Asking about priority between US and Taiwan markets for advanced nodes.
Annabelle Droulers
Wendell Huang
Expansion depends on customer demand. In the US, many customers want to go there, so we will expand there. But for leading-edge technologies, it will be in Taiwan due to heavy cooperation between R&D and operations for practical reasons.
Confirming that leading edge will continue to be led by Taiwan even with more US capacity.
Annabelle Droulers
Wendell Huang
Yes, that's for practical reasons.
Asking if it's possible to speed up the transfer of advanced tech from Taiwan to the US.
Annabelle Droulers
Wendell Huang
We can try to do that to shorten the gap.
Asking what the transfer gap looks like now and in the future.
Annabelle Droulers
Wendell Huang
We don't have a specific timeline, but we can try to accelerate that.
Could it be shortened to months?
Annabelle Droulers
Wendell Huang
It will be difficult, challenging.
So it stays at least one year behind then.
Annabelle Droulers
Asking how much of the $52-56B capex is going to the US.
Annabelle Droulers
Wendell Huang
We don't break down those numbers, but we tell people that in the next three years, the total capex is going to be significantly higher than the number in the past three years. That is evidence of our strong conviction in the AI megatrend.
Asking about potential collaboration with Intel on advanced packaging.
Annabelle Droulers
Wendell Huang
It depends if it makes sense to the customers and to our wafer business. Advanced packaging is strategic; it enables our wafer business. If there are more alternatives in the market which can enable our business, we can consider that.
Asking about the impact of a stronger Taiwan dollar on profitability.
Annabelle Droulers
Wendell Huang
Foreign exchange rate affects profitability. In the past, every percentage change affected margins by 40 basis points. Nowadays, with higher margins, the impact is less sensitive, about 30 basis points either way.
Asking about hedging strategies.
Annabelle Droulers
Wendell Huang
The easiest way is to sell US dollar into NT, but market impact must be considered. If we can't sell all, we will do forward contracts. If we still can't accommodate all positions, we will move US dollar to an offshore entity which has US dollar as its functional currency.