600mm panel solution, expected to be ready by Q2 2025, as part of a broad, flexible technology portfolio. CFO Joseph Tung added that the muted ATM margin and EMS seasonality are due to a slower-than-expected recovery in the general market, which is offsetting the strength in leading-edge segments.

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    Zheng Lu's questions to Taiwan Semiconductor Manufacturing Co Ltd (TSM) leadership

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

    Question

    Zheng Lu asked about the impact of geopolitical risks, such as the H20 chip ban, on TSMC's production planning and advanced node utilization. He also questioned the strategy of expanding mature node capacity in Japan and Europe amid industry oversupply, suggesting equipment relocation as an alternative.

    Answer

    CEO C. C. Wei stated that potential impacts from geopolitical events and tariffs were already factored into the company's full-year guidance, and no changes in customer behavior have been observed. Regarding overseas mature node expansion, Wei confirmed plans in Japan and Germany will proceed without delays, as they target specialty technologies where TSMC has a unique capability and strong demand.

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

    Question

    Zheng Lu asked for an update to the long-term revenue CAGR guidance of 15-20% given the strong AI demand. He also inquired about the capacity plans for the 2-nanometer node compared to previous nodes, especially considering the rise of chiplet designs, and the migration outlook to A16.

    Answer

    CEO Dr. C. C. Wei stated that while the next five years look "very healthy," he was not providing an updated long-term CAGR number at this time. He clarified that chiplet designs do not reduce leading-edge demand; in fact, he sees more customer interest and demand for N2 compared to N3 at a similar stage. He added that demand for A16 is also very high, and TSMC is preparing significant capacity for both nodes.

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

    Question

    Bruce Lu from Goldman Sachs questioned why TSMC has not raised its long-term gross margin target above 53% given its strong value proposition. He also asked about the current profitability of advanced packaging and whether TSMC plans to work with more OSAT partners to increase CoWoS supply.

    Answer

    CEO C.C. Wei acknowledged TSMC's value but stated the company is not changing the '53% and higher' target at this time, emphasizing the 'and higher' part. He confirmed that advanced packaging gross margin is now approaching the corporate average due to scale and cost reduction efforts. Wei also affirmed that TSMC is actively working with OSAT partners to expand CoWoS capacity to meet immense customer demand.

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    Zheng Lu's questions to United Microelectronics Corp (UMC) leadership

    Zheng Lu's questions to United Microelectronics Corp (UMC) leadership • Q1 2024

    Question

    Zheng Lu of Goldman Sachs questioned the outlook for an industry recovery, asking when inventory restocking might begin given UMC's muted guidance. He also asked about UMC's value proposition and profitability in 3D-IC packaging, given its lack of leading-edge 3nm or 5nm nodes.

    Answer

    President Jason Wang explained that while inventory levels are improving in most segments, customers remain conservative, leading to more rush orders. He noted that the auto and industrial segments are recovering more slowly but should be healthier by year-end, suggesting Q1 could be the cyclical bottom. For 3D-IC, Mr. Wang stated UMC targets a market segment focused on form factor and power efficiency that doesn't require the most advanced nodes. He affirmed the business would be profitable and managed to maintain the company's overall structural profitability.

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