00:00It really depends on customer demand. In the U.S., a lot of customers want to go there,
00:07so we will expand over there. But for the leading edge technologies, it will be in Taiwan because
00:14it's a heavy cooperation between the R&D people and operation people for practical reasons.
00:24And leading edge will continue to be led by Taiwan, you think, over the U.S. market?
00:29And no changes to that at all, even with you adding a lot more capacity in the States?
00:34Yeah, that's for practical reasons.
00:36Is it possible, though, to speed up how quickly that advanced tech can be
00:40shifted from Taiwan to the States?
00:43Yeah, we can try to do that to shorten the gap.
00:46What does that transfer gap look like then? If right now it's several years,
00:50Taiwan is ahead. What does that actually look like in the future?
00:54We don't have a specific timeline now, but we can try to accelerate that. We think we can try
01:01to accelerate.
01:01Could it be shortened to months, do you think?
01:03It will be difficult, challenging.
01:06Okay, so it stays at least one year behind then.
01:12CapEx, it's $52 to $56 billion.
01:15For this year.
01:15Yeah, for this year. So can you tell us exactly how much of that is going to the U.S.,
01:20given you've got such a big focus on the capacity built out there?
01:23We don't just break down those numbers, but we do tell people that in the next three years,
01:30the total CapEx is going to be significantly higher than the number in the past three years.
01:36So that is the evidence of our strong conviction in the AI megatrend.
01:42Our sources are saying, for instance, at least four additional fabs could be added in the U.S.,
01:49in addition to what's already being pledged. Is that realistic?
01:53It depends on customers' demand. We are looking at very strong customer demand.
01:58Could you give us the number?
01:59We don't have the number.
02:01Do you want to ask about Intel as well? I'm wondering whether you see any potential
02:05for collaboration with the business, given they've got very strong expertise in advanced
02:10packaging technology in particular. Could that be an area for you to work on,
02:14given you're already outsourcing this to third parties with your constraints?
02:18It depends if it makes sense to the customers and also if it makes sense to our wafer business.
02:25The advanced packaging business to us is strategic. It enables our wafer business.
02:32So if there are more alternatives in the market which can enable our business, we can consider that.
02:40Would you weigh up investing in Intel just like some of your biggest customers have done?
02:45No discussion at all. What I'm trying to say is it can be considered.
02:52Taiwanese dollar, in our survey of different FX strategists and analysts at Bloomberg,
02:59they're actually saying it's going to end the year at 30.9. So what is the impact to you if you see
03:05that further sort of strengthening and what sort of headwind does it represent?
03:09Foreign exchange rate between US dollar and T does affect our profitability. In the past,
03:16for every percentage change in foreign exchange rate, it will affect our margins, gross margins,
03:24and operating margin by 40 basis points. Nowadays, when the margins are higher, the impact become
03:33less sensitive. So nowadays, it's about 30 basis points. Either way.
03:40And how are you looking at hedging strategies as well?
03:43The easiest way is to sell US dollar into NT. However, the market impact should be considered.
03:51If we're not able to sell all these, then we will do the forward contract. And if we still cannot
03:57accommodate all the positions, then we will continue to do moving the US dollar to the offshore entity,
04:07which has US dollar as its functional currency.
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