Taiwan Semiconductor Manufacturing Company Limited (2330) Earnings Call Transcript & Summary

Good afternoon, everyone. And welcome to TSMC's Second Quarter 2026 Earnings Conference and Conference Call. This is Jeff Su, TSMC's Director of Investor Relations and your host for today. Today's event is being webcast live through TSMC's website at www.tsmc.com, where you can also download the earnings release materials. [Operator Instructions] The format for today's event will be as follows: First, TSMC's Senior Vice President and CFO, Mr. Wendell Huang, will summarize our operations in the second quarter 2026, followed by our guidance for the third quarter 2026. Afterwards, Mr. Huang and TSMC's Chairman and CEO, Dr. C.C. Wei, will jointly provide the company's key messages. Then we will open both the floor and the line for the question-and-answer session. As usual, I'd like to remind everybody that today's 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. Please refer to the safe harbor notice that appears in our press release. And now I would like to turn the microphone over to TSMC's CFO, Mr. Wendell Huang, for the summary of operations and the current quarter guidance.

Thank you, Jeff. Good afternoon, everyone. Thank you for joining us today. My presentation will start with financial highlights for the second quarter of 2026. After that, I will provide the guidance for the third quarter of 2026. Now let's move on to revenue by technology. 2-nanometer process technology contributed 3% of wafer revenue in the second quarter; 3-nanometer, 5-nanometer and 7-nanometer accounted for 30%, 33% and 11%, respectively; advanced technology, defined as 7-nanometer and below, accounted for 77% of wafer revenue. Moving on to revenue contribution by platform. HPC increased 20% quarter-over-quarter to account for 66% of our second quarter revenue. Smartphone decreased 4% to account for 22%. IoT increased 4% to account for 5%. Automotive increased 15% to account for 4%. DCE increased 5% to account for 1%. Moving on to the balance sheet. We ended the second quarter with cash and marketable securities of TWD 3.5 trillion or USD 110 billion. On the liability side, current liabilities increased by TWD 144 billion quarter-over-quarter, mainly due to the increase of TWD 58 billion in accounts payable and the increase of TWD 48 billion in accrued liabilities and others. In terms of financial ratios, accounts receivable days increased by 3 days to 29 days. Inventory days increased 7 days to 87 days, primarily due to the ramp of N2 technology. Regarding cash flow and CapEx. During the second quarter, we generated about TWD 783 billion in cash from operations, spent TWD 496 billion in CapEx and distributed TWD 156 billion for third quarter 2025 cash dividend. Overall, our cash balance increased TWD 99 billion to TWD 3.1 trillion at the end of the quarter. In U.S. dollar terms, our second quarter capital expenditures totaled USD 15.7 billion. I finished my financial summary. Now let me -- let's turn to the current quarter guidance. Based on the current business outlook, we expect our third quarter revenue to be between USD 44.6 billion and USD 45.8 billion, which represents a 12% sequential increase or a 37% year-over-year increase at the midpoint. Based on the exchange rate assumption of USD 1 to TWD 32, gross margin is expected to be between 65% and 67%, operating margin between 56% and 58%. This concludes my financial presentation. Now let me turn to our key messages. I will start by talking about our second quarter '26 and third quarter '26 profitability. Compared to the first quarter, our second quarter gross margin increased by 150 basis points sequentially to 67.7%, slightly ahead of our guidance, primarily due to cost improvement efforts and a slightly higher overall capacity utilization rate, partially offset by dilution from our overseas fabs. We have just guided our third quarter gross margin to decrease by 1.7 percentage points to 66% at the midpoint, primarily as we expect the steep ramp-up of our 2-nanometer technology to dilute our gross margin by about 3 to 4 percentage points. This dilution is expected to be partially offset by very strong demand for our leading-edge technologies and continued cost improvement efforts, including productivity gains and across node capacity optimization. Looking at the second half of the year, given the 6 factors that determine our profitability, there are a few puts and takes that I would like to share. First, we expect the steep ramp-up of our 2-nanometer to dilute our gross margin by about 3 to 4 percentage points in the second half of the year. Furthermore, as the scale of our overseas expansion grows, we continue to forecast the gross margin dilution from the ramp-up of overseas fabs in the next several years to be 2% to 3% in the early stages and widen to 3% to 4% in the latter stages. On the other hand, demand for our leading-edge technologies is very strong. In addition, we continue to leverage our manufacturing excellence to generate more wafer output and drive greater across node capacity optimization in our fab operations to support our profitability. Finally, we have no control over the foreign exchange rate, but that may be another factor. Next, let me talk about our 2026 capital budget. At TSMC, a higher level of capital expenditures is always correlated to higher growth opportunities in the following years. With our strong technology leadership and differentiation, we are well positioned to capture the multiyear structural demand from the industry megatrends of 5G, AI, and HPC. Given the continued strong structural demand from our customers, including the newly emerging Agentic AI market, we have decided to raise our full year 2026 capital budget to be between USD 60 billion and USD 64 billion as we continue to invest heavily to support our customers' growth. We always collaborate closely with the tool suppliers well in advance to prepare the capacity, whether it is a strong up cycle or down cycle, just like our customers collaborate with us well in advance to plan our capacity. Thus, we do not foresee any bottlenecks to our capacity expansion plans. About 70% to 80% of the 2026 capital budget will be allocated for advanced process technologies. About 10% will be spent for specialty technologies and about 10% to 20% will be spent for advanced packaging, testing, mask-making and others. Even as we invest for the future growth with this level of CapEx spending in 2026, we remain committed to delivering profitable growth to our shareholders. We also remain committed to a sustainable and steadily increased cash dividend per share on both an annual and quarterly basis. In 2025, we paid TWD 467 billion in cash dividends, up 28.6% year-over-year as TSMC shareholders received a total of TWD 18 cash dividend per share. In 2026, they will receive TWD 24 per share, up another 33% year-over-year, and we expect a continued and increasing cash dividends per share in 2027 as well. Now let me turn the microphone over to C.C.

Thank you, Wendell. Good afternoon, everyone. First, let me start with our near-term demand outlook. We concluded our second quarter with revenue of USD 40.2 billion at the high end of our guidance in U.S. dollar terms driven by strong demand for our leading-edge process technologies. Moving into third quarter, we expect our business to be supported by continued strong demand for our leading-edge process technologies, including the steep ramp of our 2-nanometer technology. Looking ahead, we observe consumer and price-sensitive end market segments are being challenged due to the impact of rising component prices and macroeconomic uncertainties. As such, we are being prudent in our business planning while focusing on our fundamentals of our business to further strengthen our competitive position. Having said that, AI-related demand continues to be extremely robust. The AI megatrend continues to drive the need for more and more computation, which supports the robust demand for leading-edge silicon. Our customers and customers' customers, who are mainly the cloud service providers, continue to provide us with a very strong signal and positive outlook. Thus, our conviction in the multi-year AI megatrend remains very high. Supported by our robust technology differentiation and the broad customer base, we now expect our full year 2026 revenue growth to be slightly above 40% year-over-year in U.S. dollar terms. Now let me talk about the acceleration of Agentic AI. The AI market continues to be very dynamic. The emergence of Agentic AI is leading to a resurgence in the role of CPUs in AI data centers, which drives more silicon demand in addition to AI accelerators. We believe this is positive for TSMC as no matter what CPU approach is taken, whether it's x86, ARM-based, or RISC-V architecture, they are almost all TSMC's customers. We are already collaborating closely with our CPU customers and working to support them with the most advanced technologies and necessary capacity, so they can capture the Agentic AI market opportunities. Next, let me talk about TSMC's capacity expansion strategies. To address the structural increase in overall long-term semiconductor market demand profile, TSMC collaborates closely with our customers and our customers' customers to plan our capacity. Given the fundamental complexity of leading-edge technologies and the design-in and lead time involved, we also have a very good idea of their multiyear product road map and production plans. This is important because it takes more than 5 years to develop the technology and product, prepare the capacity, and ramp it up to high-volume production. Internally, TSMC employs a disciplined capacity planning system to assess the market demand from both a top-down and bottom-up approach. This is a continuous and ongoing process. Based on our assessment, we are stepping up our CapEx investment to increase our capacity, to support our customers' future growth. Now with a strong collaboration and support from our leading U.S. customers and the U.S. federal state and city governments, we would like to announce an additional USD 100 billion investment in Arizona. This is to build several more semiconductor logical wafer fab for 2-nanometer and below technologies as well as advanced packaging fabs to support the strong multiyear demand from our leading U.S. customers. We believe this investment will help to further foster the development of the U.S. semiconductor ecosystem, strengthen the supply chain, and support an increasing number of high-tech, high-paying jobs in the United States. At the same time, we are building 13 leading-edge and advanced packaging fab in Taiwan over the next several years, and we will continue to further invest in Taiwan. Therefore, TSMC's semiconductor technology and manufacturing work continue to play a pivotal role in supporting the global semiconductor industry while unleashing our customers' innovation. Now let me talk about the current N3 capacity expansion. We are executing well on our global plan to add 3 additional 3-nanometer fabs, one in Taiwan, one in Arizona, and one in Japan to support the robust multiyear pipeline of demand for 3-nanometer technologies. In addition to all the new fabs, we continue to convert 5-nanometer tools to support 3-nanometer capacity in Taiwan. We are also leveraging our manufacturing excellence to drive greater productivity across our fab in all locations to generate more wafer output. We are also focusing on capacity optimization across node, which including flexible capacity support among N7, N5 and N3 nodes. In summary, we are using multiple levers to do everything we can, wherever we can, however we can to maximize the support to all our customers. Now let me talk about our mature node strategies. TSMC's strategy at mature node has not changed. Our first priority is to fully support our customers. And now we continue to increase, not decrease our mature node capacity in the higher value-added segment. For example, we are increasing our mature node capacity through JASM Fab 1 in Japan for CMOS image sensor application and ESMC in Germany for automotive and industrial applications. In today's market, outside of specific areas such as power management IC and CMOS image sensor, the mature node demand in other commodity area is not that strong. Thus TSMC will continue to focus on the higher value-added and strategic segment by ensuring we have a necessary capacity to support our customers' growth. Finally, let me talk about our A14 status. As I mentioned a few minutes ago, the complexity of leading-edge technology continue to increase. The lead time to develop a new technology such as A14, building the capacity, and then ramping it up now takes 5 to 7 years. There are no shortcuts. Our A14 technology representing the second generation of nanosheet transistors and deliver another full node stride from N2 with performance and power benefit to address the incessant need for high-performance and energy-efficient computing. Compared with N2, A14 will provide 10 to 15 speed improvement at the same power or 25 to 30 power improvement at the same speed and close to 20% chip density gain. A14 technology development is on track and progressing well. Internal product-like vehicle demonstrated close to 90% device performance and close to 90% 256 megabits SRAM yield. We are observing a strong level of customer interest and engagement from both smartphone and HPC AI applications and customer now tape-out activity is ongoing and ahead of schedule. Pre-production will start in 2027 and volume production is scheduled for 2028. With our strategy of continuous enhancement, we also introduced A13 and A12 as extension of the A14 family. A13 represents a further advancement of A14, achieving an over 6% die area saving through an innovative 97% optical shrink. Through continuous design technology co-optimization, A13 also drive further performance and power efficiency improvement. A13 design rule are backward compatible with A14 to ensure smooth IP migration. We also introduced A12, which will bring our innovative superpower rail technology to the A14 platform for superior performance, power, and area benefit. Both A13 and A12 are scheduled for volume production in 2029. We believe A14 and its derivative technologies will propel our A14 family to be an even larger and long-lasting node for TSMC than N2. Just like 2-nanometer technology is a larger and longer-lasting node than 3-nanometer, and here further extend our technology leadership position well into the future. This concludes our key messages, and thank you for your attention.

Thank you, C.C. So this does conclude our prepared statements. [Operator Instructions] Please note that we will conclude today's meeting at around 3:10 or so. So we will try to get in as many participants your questions as possible. But if we're not able to, we do apologize in advance, and thank you, everyone, for your patience. So operator, well, let's begin the Q&A session. We'll take the first 2 questions from the floor, and then we'll go online. Maybe again, left, center, right. Maybe we'll take the first question, Sunny Lin from UBS, please.

Congrats on the very strong performance and outlook. So number one, I want to double-click on the CapEx. So, very encouraging CapEx outlook. And I do think it's essential that TSMC showcase a stronger determination in capacity expansion, given the stronger demand and the very tight supply. And so beyond 2026, I think every large client also wonder how aggressive TSMC is planning for CapEx. And so back in the COVID super cycle, TSMC did provide a 3-year CapEx outlook back then. And so I wonder, at this point, will it be possible for you to share any color, maybe for the coming 3 years CapEx? Thank you.

Okay. So Sunny's first question is regarding CapEx. She does believe it's important, essential to show our determination to support our customers with these large CapEx investments. So she wants to know, do we have a 3-year CapEx guidance '26, '27, '28, similar to what we did back in 2021?

Okay. Sunny, we do not have a number to share with you. But as you know, we invest CapEx this year for the future business opportunity. And as long as there are business opportunities, we will not hesitate to invest. As you can hear from our prepared remarks that we -- our conviction in the megatrend, AI megatrend multiyear is very strong, and we are stepping up the CapEx, including increasing this year's CapEx. Last time, we said our CapEx in the next 3 years will be significantly higher than the CapEx in the past 3 years. Now is the -- the CapEx in the next 3 years will be even more significantly higher than the past 3 years.

Yes. Sorry, maybe let me follow up on CapEx from another...

Second question.

Yes, sure. So you just announced additional $100 billion CapEx in the U.S., and I think that's pretty important for you to secure the business in the U.S. as well. And so now with total $265 billion CapEx in Arizona, what's your current plan to bring on the capacities in Arizona in the coming few years?

Okay. So Sunny's second question is on to, C.C. said, investing additional $100 billion in Arizona based on the strong demand from our customers. So the total investment now is $265 billion. What is the schedule time frame or the plan for this investment? Is that correct, Sunny? Yes. Okay.

Sunny, the schedule will depend on the market situation. You know that. So today's situation, the megatrend is so strong so that we announced additional $100 billion investment in Arizona. How many fabs? Many. So actually, let me say that, say probably, additional 4 more fabs will be built.

And that's combining front- and back-end?

Yes.

Okay. Thank you. Let's go to the middle. We have Charlie Chan from Morgan Stanley. We'll go left, middle, right from where I sit.

So first of all, congrats for a very strong outlook. My first question is really about the foundry competition. I understand that there's no shortcut for a newcomer like TerraFab, but how about like Samsung Foundry, right? They got a huge profit from memory business. Intel got a U.S. policy support. So I'm not sure how TSMC is going to address those competition, because apparently, several U.S. companies are engaging with those industry peers. And recently, actually yesterday, ASML just announced to expand the EUV capacity for 2028. Would TSMC worry that your competitors to take more slots and build a large capacity in the future to compete with you in the leading-edge business?

Okay. So Charlie's question is competition from 2 angles. One, he does note, C.C. said foundry competition, no shortcuts, but he says according to the news, many of our customers are engaging with our foundry competitors. One of them in Korea is making huge amounts of money these days. Another one may have the U.S. government policy support. So the first part of his question, how do we see the competition and threat of customers moving to our competitors, number one.

Well, let me say that. Yes, one of my competitors in South Korea, they make a huge amount of money, and I'm jealousy about it. And then the other one in the U.S., they got a very strong U.S. government support. We also got the government support, by the way, although we don't announce it. However, let me share with you, as we said, there is no shortcut. What does that mean? Meaning that in the semiconductor industry, you have to go back to fundamental. Government's help is welcome. Really, we also appreciate that. A lot of money, of course, that's nice to have. But the most important thing as we continue to say is the technology, manufacturing, and customer trust. These 3 fundamental never change. For my 30-some years, 40 years career, it's always the most important thing. And that's always the TSMC's secret recipe to win the business. So from my -- from the competition point of view, choosing a technology, ramping it up is not buying a milk from 7-Eleven. Well, I'm using that -- I'm quoting the sentence for my customer, anyway. It says that you're choosing a kind of a technology partner, it is no shortcut. You need to understand the technology. You need to really utilize it using the test chip, and then something, and work together, and then prepare the capacity and ramp it up. That's why I would say, it takes about 5 years. It's not that today, you think this milk is better, you go to the next store, it's a 7-Eleven. You don't like it, you go to another store. No. So that's my answer, Charlie, is it's -- agree?

Yes. So I hope you can buy more milk, so other people can get it. Yes. So let me switch gears to a more exciting side. C.C. just said you see a very strong signals from customers, customers' customers. You also revised up the full year revenue guide. Are you ready to revise up the 5-year revenue CAGR, especially this AI semi CAGR? I remember it was like high 50%. But here comes the question, right, that Agentic AI demand is so strong, CPU is a great opportunity for TSMC. But how about those kind of memory cost increase, right? It's kind of a big chunk of this kind of AI CapEx. So, what's the update of the AI semi CAGR? And how should we look at the contents of this AI semi related to TSMC's growth?

Okay. So Charlie's second question is regarding the AI-related demand. We do continue to see very strong and positive signals from our customers, customers' customers. We revised up our full year. So his question is around our AI CAGR guidance that we gave in January on a 5-year period, mid- to high-50s CAGR growth. He's wondering if there's any update to that. Agentic AI, a new opportunity, what is our definition of AI accelerator? Do we include that? And what is the CAGR?

Charlie, if you read our message that we continue to invest more. We increased the CapEx with a good reason. So if you're asking about the AI's CAGR, let me give you not a number, but it's stronger and stronger and stronger. So we don't give you the number today because it continue to increase. So we don't know how to answer this question, but stronger than what we said before.

Thank you, Charlie. All right. Let's move to this side. Maybe we'll take the question from Arthur from Macquarie.

First, congrats on the strong execution and performance. My question is regarding the new advanced packaging technology. We noticed that especially the EMIB-T is gaining traction. So how will TSMC react this request?

Okay. Sorry. So Arthur's first question is on advanced packaging and competition. I guess, very simply put, EMIB-T, in his view, is gaining traction. So how do we see the competitive threat from this?

Well, let me say that, our packaging capacity is so tight that now it's limited by customers' growth. So we welcome that additional flexibility in the market. And so that will help TSMC's front-end wafer business growth, which is a majority part of TSMC's business. The technology looks good, according to the newspaper. And we hope they will be successful and so that share some of the loading from TSMC. Today, we're working very hard to shorten the gap between the demand and the capacity. And so as I said, we welcome to have this additional alternatives, and so the flexibility for my customer.

That makes a lot of sense. So a follow-up. So as this is a new technology, right? So if your clients, they ask your support, and our value is support our customers' success, right, how TSMC will handle this special request?

Sorry, your question is...

So if these technologies have some small problem, and then ask our company to support. So how our company accommodate it?

So Arthur's question is, if there is some issues with this technology, do we have a -- are we -- I don't know how to say it. Is there an alternative plan?

Let me answer the question. Our #1 is to support our customers' success. So whatever that we can hear about our customers' business, we want to win. Does that answer your question?

Okay.

Let's come back. We'll take one more here, and then we'll go online and then back to the room. Gokul?

First question on, maybe since you are not wanting to give a longer-term numerical guidance, could you talk a little bit about the philosophy of how you are expanding capacity? Obviously, customer feedback, customers' customers feedback is important. Do you also consider competitive pressure? Because as an outright market leader, having like undersupply for a very long period of time is not really desirable for TSMC, right? You probably want a market which is more balanced. So when you think about your capacity expansion, like how long do you think it takes to fulfill the demand as you see right now? That's one. And second, chips, obviously, is the current shortage. But there is also a lot of discussion about data center delay, power capacity being available. So could you also share some thoughts on how you are layering in that kind of concerns because you don't want your chips to be available, but having to wait for the data center deployment to happen. So just to understand how that goes into your planning framework as well.

Yes. Thank you. So Gokul's first question is, again, how do we plan our capacity and determine the capacity expansion plan. Certainly, we take into consideration the demand, multiyear demand from our customers and customers' customers. But do we also consider the competitive pressures from competitors building capacity? Is that part of our calculus to expand the capacity, one? And then also, what about things outside of chips like data center delays or power, these type of deals?

Gokul, that's a good question. Definitely, every time when we think about the business, we consider the competition. That's number one. And then, we look at where we are. And then we decide a bottom-up and then top-down's assessment of those demand. Those are the typical thing, I mean, in our daily life. So we make a lot of judgment and then we'd be more careful. We talk to customers and customers' customer. Those are the CSPs. And then, we get all their input for the demand. And then we make a judgment. Now remember that I believe every customer tell me the truth, everyone. You put all the truths together, it's not the truth. So we have to make some of the judgment. You know what I mean, since you are laughing. Because all the customers are very aggressive, right? That's the CEO's job. CEO got to be aggressive. So they give me the number of their demand, and I believe they try their best to tell me the truth. So I put all together, all the truths together is not a truth. Mark down that word. So yes, we do a very careful judgment. May not be correct, may not be correct, but we did carefully and because this is a big money, right? This year, we say we increased the CapEx from $52 billion to $56 billion, now $60 billion to $64 billion. And you bet, that will continue to increase. It's a big money. So we do it carefully. So we did all the assessment and that lead to your second question. Are we sure that we deliver the chips to our customer, and they were not put into inventory? So we -- actually, we are checking the AI data centers progress, the building, the location, the demand, the racks, we're checking all that to make sure that TSMC chips will not be put in inventory. That answer your question?

Yes, that's clear. So C.C., so do you -- you still believe even end of next year, we are still going to be running short of supply even with this elevated capacity build-out plans?

You want me to give you a guarantee, right? Let me say that, I believe from this day on all the way to probably 2029, 2030, the demand is very strong. Whether in between there's a dip or not, I'm not very sure. But the trend is so robust that I believe we are witnessing a kind of a new industry. I would like to say the new industry called AI industry, which is so common in our daily life because it's going to affect our automotive, affect the humanoids, robot, and also impact to all the industry. So by the amount of money we put in, I mean, including all the CSPs, this alone is a very important new industry to the world. And so the demand will be there. And the fundamental thing is semiconductor chips, and most of them in TSMC.

My second question is on your profitability. So C.C., you joke that you are definitely jealous of your memory competitor on their margins. But it definitely feels like profitability-wise, longer-term foundry, especially leading-edge foundry should be higher than memory, looking at number of competitors out there. So as you are investing for a lot of your customers, how is that discussion going? Because you are no longer the most profitable semiconductor manufacturing company at this point in time. So you probably have less pressure in terms of passing on your value and capturing your value right now compared to maybe 1 year back.

Okay. So Gokul's second question is on profitability and pricing to a certain extent. Of course, some of the memory makers are making very good profitability and margins today, but he notes the role of foundry could be even more value in TSMC's role as well. So what should be the right way to think about the long-term profitability for your foundry? Should it be better? And then I guess, really pricing into this, what type of pricing approach do we want to take?

Yes, Gokul, your question actually is simple. What is the wafer pricing strategy for TSMC, and what kind of gross margin we should have? The higher, the better, of course. But we are a partner, a partner meaning that I said many times, our customers got to be successful. I don't want to squeeze them out from the market. And besides, we are a very trustable company with our customers. So we don't suddenly increase our price by, which I like to have, 4x or 5x. You cannot survive for that kind of -- for your customer to survive for that kind of a price increase. So we earn our value, and we make sure that our profit, our gross margin is enough for our long-term sustaining expansion. That's to the benefit of my customer and TSMC also. That's our philosophy. So yes, I'm really jealous about the memory companies, 86% gross margin. 86%? About 68%, I would be happy about that. But all right. Anyway, so I answered the question. We are very trustable.

Thank you. Operator, can we take the next 2 questions from participants on the line, please?

Yes. Now it's James Fontanelli from Arete.

Yes. Could I ask about the risk that you see around customer concentration, as AI demand continues to significantly outgrow other end markets? I think your exposure to your top 5 customers is becoming meaningfully larger than at any point in your history. So I'd just like to understand how you see that risk.

Okay. So Jim's first question is risk around customer concentration. We have large customers that are getting larger. Are we worried that we have too many big customers or the customer concentration?

No, that's not our concern. Besides what you say the customers are growing bigger and bigger, we are very happy about it. And some of the customers also growing very fast. So it's not -- Jim, it's not what you said that the bigger customer is growing bigger and bigger. No. I mean that's -- there's a lot of new player in the AI industry.

Do you have a second question?

Yes. So we're seeing your direct customers put capital into both financing, investing and investing in AI demand. Is that something that TSMC is considering?

So Jim's second question, he knows some of our customers are helping to invest in their customers. Jim, if I understand you right correctly, you're asking if TSMC, if this is an approach we would take to invest in our customers. Is that correct? Or financing and investing?

Yes, in the end-to-end customers, not your direct customers.

Right. So in customers' customers as well.

To answer, Jim, to answer your question directly, every company has a different consideration and every company has a different strategy. So far, no, TSMC don't do this kind of financial arrangement because of, we think we are working with current customer with the current model smoothly and also successfully.

Okay. Thank you, operator. Can we move on to the next participant on the line, then we'll come back to the floor.

Next one to ask question, Mehdi Hosseini from SFG.

Two, from my end. I want to go back to the $100 billion investment in U.S. Is there any way you can give us some time line? Is it over the next 3 years, 5 years? How should we think about the progression of this $100 billion investment in the U.S.? And I have a follow-up.