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Technology Stocks : Semi Equipment Analysis
SOXX 308.38+0.6%Nov 3 4:00 PM EST
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From: Sam7/19/2019 8:22:25 AM
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Excerpt from TSMC CC. More to come over the weekend when I have more time.

"Although our business continue to be impacted by the softer overall global economic condition, customer inventory management and high-end mobile product seasonality, we have also passed the bottom of the cycle of our business and began to see demand increasing.

Moving into third quarter this year. TSMC's business will be driven by new product launches of premium smartphones, the acceleration of 5G development and the increasing adoption of our industry-leading 7-nanometer node by high-performance computing applications.

Now let's talk about the inventory. Our fabless customers' overall inventory is being gradually digested throughout second quarter. We expect it to reduce to several days above seasonal level exceeding the second quarter, leading to an improved inventory environment for the second half of this year. Although a soft global economic condition and trade uncertainties remain, we expect our business to be much stronger in the second half as compared with the first half of this year due to the strong demand for our industry-leading 7-nanometer technology services.

Now regarding 2019 CapEx planning. At the end -- at the beginning of this year, we have guided our 2019 CapEx budget to be between $10 billion and $11 billion. However, over the last three months, we have seen an acceleration in the worldwide 5G development. We believe this will lead to an increase in demand for our 5-nanometer and 7-nanometer technologies beyond the level we forecasted three months ago.

We are, therefore, working closely with our customers on the most effective capacity planning for our N5 and N7. We expect our 2019 CapEx is likely to exceed the high end of our guidance range. We are currently evaluating our 2019 CapEx plan and expect to provide you a more detailed update during our October earnings conference."
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