Taiwan Semiconductor Manufacturing Company - Earnings Call - Q2 2011

Transcript

Speaker 0

Welcome to TSMC's second quarter 2011 results webcast conference call. This conference call is being webcast live via the TSMC website at www.tsmc.com and only in audio mode. Your dial-in lines are also in listen-only mode. I would now like to turn the conference over to Dr. Elizabeth Sun, TSMC's Head of Investor Relations.

Speaker 2

Thank you. Good morning and good evening, everyone. Welcome to TSMC's second quarter 2011 conference call. Joining us on the call are Dr. Morris Chang, our Chairman and Chief Executive Officer, and Ms. Lora Ho, our Senior Vice President and Chief Financial Officer. The format for today's conference call will be as follows. First, Lora will summarize our operations in the second quarter and give you our guidance for the third quarter. Afterwards, TSMC's Chairman, Dr. Chang, will provide his general remark on the business outlook and a couple of key messages. We will open the floor to questions. For those participants who do not yet have a copy of the press release, you may download it from TSMC's website at www.tsmc.com. Please also download the summary slides in relation to today's quarterly review presentation.

I would like to remind all listeners that following discussions may contain forward-looking statements that are subject to significant risks and uncertainties, which could cause actual results to differ materially from those contained in the forward-looking statements. Information as to those factors that could cause actual results to differ materially from TSMC's forward-looking statements may be found in TSMC's annual report on Form 20-F filed with the United States Securities and Exchange Commission on April 15, 2011, and such other documents as TSMC may file with or submit to the SEC from time to time. Except as required by law, we undertake no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise. I would like to turn the call over to Lora.

Speaker 0

Thank you, Elizabeth. Good morning and good evening to everyone. Welcome to our second quarter earnings conference call. During today's call, I will start with the financial highlights in the second quarter. Then we will move on to the outlook for the third quarter. You may also refer to the quarterly financial summary slides on our website. All dollar figures are in NT dollars unless otherwise stated. Looking at the highlights, our second quarter revenue has increased by 4.9% sequentially. Our gross margin was 46%, and operating margin was 34.3%. The sequential decline in margin was mainly due to lower utilization and NT dollar appreciation. Second quarter wafer shipments were 3.3 million 8-inch equivalent wafers, up 4% from the prior quarter. Let me move to the income statement. Our operating expense increased by 3.9% from the previous quarter, mainly due to higher R&D spending on 20-nanometer.

The percentage of sales is 11.7%, similar to the level in the first quarter. Overall, our second quarter net margin arrived at 32.5%, down 1.9 percentage points from the first quarter, and EPS was $80.39. Now, let's take a look at our revenue by application. In the second quarter, communication-related revenue decreased by 2% from the first quarter, while computer, consumer, and industrial increased by 15%, 10%, and 6% respectively. Revenue from communication-related applications represents 45% of our total wafer revenue in this quarter, while computer, consumer, and industrial applications account for 25%, 11%, and 19% of our wafer sales respectively. Now, let's turn to revenue by technology. We continue to see strong demand for advanced technologies. 40-nanometer remained the strongest node, and its contribution to our total wafer sales increased by 4 percentage points to 26% in the second quarter.

Overall, combined contribution from 40-nanometer and 65-nanometer had increased by 1 percentage point to 55% of total wafer sales in the second quarter. On the balance sheet, we ended the second quarter with NT $159 billion in cash and short-term investment, similar to the level in the prior quarter. As for liabilities, almost all the increase was for dividend payable, and dividends had been paid out on July 20th. Our inventory turnover days decreased by three days in the second quarter, and we are expecting a larger scale of decline in the third quarter to be below 50 days. Let's proceed with cash flow. Cash flows generated from operating activities totaled $63 billion, up $7 billion from the prior quarter, mainly due to change in working capital. Capital expenditure was $65 billion in the second quarter.

As a result, our free cash flow was a net outflow of $2 billion during the quarter, up from an outflow of $25 billion in the prior quarter, thanks to less capital expenditure. Next, on capital expenditure, we decided to revise down 2011 full-year capital expenditure to $7.4 billion from the original plan of $7.8 billion, as the weakened economic conditions have impacted demand for our wafers in the second half of the year. Our second quarter capital expenditure totaled $2.3 billion, bringing first half's capital expenditure to two-thirds of our overall year's budget. As a result of capital expenditure adjustment, our total capacity in 2011 will be 2% lower than the previous plan. Under the current capacity plan, overall capacity is expected to increase 17% to 13.2 million 8-inch equivalent wafers in 2011. 12-inch wafer capacity will increase by 30%.

Total installed capacity was about 3.3 million wafers in the second quarter, representing an 8% growth from the prior quarter, and we expect to grow by another 3% in the third quarter and keep flat in the fourth quarter. Now, let's turn to the outlook for the third quarter. Based on current business expectation and a forecast exchange rate of 28.72, we expect our consolidated revenue in the third quarter to come in between $102 billion and $104 billion. The third quarter guidance reflects deconsolidation of Global Unit Chips, which contribute around 1% of our consolidated revenue in the previous quarter. However, the change of recognition method will not impact our strategic relationship with Global Unit Chips. In terms of margins, we expect our third quarter gross margin to be between 40.5% and 42.5%, operating margin to be between 28% and 30%. This concludes my remarks today.

Now, I would like to turn the call over to Dr. Morris Chang, our Chairman and CEO, for his remarks.

Speaker 1

Good evening and good morning. I'd like to talk about the world economy and the semiconductor market first, and then I'd like to comment on the supply chain inventory, demand, prices, and foundry market. I'd like to say a few words about the third quarter gross margin. I'd like to report our progress in technology. First, on the world economy and semiconductor market, world economic growth this year is below earlier expectations. U.S. growth is below earlier expectations and is lately troubled by debt limit uncertainties. Europe has been troubled by debt problems of several countries. Japan's slow growth has been exacerbated by the March earthquake tsunami. China is trying to control inflation. We now forecast world GDP growth rate at 2.8%, down from 3.8% at the beginning of the year. The lower revision of world GDP growth has impacted the semiconductor growth.

We now expect semiconductor X memory to grow at 4% this year, down from the 7% we expected earlier this year. I want to make a few comments on supply chain inventory, demand, and foundry market. The semiconductor foundry sector has been further impacted by an inventory adjustment problem. Earlier in the year, semiconductor supply chain anticipated a better second half of 2011 and started building inventory. The March 11 earthquake in Japan further prompted the supply chain to build more inventory for precautionary purposes. Now that Japan's supplier's recovery has been better than expected, but the end demand has softened due to slow economic growth, many IC companies need to reduce their inventory levels. In our current estimate, the supply chain's days of inventory at the end of 2Q is about five days above feasible.

Since all the companies are managing inventory attentively, we believe the inventory adjustment will be mostly done by the end of the third quarter. The demand for TSMC's wafers in 3Q has been negatively impacted by both the softening economy and the supply chain's inventory management. Prices have remained stable, and because of our differentiated technologies and our customer partnerships, we expect that the prices will remain stable in the foreseeable future. We now expect the world foundry sector revenue to grow 7% versus the 15% growth that we expected in January. I'd like to make a few comments on the third quarter gross margin. If we compare 3Q 2011 gross margin guidance's midpoint, which is 41.5%, with a year ago, 3Q 2010, when we had a gross margin of 50%, there is an 8.5 percentage point decline. 360 basis points is attributed to foreign exchange rate change.

The NT dollar has risen 10% from 3Q 2010 to 3Q 2011. 1,150 basis points is attributed to lower utilization. Utilization was significantly above 100% in 3Q 2010 and is now below 100%. That's a total of 1,510 basis points. Cost reduction offsets approximately 660 basis points, making the difference now about 850 basis points. Beyond 3Q, we expect foreign exchange to be stable. We expect that inventory correction will have run its course, by and large, by the end of the third quarter. Our utilization should improve in the fourth quarter. The negative elements will be diminished. Our cost reduction momentum is expected to continue. Therefore, we are optimistic about our margin improvement from the third quarter on. Now, I'd like to report on our technology progress, specifically first on 28-nanometer.

We reported earlier that we had tapeouts for 89 individual products, and the tapeout of each of those is on schedule. The first silicon of every tapeout was fully functional with consistently satisfactory yield. Defect density reduction is on plan. The ramp of 28-nanometer, however, is taking longer than expected due to the softening economy and the demand outlook of 2011. Second item that I want to report on is that our close cooperation with ARM CPU core is allowing us to optimize our technology on ARM designs. Recently, in 28 HP, which stands for 28 High Performance, we have delivered first industry silicon with higher speed than any other competitor using ARM. In 28 HPM, which stands for 28-nanometer High Performance Mobile, we have enabled first tapeout of even better performance. Next item is our transistor at the 14-nanometer node.

We have demonstrated a high mobility P-channel FinFET with greater than 30% mobility gain over silicon channel for low voltage 14-nanometer SoC. Next item is subsystem integration. We have demonstrated a fully functional subsystem, having a logic chip, silicon interposer with built-in passive components, and bumps manufactured at TSMC. The entire component was assembled at TSMC. As we forge ahead with more slow in IC development, we're also trying to realize the potential of subsystem integration. This concept can be described in the following rubric. The silicon interposer solution reduces packages from nine to one, reduces size of power, and increases the memory bandwidth and system speed. The next item that I want to report on is Bump on Trace, BOT. We show the next rubric. This is the first time we have revealed this to the investing public. It is a TSMC invention protected by patents.

We completed the full reliability qualification of BOT process. This BOT process reduces substrate bump pitch from 140 microns to 100 microns with significant cost saving from using standard infrared reflow, eliminating pads and solder masks on substrates, and potentially reducing metal layers on substrates. It also reduces form factor, most suitable for mobile applications. Last but not the least, I want to report that on CMOS image sensors, we are ready to introduce 1.1 micron pixel process early next year for 8 megapixel products. We have also demonstrated a 0.9 micron pixel for 16 megapixel products to be released a year later. Both processes use our world-leading backside illumination technology and are well positioned for smartphone and tablet applications. Thank you. These are my pair comments.

Speaker 2

This concludes our prepared statements. Operator, please open the floor to questions.

Speaker 0

At this time, we will open the floor for questions. If you would like to ask a question, please press star, then one on your touch-tone phone now. Questions will be taken in the order in which they were received. If at any time you would like to remove yourself from the question queue, please press star, then two. Please limit your questions to two at a time, with one follow-up to allow all participants an opportunity to ask the management members questions. Our first question comes from the line of Randy Abrahams from Credit Suisse. Please proceed.

Speaker 3

Yes. Hi. Thank you. You gave good disclosure in the prepared remarks on the gross margin change on a year-over-year basis. I was wondering if you could do the same sequentially, so the different factors in gross margins from second quarter to third quarter, for instance, from utilization or from inventory or FX sequentially.

Speaker 2

Okay. Randy, the second quarter margin was 46%, and the midpoint of our third quarter guidance is 41.5%. There is a 4.5 percentage point difference. The difference comes from three parts. Number one is the utilization decrease in the third quarter. This part accounts for a little bit over 3 percentage points of gross margin. Number two, in the third quarter, we will ship about three days of finished goods inventory, which was filled in the second quarter. These three days of inventory have contributed to the second quarter's productivity and the margin rate. Since these wafers are sold in this quarter, we will need to reverse the variable impact in this quarter. This accounts for about 1 percentage point of margin drop this quarter. Lastly, the foreign exchange rate during the quarter has the NT dollar has appreciated another 1.5%. This contributes to roughly 0.3 percentage point margin decrease.

If you add these three things together, 3 percentage points, a little bit more than 1 percentage point, and another 0.3 percentage points, you get this 4.5 percentage point difference Q over Q. I hope I answered your question.

Speaker 3

Okay. No, that's helpful. The follow-up question, you mentioned some about the 3D packaging and the backend opportunity also at the afternoon conference. Maybe if you could talk about the potential contribution or scope, like how big this backend opportunity could be. Traditionally, the backend margins are more 20% to 25% for the independent backend companies. As you weave that into your business, do you see similar type of profitability for these opportunities?

Speaker 1

This is Morris Chang. Randy, at this point, it's much too early to try to estimate the margin contribution that the subsystem integration will make. You refer to the backend, the assembly and testers' margin being 20-some %. I don't think that's an apt comparison because, in our case, I think that we would consider this an extension of our IC processing technology. It will be an incremental contribution. I think that it's certainly far too early to say quantitatively what the margin contribution will be.

Speaker 3

Okay. If I could follow up, maybe on the 3D packaging, what applications are you seeing the interest now for these applications? Maybe timeline, how quickly you think some of these could start to ramp up?

Speaker 1

Actually, with the exception, I reported on six items of technology progress. The first item is 28-nanometer. I think 28-nanometer will be used for a lot of products, a lot of products other than just mobile products. The other five items, the ARM CPU core, the 14-nanometer transistor, the subsystem integration, the Bump on Trace process, and the CMOS image sensors, are really primarily applicable. I need to except the 14-nanometer transistor because I think that's applicable to a lot of applications. The ARM CPU core, the subsystem integration, the Bump on Trace process, and the CMOS image sensors all share a common theme, which is that they are primarily used on mobile products.

Speaker 3

Okay, thanks a lot.

Speaker 0

Our next question comes from the line of Michael McConnell from Needham & Company. Please proceed.

Speaker 3

Yeah. Looking at the commentary about the inventory correction being short-lived, really Q3 and a recovery in Q4, that's a pretty important statement, I think, from TSMC. Morris, outside of just the inventories being five days above seasonal exiting Q2, what else gives you some confidence to make a statement like that?

Speaker 1

It's our internal forecasting, our internal market forecasting, the data that we gather from our customers, and perhaps just also a feel that we get from talking to customers. I think that we have got it identified right. No forecasting is absolutely guaranteed by any means. I'm reasonably confident that the inventory adjustment will run its course in the, I would say that most it will run most of its course in the third quarter. In the fourth quarter, it will run further. By the end of the year, I think that the inventory adjustment will run its course.

Speaker 3

With that commentary, I guess my next question would be, looking at the slope of your utilization improvements in Q4, should we anticipate a more moderate slope? Obviously, some improvement, but you know how sharp of a recovery should we think about in terms of Q4? Do you think in terms of magnitude, maybe Q2 next year would have more of a sharper increase in improvement with utilizations or even maybe Q1, which I know is not normal?

Speaker 1

In our case, you have to remember, I think that Lora mentioned that we are reducing our own imported inventory too. We were at how many days at the end of?

Speaker 2

56 days in the first quarter and 53 days in the second quarter. In the third quarter, we expect to further reduce to below 50 days.

Speaker 1

Below 50 days. All the inventory, the third quarter, actually, for us, the third quarter utilization is particularly low. I am quite confident of an increase of utilization in the fourth quarter. You ask how sharp will it be? It depends on what you mean by sharp. In my mind, it will be a significant recovery, significant utilization recovery.

Speaker 0

Our next question comes from the line of Edwin Moss from Needham & Company. Please proceed.

Speaker 3

Hi, thanks for taking my question. Regarding your graphics reduction and the lower capacity increase in the back half of this year, you talk about utilization starting to pick up in the fourth quarter. Would that imply that if I look beyond the second half, it would imply that you would start to pick up in capacity expansion again in the first half of next year?

Speaker 1

We have reduced our capital expenditure by about 5% this year. At this moment, we are still planning next year's capital. At this point, I think it's too early. I think you know we have to see. I'm confident that the utilization will pick up and recovery will continue in the next year. I think that by the time we have to make a decision on next year's capital expenditure, we already have data. Data always beats even confident predictions.

Speaker 3

I see. My follow-up question is regarding 28-nanometer. You mentioned that 28-nanometer is taking a little bit longer. Can you describe if that is related to just maturity of the process, or does it relate to just customer not ramping the design that they have and you maybe previously expect them to ramp? Finally, how much of your sales do you expect to come from 28-nanometer for, let's say, the second half or the fourth quarter of this year?

Speaker 1

Lora, you want to answer that?

Speaker 2

Okay. The delay of 28-nanometer is not due to the quality issue. Actually, we have a very good tapeout, and E0 is unplanned. The delay ramping is mainly because of the softening economy for our customers. Customers delay the tapeout to us. Therefore, the 28-nanometer revenue contribution at the end of the fourth quarter of this year will be roughly about 1% to our total wafer revenue.

Speaker 0

Our next question comes from the line of Mehdi Hosseini from Susquehanna Financial Group. Please proceed.

Speaker 3

Yes. Thanks for taking my question. This is a follow-up to the previous question. With the 28-nanometer ramp-up, to what extent the ramp beyond Q4 is going to be driven by attracting new customers? Is that going to be just the volume ramp of these 70, 80 tapeouts that you have?

Speaker 1

No, we are not counting on attracting new customers. Actually, we have almost all of the major customers of the foundry sector anyway. All of them are using or planning to use, I should say, almost all of them are planning to use our 28-nanometer. Our tapeouts, the 89 tapeouts that I have mentioned a couple of times, I think are equal to 10 times the combined tapeouts of all our competitors. No, we're not counting on attracting new customers on the 28-nanometer. I believe that the ramp-up of 28-nanometer is mainly a function of demand. I think it will start in the coming December and January period. It will sharply. There will be an inflection point in the ramp-up curve at the end of the year.

Speaker 3

Got it. Morris, in the past, you have talked about a 20% revenue growth target. Given the reduced expectations for just the overall semi-industry revenue and foundry growth, how should we think about your year-end revenue growth target?

Speaker 1

I'm afraid that I have to now, at this point, since the whole semiconductor market is going to be less, the whole foundry market is going to be less, the 20% growth, which was always in U.S. dollars, is now unachievable. However, I would say that we still expect a very much up year compared to last year.

Speaker 3

Would you at least outgrow the foundry sector growth of 7% by two times or less than that?

Speaker 1

I really cannot answer that question without violating the guidelines of the Taiwan Regulatory Agency. Actually, I may say that even the 20% prediction, I got slapped on the wrist already. I would have loved to quantify for you, but right now, I think I can only say that we will be up. We'll be up this year.

Speaker 3

Got it. Thank you.

Speaker 0

Our next question comes from the line of Sengheng Ming from BNP. Please proceed.

Speaker 3

Hi. Good evening. Two questions from my side. The first one is the company has done a lot of things on cost reduction. Just want to know if there's change in the break-even utilization for the company at the net level and also the EBITDA level.

Speaker 2

The break-even utilization, I can see that today's environment will be at high 40s. This is a little bit from the low 40s. We have been very, very good.

Speaker 0

Our next question comes from the line of Sena Kumar from Credit Suisse. Please proceed.

Speaker 3

Yeah. Hi. Thanks for taking my question, Satya Kumar from Credit Suisse. I was wondering if you could add a little bit of color on capital intensity and what it means for yields. In the past, I think you had talked about equipment cost for 28-nanometer as being significantly more than 65-nanometer. First part of my question is, do you see any changes in that trend as you continue to ramp 28-nanometer and move to 20-nanometer later on? The second part of my question is, given the fact that the equipment cost is higher at the smaller technology node, does that result in a higher yield threshold that is required in order to ramp the volume to keep the economics attractive for you and your customers?

The reason I ask is I know you mentioned that 28-nanometer yields are good from your perspective, but are they good enough to ramp given the higher cost of 28-nanometer outside the economic issues you mentioned?

Speaker 1

I'll give you a straightforward answer first, and perhaps Lora may elaborate on my answer. The straight answer to the capital intensity of the smaller nodes is that, yes, the equipment cost is higher. Therefore, it will take a higher margin to get the same return on assets, return on invested capital. That can, of course, be achieved by slightly higher price and slightly more aggressive cost reduction. We are actually pursuing both avenues.

Speaker 2

Yes. If I can elaborate a little bit more. For every advanced node that we invest for, we have a return model to make a decision on how we should invest. As Chairman just mentioned, actually, it has two components. The first one being the gross margin in the pricing and cost relationship. The other one is the asset turnover. As the CapEx for the leading node gets more expensive, you can imagine the asset turnover will be slightly lower. Therefore, with the higher margin managed by the cost and price, you can still get the same return on invested capital. That is how we think the right model for our decision-making on capital investment.

Speaker 0

Our next question comes from the line of Aaron Kusak from Lennox Global. Please proceed.

Speaker 3

Thanks for taking my questions. Can you give us some rough numbers around how much of your CapEx spend in the first half was for 28-nanometer, and how much do you think your 28-nanometer CapEx spend will be in the second half of the year?

Speaker 2

In the total, for this year, if we just revised down the CapEx to $7.4 billion, I can roughly tell you more than $2.5 billion will be on 28-nanometer, which is mainly on the first half of this year.

Speaker 3

Okay. As you've seen the demand environment weaken some, have you seen any changes in kind of competitive intensity or the competitive landscape? Some people have talked about 65-nanometer wafer pricing getting worse. What have you seen as far as the competitive landscape?

Speaker 1

We have heard of some competitive pricing activities. I must say, as I said earlier, our prices in all nodes have remained stable. I also attribute the stability to the fact that we do have differentiated proprietary technologies in every node, actually.

Speaker 3

Okay, good. Thank you.

Speaker 0

Our next question comes from the line of Lingling Hu from Goldman Sachs. Please proceed.

Speaker 3

Yeah. Actually, this is Donald Lu. My question is on the margin side. I think Lora at the afternoon conference commented that the profitability, structural profitability, should remain the same now versus a year ago. Would that mean that if your utilization recovers to above 100%, your gross profit margin would potentially recover to nearly 50%?

Speaker 2

I would say I cannot come up with a 50%. I would say if the structural profitability remained as good as before, you have to remember there's also another factor that is the exchange rate, which we cannot control. However, given the same structural profitability, if the utilization rate improves, of course, the margin will go up too.

Speaker 3

If the FX remains stable and the utilization goes up to, let's say, 100%, would the margin be relatively comparable with a year ago?

Speaker 1

Remember, actually, last year, almost all year last year, we ran, I used to work significantly, significantly above 100% last year. Last year was quite unusual. Also, Lora mentioned the exchange rate. Relative to this year, last year's exchange rate was favorable. Yes, I think our structural profitability compared to last year has actually improved a little bit. This year has actually improved a little bit. However, the very high utilization rate of last year and the favorable exchange rate, I think, made a comparison to last year very difficult.

Speaker 3

Right. Right. Okay, thank you.

Speaker 2

In the interest of time, I think we'll only accommodate two more callers' questions.

Speaker 0

Our next question comes on the line of Steven Polano from HSBC. Please proceed.

Speaker 3

Great. Thank you for sneaking me in here. You're expressing a lot of confidence about this fourth quarter pickup, a significant utilization rate recovery. I guess kind of two questions along that. When I first look at your third quarter guidance down about 68%, does that imply that the 4X nodes and below are still growing quarter on quarter and all the softness is kind of in the middle nodes, the 65, 90-nanometer portions? Further, as I then think about the fourth quarter significant utilization rate recovery, I guess that implies that if it is in the middle nodes, you're then assuming, I guess, though, that all that inventory is burned and it's the middle nodes coming back driving the utilization rate pickup. Can you give me a little color about the guidance and the sequential growth rates by node?

Speaker 1

Lora, you want to do that? I'll answer the question. Actually, the demand of 40-nanometer nodes is rising, has risen, and is rising. The demand in the middle nodes at 65, 90, and 130 are not good. The demand on 0.18, 0.25, 0.35, 0.6 are all very good. It's the middle nodes that we have insufficient demand on.

Speaker 2

My next question, one point to Chairman's comments. We will have some 28-nanometer on the fourth quarter as well.

Speaker 0

Our next question comes on the line of Michael McConnell from Pacific Crest Securities. Please proceed.

Speaker 3

Thanks for allowing me to ask a follow-up. I just wanted to know, when you say inventory levels are five days above seasonal, what would they be? What is seasonal in your view for those? Just trying to get a base for that level of DOI.

Speaker 1

Do you have a number?

Speaker 2

Michael, the full supply chain is five days above seasonal. I have a graph, but I have a hard time to read the numbers. I can share with you just our customer side, which is about four days above seasonal. In this case, we think our fabulous customers' current level is about 69 days, and the seasonal level is 65 days. The IDM customers, the current level is 87 days, and the seasonal level is 82 days. That's about four to five days above seasonal. I also understand people calculate the DOI a little bit differently, so this is all relative.

Speaker 3

Okay. Yeah, that's very helpful. Last question, just on the FinFET ramp at 14-nanometer, is that 2014 or 2015?

Speaker 1

No, no. That should be the fourth quarter of 2013.

Speaker 3

'13. Okay.

Speaker 1

Fourth quarter. Fourth quarter of 2013.

Speaker 3

Okay. Great. Thank you.

Speaker 0

There are no further questions at this time.

Speaker 2

This concludes our Q&A session. Thank you for joining us this morning, and we hope that you will join us again next quarter. Goodbye.

Speaker 0

Before we conclude TSMC's second quarter 2011 webcast conference call today, please be advised that the replay of the conference call will only be accessible through TSMC's website at www.tsmc.com. Thank you all.