Q4 2019 Earnings Call
To the convincing setup this call may be recorded and monitored for quality and training purposes.
Please hold for the next available operator.
Hello, Good they may have the conference I'd number.
I don't have the comfort E.
Let us and yes, we weren't active fourth quarter earnings copies.
All right as one woman and.
And they have this building up your first name under a stunning.
Yes, it's David D.A.B., I'd and Brown via our own W and.
And what about the name of your company Mr. Brown.
Item a.
We are a.
See I need for Elephant art aid for Apple correct.
Yes, correct.
Thank you and find the these service or brand, but about your email address.
It's David.
First thing.
Ita company Nay dotcom.
Alright. Thank you I'll take you through its already in progress I'll get it kinda Jasmine. Good are you still get you should go quite G. you bought structure.
And we do could get a huge countries the adoption.
Yeah, we do that Oh excuse me.
That's why would come up we said that meet.
Cheese.
Maybe twitchy so he's more from the top them perspective, instead of like walking us from like each part of my isn't right.
We do both.
Okay got you actually Mike. So you do both can you give us some color about like you know distribution, putting high end that some companies that complicated [laughter] rooted I've a follow up yes, correct. Okay. That's helpful. Check that you know the assumption of meetings penetration is based on like there's no change in terms of admin and the school.
Yeah.
That's a good question.
No. The changeover diminish who are you still expect IRET you so our forecast.
We assume the B I seem show.
I understand it.
I think the Oh, yes, the number where you currently forecast does not include to diminish.
I Didnt change.
But who for the whatever the export control ice coming up.
We think this high GCE momentum will continue.
If any are interruption will be very short term.
After going through the supply chain changes and share exchanges I think the momentum can we just had a strong.
Okay second question. So two questions regarding to the management used to mention the cadence it becomes more important in terms of geopolitics.
Situation. So does that change your you know Oh, you caught up your Oh Thats injury question in terms of building other perhaps or the cost structures. So in the possibly only kept bottom manufacturing costs as a man cost that had a factors, but even at current situation do you think that you know you have to today.
Into your conservatism as well.
Oh, you know your views.
Yeah, you're making about frame that building a factory outlet in Taiwan, So a lot more expensive than they do that in pilot, but with all that you Joe I believe that.
The other factors outside of Taiwan becomes like you see the increasing pressure on that you want to during the week for any changes I'm.
On that.
Yes, the cost a in Taiwan is its lowest or reaches across the world. We have been studying it continuously.
And the that decision is made to the.
For two the best interest of our customers.
Yes. The geopolitical those is evolving are we still listening to our customers.
As the priority and at this point, our customer when asked to be manufacturing.
In a higher cost reaching.
There there answer is we cannot be competitive this way so to increase the come to maintain the competitiveness of our customer. Currently this is the family you know we having in the future right now is to it too early to say and still our customer prefer.
We have the lowest cost production is nice and doing business with us. So what is they are willing to pay for higher price.
They they may be special special products, but by and large it's unlikely.
Okay. Thank you. Thank you all right we have a let's move to the line we have quite a few callers on the line. So operator can we take the next call from the line. Please.
Sure. Your next question comes from the line of coal car, we haven't from JP Morgan.
Please ask your question.
[noise], Thanks, and happy New year My first question.
It's on margins.
Given that we're looking at a very strong demand pick up.
Could we talk a little bit about any change in the view on longer term gross margins.
Could we see a meaningful improvement in gross margins beyond the 50 within range that we have been.
In the last four to five years.
And also could you talk a little bit about the margin dilution impact a in second half of 2020 from financing meter is it likely to be more modest given that was already strong seven nanometer demand also.
Through the course of this year and I had a follow up question. Thanks.
Okay. Thank you go let me just a repeat your question to make sure. We got it right. So your first question is asking about sort of with given the strong demand pick up is there any change to TSMC is long term gross margin target why could not be beyond the or about 50% and then your follow up.
Or you know addition to that is looking at this year could the margin dilution from our five nanometer ramp in second half the more modest given the continued strong demand of our seven nanometer.
That's right factor.
Right, we continue to use a 50% gross margin. We think is still a very good target.
All the sector I just mentioned the six factors that will affect our profitability one of them actually relates to the ramp of new nodes. So theres ramp up every you know we will see a margin dilutions.
As it relates to your second question and indeed, we are seeing a margin dilution in the second half of this year.
From the end five Gram.
Is there going to be better than before.
Yes, the only slightly.
Oh and the.
The other factors Digest mentioned include the foreign exchange rate, which is a really uncertain for anybody to guess so at this moment, we believe the 50%.
Gross margin is still a good target for us.
Okay go do have a second question.
Yeah, I'm pretty talk a little bit about what we're seeing in the end minus two and minus three nodes should we anticipate any recovery in the situation in 28 nanometer given overall foundry growth seems to be rebounding and the second part as on 12 and 16 nanometer.
Given a lot of the smartphone customer seems to be migrating to seven nanometer and even find enemy because of the adoption of Friday.
There will be any challenge to backfill 12 to 16 nanometer as these customers migrate to motored ones process not thanks.
Okay. So let me just repeat to make sure we understand again, you're asking about our end minus two went N minus three so first part of your question is do we see any recovery in the demand for 28 nanometer keeping the overall strong demand that we see on this year and then the second part of your question is that we you know with.
A lot of ER products going from 12 in 16 nanometer very quickly to using our seven in our five where we have challenges are difficulty to backfill 12, such 16.
Right, maybe is a 28 nanometer for us.
We used a strong market girls.
28 nanometer, we do you see a little bit better than we expected. However.
We have reiterated hey use that 28 it'd be too is that kept patchy, although people would you be seem to street.
So the utilization is still below our ever reach.
Continuing on meeting we expect it won't be.
Improved you Miss one to two years, what would be would hope, but new specialty technology for our customer to euthanized fit and we start to see the side because though from a new tape out. So we can be sure that a one to two years later that you guys you wait to walk OPEC to come.
Lisa ever reach.
And also 12 in 16.
Even in Chile, we do not see that today's Joe very strong demand and they continue to be a very high sorry, she rate B b. It's all because of we'd be brought up that we continue to improve the technology and its always being utilized so first wave smartphone SPG now.
Hi, all key automotive <unk>.
Okay.
Okay does that answer your questions cocoa, yeah. Thank you very much. Thanks.
Okay. Thank you we will take the next question from a color on the line. Please.
Yes, Sir your next question comes from the line of Bill Lu from you'd be <expletive> . Please ask your question.
Yes, hi, there. Thank you very much and are happy new year question on a five nanometers I remember when seven was ramping you gave us numbers on the number of a tape out I'm wondering if you can help with with five nanometers, either and also by.
Given this number of tape outs, maybe just comparing it to seven and.
Well, it's higher or lower.
Okay, Bill sorry, you broke up a bit at the end, but I think I understood. Your question you want to ask US if we can give you some.
Comparison of the number of tape outs at five nanometer versus ours seven nanometer, adding some their stage.
Well go five nanometers, that's why thank you wells.
Yeah, Bob Nanobees as tape outs, he said, we'd be less getting that given you know recur.
Good to hear him stage of the time. However, the most importantly, he has got the highwall you hear about it's almost equal.
So we expect that our five nanometers of remedies February phosphates rules and you will contribute about chemicals into this year. So.
Okay. So.
Yeah I assume then.
Im sorry, just a just a finished my first question so it yeah.
Hey, soon then that up five nanometer will be in terms of our wafer capacity they got seven.
Ooh up your genes are kept that you're right now and to me into customers that demand.
Very high demand. So that's all I can say.
Great and second question as a follow up on Gulf Coast question on 28 nanometers. As you develop these specialty technologies and can you talk about what kind of applications are expected to use these new specialty technologies.
Yeah, sorry, okay, because you're breaking up a little bit you're asking build on 28 nanometer, we talk about developing specialty technologies.
For 28 nanometer. Your question is what type of applications.
I will be used or in specialty technologies targeting.
Let me be or did you specific.
You broke in the 28 nanometer into 22 denominators geometry.
And the auto policies are one of the direction. We are working now which can be applied to our loud though for idle.
Yes.
Also a price to some specialty starch OS.
Cmos image sensor.
Or others.
Hi.
Okay. Thank you Bill.
Let's move on we'll take one more question from the line and then come back to the floor.
Your next question comes from the line of Brett Simpson from Arete Research. Please ask your question.
Yeah, Thanks, very much and happy new year everyone.
Just had a question on China, China was more than 100% of your.
Q4, your Q4 sales growth on a year on year basis and sales more than doubled in 29 team from China. Despite the headwinds from crypto can you maybe talk a bit more about the region or what's driving so much growth and how should we think about China growth specifically in 2020 . Thank you.
Okay. Brett Please allow me to repeat your question your questions about our China business.
You point out that it was 100% of our fourth quarter growth and grew quite strong in 2019, despite the drop off in cryptocurrency. So you want us to comment on how we should think about China.
As a percentage of sales and future growth drivers going forward is that correct.
That's right thanks, Jeff.
Well, China, it's about 20% of our business and has been stable.
Around that number last year this year.
So so what's changed is Uh huh, let's changes I think the last year, we see the China growth, particularly strong.
And.
And no other regions, which at U.S. probably grows this is less so in batteries.
That is on distinction for this way.
We continue going on I think though we expect to maintain this level.
Let me add some color to it.
Essentially the China maybe.
Major injuries, which kicked him she's also steel fiveg yeah himself.
Two years ago power will we have some kind of a big increasing the grief occurring here, but right now.
Become normal.
Duration.
Okay, but do you have a second question.
Just a follow up on that on that question.
Looking at 2020 .
Can you, maybe just sort of help us with the drivers for growth from China do you think it'll be mainly fiveg smartphone related.
Is there going to be quite a a meaningful contribution from other markets like HPC any anymore color would be very helpful.
Alright, Irrawaddy fiveg related.
Both our smartphone no matter what do you increased and also the and then working that's a U.S.P. area. That's a two major area that China is a P series that will be increasing 2020 .
Okay, but do you have a second question.
Yeah. Thanks to the second question is is really targeted at HPC can you maybe talk about how much of EUR seven nanometer capacity is running HPC at present, I think you were planning to ramp that in the second half and 19, but any more color on the portion of a seven nanometer running HPC.
It would be helpful and how does this scale as we look at 2020 used to seven nanometer HPC and I think you mentioned five nanometer HPC chips would would actually ship in 2020 .
What would this be a used for any anymore help there would be would be would be great. Thank you.
Okay, Brett let me just repeat your question. The first part is on a how much of our seven nanometer capacity is for H.P.C. products. How much was this last year, how do we expect this capacity for H.P.C. to scale 2024, seven nanometer and then the second part is four five now.
No matter.
What types of HPC products or applications are being used on five nanometer.
Well, we do not disclose the capacity breaks down.
For specific a node.
In terms of revenue under S.P. she.
In seven actually Oh, I wanted to say that you kind of cumulative grow to increase.
And we expect that.
This momentum will continue.
In the next few years.
Well you five.
So we say.
It's driven by.
Mobile home.
On the edge fishy.
Steel that too picky say, increasing this year.
Okay. Thank you, let's come back to the floor for open the floor for question next question will come from Morgan Stanley 's Charlie Chan.
Having here. So I mean first person is about your future technology developments right. So next year I'm not sure if youre going to introduce soco the.
No major pro Francis and can you come in that a little bit and.
He's led the extension of the current five nanometer doesn't mean, possibly to your gross margin improvements. So there is a first question.
[noise] burst.
We continue to improve the performance of each loan.
So next year, you talking about though why.
Pro.
I mean zipper or an all forever. Okay. Okay, you won't be parity at this year's apply Pedro feature that's for sure.
And all the major customer why you see.
As so the.
Gross margin improvement that towards the to him as a previous along with the tests about a seven quarter two.
Six to eight okay, six to eight quarter to reach that companies are ever.
Okay, So I would caution that ER.
Five nanometer.
Gross margin will continue to improve into next year. That's for sure. Okay. Thanks, and next is I'm really interested in euro three nanometer rise apparently are placed the visibility meaning the cost per fancy. Sir do you think you can really reduce the cost per fancy.
Label as see nanometer and I'm also curious given this assumption or do you think it's P C or mobile will be a bigger user for your Cummins three nanometer.
Okay, so CP or smartphone.
Thanks.
So Tracy is the cost I do you continue to reduce.
That's that's for sure.
Now who's going to use it that's a major to a question.
Again still high years smartphone and S.P. she will be the users.
All right I cannot be more specifically to the are you.
That's.
I can I switched back to some near term for.
Let's stick with two questions first and then you go back into queue. We can come back column. So I. Thank you next question will come from C or let's say Sebastian hope.
Right.
Thank you happy new year. So my first question is to follow the on Chairman's comments about how are you seem to find you momentum will continue to be strong even if there's a change on viewers exporting rule, maybe just some near term disruption because just as it has to be evaluate this.
Margin change so can you elaborate more about what's the supply change hands. You have you have seen to make your searcher given such confidence that there will be just a near term disruptions isn't there some change on the exporting Roe.
Well. This is a on this is a forward looking analysis. So please.
I think in some of you also get analysis basically the smartphone you have to look at this smartphone demand for year.
And there is there and then look at the Fiveg penetration per year.
Who will be the smartphone supplier you can change who will be the.
Shares and where to five key Ah base station between the time produced that will change. So all these things really depends on the it boils down to really to the forward looking a smartphone demand would that be into.
Good.
That's the analysis I think.
If anything any disruption you'll be assured shorter term yeah.
Okay. So my follow up question on that is smartphone we understand so is a brands they lose sure B C brands will pick up but what about the infrastructure. If the if there's a disruption on the infrastructure because one of the key infrastructure supplier may not have the critical process.
Yes.
So which means the whole fighting for spirit, our own maybe slow down postpone and what's the point of having those fight to smartphones with a host of March in whole Fiveg. If this would be postponed.
I think I've seen this you will find a I think there's no no business. This is just one player for too long. Okay. The second third player will listen only to have come up and it could be a pretty soon and is in our business always seeing a competitive fare environment.
So yes, we have a number one entered the market, but a number two number three is not too far away.
Okay. Thank you my second question is on the guidance the comedy good this year that the foundry industry is growing 70% sami's, excluding memory is about 8%.
I think even if I look, but historically the usually I think the formula for TSMC grow is usually the global GDP and Sammy Isabella Q3 put in for a bump that foundry ought to be about that it just seems a little bit about that so here does it get 5% to 10% of the character. So I think that is very simple formula but.
Has the formula change so I mean, the historically semiconductor is highly correlated with the global GDP growth to some extent.
So if TSMC or what the foundry just growing faster or is it like the foundry to the become the outlier.
Or is because also goes you're implying about a hole in this whole economy is growing faster.
Now this time we have.
Hi, all gross weight right for foundry and for TSMC.
It all because of all driven by of Fiveg and as a application.
So whether we can.
Increased our forecast for example, kitchens, you always say, 5% to 10% cake or is that our goal for we certainly hope that we can exceeded that but this year is still too early to say, but we stay what we say.
The foundry industry walkie, 17% at TSMC will be better than that.
That should let me let me add to this this year if I mean, it does change that we put it in the.
Korean captive Korean players on the captive into the foundry.
Okay, which is they do that and constantly so this time, we put the.
Korean players captive into the foundry business. So that's why you see the growth.
Quicker faster.
So if we also look at the I think the company also make a comment so you're seeing your five your character to be a higher at a high end of the 5% to 10%. So so it's not just one year why stucco fashion dipping. So I think people look at the longer timeframe, which means I think there will be.
More I think the correlation with a global GDP I think that make more sense more representative so theres openings that what salaries and tech innovation, that's going to drive the global economy grow faster in the next couple of years or is it just because nobody is still grow as the growth at 2% put.
Sam is foundry citizens become the outlier that gap is getting bigger Oh, we don't want to say is an outlier. We continue to forecast the global GDP steel, England normal situation.
For white get to treat patients between the two big country did not deteriorate.
But for semiconductor I want to say that so the conclusion of the semiconductor you are like continue to increase provides she got you can see they'll figure example, even the smartphone you can see the peak example, you in the automotive.
And you can see the I O T is a big increase also so now changing our war.
And that all because of semiconductor content is not because of its GDP thought to be become.
Go faster at least not because of seven countries have outlier you'll continue to easily.
Yeah, and remember last year as Wendell said, the you see some industry ex memory was a decline. So obviously, there's a base effect in place well.
For 2020, Oh, yes, sure, but talking about five years I'm sure yeah. Okay. Thank you, let's move up back to the line. Please and we'll take the next question from the line. Please operator.
Yes. Your next question comes from the line of Mehdi Hosseini from <unk>. Please ask your question.
Yes. Thanks for taking my question I have one clarification. When you were referring to five nanometer does that include six and if it doesn't what is your view of availability of six nanometer by year end 20.
Glad to repeat the question. He says that five nanometer, including ships were not no. She sees a seven nanometers up their money.
So we look at the 77 process use as a one time money five Isa another bit don't.
Okay, and you still on schedule to have a six available by end of this year correct.
More importantly at year end they'll be here right now he's reighty or you know rate due for our customers the tape out.
Sure. Okay, and then in terms of just the we're talking about the growth more than 20% at the same time one of the leading microprocessor manufacturer based in North America has talked about increased outsourcing and I just want to get your view, how when you look.
Look into the longer term would that would there be a structural change in semiconductor manufacturing, where TSMC would actually be.
Be able to grab a higher market share because there would be more outsourcing specifically.
From a key.
Company.
Based in North America.
All right. Let me repeat your question Med D. I think youre asking us to comment on the potential for an increased outsourcing from a major microprocessor or city you vendor.
Long term could this be a structural change and the potential for long term longer term outsourcing.
Yes.
We certainly worldcom, that's a outsourcing continue to grow.
And for TSMC, Oh, I can say, so we either what we'd be better of the technology to be now customers are requirement.
And we are confident that we are the best technology leader and we have excellent manufacturing.
And.
Of course as a result, we expect that we can some market share out of it.
But that is for the future for for TSMC is of course.
I cannot be more specific again that.
Okay. Thank you.
Let's move on we have a follow up question from the line from JP Morgan's Gokul Hariharan.
Thanks, Jeff So quick question on the.
Hi end of five to 10 than growth.
Could you talk a little bit about why only high end of 5% to 10% given the capex increased seems to be 40% to 50% from the lost a lost a kind of and then well tend to 11 billion kind of Capex range over the last five years.
Any reason why we're a bit more I'm cautious do we feel that the a five year cycle. After a couple of years could start to kind of diesel rate, especially given oh, yeah. We're already starting off at the very strong 20% kind of growth. So just wanted to.
Think about the puts and takes in terms of the high end of hydrogen for sand and why not a stronger than that growth given the big jump in capex and a indication that capex could stay around these levels, even going into the 20 nanometer era.
Okay Cocoa, let me try to summarize your question basically Cocos asking.
Well why our long term growth target is only at the high end of 5% to 10% when our Capex has increased 40% to 50% versus the 10 to 12 billion in the past. He is asking are wondering is it because we think taking more cautious view that fiveg cycle, maybe more is strong.
Your next trip up may slow down after that and so why do we know still say at the high end of 5% to 10%.
Last year before we increase the Capex, a we were looking at somewhere in the middle of the 5% to 10%.
The afterwards, when we see the.
Ramp in Fiveg deployment.
We increased the Capex and now we're looking at high end of the 5% to 10% range. So that is the difference.
Also let me explain this from a capital intensity point of view last year, while we increase the capex still capital intensity as it was over 40%. There should we think it will be lower than 40% and from next year, although its too but still pretty early.
We think it will be somewhere between 30, or 35%, which is pretty similar to the old norm that was used to say before.
Okay cool.
Do you have a second question yeah, Yeah, Yeah, just one more broader question for you or at a board level.
The new could you talk a little bit about how.
The board things about.
The isn't the petitioning as.
Boundary for everyone everybody's foundry given the the broader geopolitical changes that are happening I don't want to go into each episode in terms of like the change in the de Minimis rules et cetera, but thinking for the five years out.
Oh, what are the steps that the board and can bring to end of still ensured that.
Isn't again remain ever be foundry, even in a Uh huh.
More challenging kind of geopolitical environment and a lot more policy enerplus compared to save a lot by the revenue.
Okay.
Let me try to summarize your question again, I think he's asking Cocos asking for Mark to please share your thoughts on.
From a board level TSMC is positioning as everyone's foundry of course, we're facing a lot of different geopolitical changes.
And challenges SCOTUS needless to comment on each one but generally how are we thinking about five to seven years out how TSMC can position ourselves and how we can remain to be everyone's foundry.
Yes the.
First of all.
Currently Uh huh.
We discussed this strategy with the board and aboard a fully agree with our current strategy okay.
And of course this strategy contains several necessary component first of all we develop our technology ourselves.
For the technology, IP and know how and technology all developed in Taiwan here.
Secondly is.
Another as necessary element is our technology has to be leaders. When your technology leaders people will have to come to you and ER and that's how we maintained.
To be everyone's foundry there are exceptions of course.
Because of their domestic.
Trade policy that I cannot.
Overcome but basically on that so far this strategy should be able to play play on.
Okay does that answer your question Gokul.
Yes, thank you very much thanks.
Thank you, let's come back to the floor and see if there's any follow up questions from anyone.
Morgan Stanley Charlie.
Thanks for taking my follow up so first of all for first quarter and you mentioned that utilization rates are higher because of U.S. dollar friendly or go down slightly so what is the.
As he or common sense here. Thanks.
So Charlie is asking that we said first quarter the utilization rate will slightly increase but are you us in our guidance shows a slight decrease in the U.S. the and the revenue in terms of U.S. dollar. So why is that does Adam I mean is p. change.
Last year, SEC fourth quarter, or even third quarter last year.
Part of the wafer raising come from wafers prepared in the first core first half.
90, 90, when the utilization was pretty low and we're pretty much digesting all of those already okay.
So it looks like a [noise].
The year output or do you see any kind of fun and any nics data points for for example, or any segment or any customers cutting forecasts are orders recently can you comment on that.
No we do not see that okay and that is a very subtle right.
Capex I think a.
Three months ago, Inc. The guidance for this year kind of 14 too.
Kim.
And your stars but.
And now its acre site on being a your size higher so what they said or additional territories as many for seven nanometer effect manager.
Well other than the advanced technology. We also mentioned earlier, we also increased the Capex this year for specialty technology as well as a advanced packaging.
So those are the areas that we are focusing though.
And lastly, if I may I guess market share question [noise].
Appreciate that come in provide or are your assumption for industry grows.
I guess I first of all we wanted to clarify when you add or.
Korea captive foundry.
Comparison, you said, the Apple to Apple anchors and meaning do include that into a last years record pace.
I think would give right.
Yes, we did okay. So in truth, and Apple to Apple converse actually up 17% up 17%, Okay and there is two or.
China computers market share I think plus I think that's probably needs to correct.
Oh I don't think we include a foundry gross.
In last year, the Samsung captive supply.
Yeah. So the growth is 70%, particularly high.
So I was a kind of apple to Apple computers.
Thank you six six points.
So maybe 11, 11%.
Apple to Apple comprise okay, so based on that kind of 11%.
In the three girls I didn't get a lot of a.
Investors are asking what are your losing market share in China, because that's fine I want to push to locate Asia I. So Sanchez talking about SMI can take motors or from you guys at a 40 nanometer can you.
I also carlin readout on this front.
Usually we don't specifically is are these kind of read sensitive question specific on one competitor.
Well, let me tell you that the what the newspaper say these going up to.
Two.
[noise] alright clear thank you.
Trial. They also let me just clarify last time, we did not say that fit 14 to 15 for 2020 Capex. We said it will probably stay at a similar level as 2019, but weve not specifically say that dollar range I just to clarify all right. Let's go back to the line sorry, we have a follow up from.
As such in the D.
Yes. Thank you for the follow up one did go back to your commentary, but five GE phone and.
How should I think about opportunities if I were to think about the sub six versus millimeter wave and specifically do you think that this year and opportunities with.
Mobile you talked about a 20% more than 20% growth is they're all going to be sub six or is there going to be a mix of the two technologies.
I think okay. Yeah. Okay. The the question is creating now if the Fiveg course is up because of subjects or the beat me to waive my answer I suppose.
Okay.
That's you know the Fiveg is helpful and the base station is for subsea and that really meet away.
But do you have a second question Randy.
Yes, actually if I were to have a follow up do you think you would actually be building the millimeter wave full phone or.
Four millimeter wave is just gonna be limited to base station.
Okay or actually the phone it's much easier to view the we so when you eat away process subjects. The Beijing, probably why have much higher number you stop six rather than millimeter wave.
Okay. Okay. Thank you. Thank you all right, let's come back to the four we have follow up from a credit Suisse many of them.
Yes. Thank you you talked about the good investment in the backend Flasher I think you said 2.5 billion.
What's the revenue run rate in 2018, if you can maybe give a view the size of that business now and maybe what type of growth you're expecting for this year.
Hey.
[laughter].
Oh.
Yeah. The the revenue a size of backend was 2.8 billion in 2000 I can.
We're expecting.
Double digit growth for this year.
Thanks.
Okay, and if I could ask on the two whether its tokens much attention automotive and Aiotv I'm. So automotive was depressed last year, but I think you're talking about a pretty big pick up to grow teams.
Could you talk the areas like a richer cyclical rebound, where if there are certain types of product or components coming back or the automotive, where you're gaining content share and for the automotive refresh activity I or T was very strong growth.
It's a big categories for if you could maybe set around if there's a few particular pieces within the priority.
Driving the momentum for that category.
Yes.
Well I actually the course of this year some most come from the.
The content increase it rather than the unit increase go we I guess submission that he will be weekends right. We keep the increased certainly is not the mid teens unit. You you eat you don't expect though you know so many car being sold.
And so it's a content the semiconductor continues to increase more important than the unit.
And then Randy is also asking about four aisle key other specific areas or segment, that's driving the growth in multi well you know where overall yourself very popular now every everywhere.
And.
According to our chairman Lisa can also increase.
Yeah.
Okay. Thank you for that.
Next we have a follow up from Citigroup Roland Shu.
Yes, I love that are still Katy you, especially to set the now with the revenue will continue quotas 20 times. So do you still automobile.
Yes, so how much growth Dorothy IZEA. So a lot here, we have a penny strategy that is this a about to above the high level of tend to allow me to run the 30%.
Gross.
Okay. Thank you and other opposed to know me that do see any competitor will not be breakthrough and the likely to impair our pets in your market share in the near term.
Can you repeat the question sorry, yes, there or do you see any competitors with seven nanometer technology breakthrough and there were likely to Brett you I'll take your market share or.
Yeah, well continue to hold the Abry high market share as a whole casing.
And I don't come the amount my competitor.
Thank you.
Second question is that.
And do your customer and that our product portfolio and so you have new customers ER and the product about cryptocurrency impact in the last year you have Lisa no new TV and you also thing I'd be a new customer and technology. So how about you do any new customer on new application.
Well to contribute to your core thank you.
If this years a course counting on my customer is what the engaged you lost here already so I said, we continued to extend our product portfolio and we continue to increase.
The number of our customer.
So I think the content increase along with Fiveg penetration is the major phenomena.
Including the leading edge as well as the mature nodes.
And it's just us why spread of customers or existing customers.
Okay won't have a follow up here from say lets say Sebastian home.
Oh my.
My first follow up is we heard the the seven nanometer demand is very strong TSMC and most of the customers are on allocation both right now so with the another step out of Capex for this year.
Police some of the also.
Evolve into seven nanometer for this year do you still expect the similar type. This other your customer make spears on seven nanometer by the end of this year.
We do have very high demand reform.
Seven nanometer.
And we worked very hard to.
Lead customers that demand last year, we announced that we put a one point, but it even more to increase the seven nanometers, our capacity, we work hard to increase the capacity.
Yes.
Within a five nanometer ramp up in the second half of this year the tightness on seven nanometer hopefully in the Susan.
For the customers.
Okay.
And your are there any process nodes the TSMC seen not growing this year.
28 nanometer.
But what is already pretty low last year, but you're still seeing that not growing.
You said not grow you right yeah not Gordon.
Or so so even for 16 12. This platform TSMC also expanded to go up.
Okay. So that's why you say that the newspaper is wrong.
I don't want to saw specific okay or the three peer thank you.
All right in interest of time, we'll see if there's a any last questions.
From anybody.
If not then this concludes our company's session before we conclude today's conference. Please be advised that the replay of the conference will be accessible within four hours from now the transcript will be available from within 24 hours from now also one of which will be available to tier cities website, a triple W. dark SNC Dot Com then.
Before joining models today, we hope you'll join US again next quarter, the by happy New year and have a great day.