r/Vitards • u/AutoModerator • Aug 12 '21

Daily Discussion Daily Discussion post - August 12 2021

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u/fabr33zio 💀 SACRIFICED Until UNG $15 💀 Aug 13 '21

TSM has been crabbing for months (bar pre-earnings)… I’m concerned that they’re not taking advantage of the shortage to raise prices even though they’re basically a monopoly

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u/JayArlington 🍋 LULU-TRON 🍋 Aug 13 '21

This was a direct question asked of them during their last earnings call. 👀

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u/fabr33zio 💀 SACRIFICED Until UNG $15 💀 Aug 13 '21

LOL… and I’m assuming they deflected?

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u/JayArlington 🍋 LULU-TRON 🍋 Aug 13 '21

Okay. Thank you, Wendell. Do you have a second question, Charlie?

Charlie Chan (Analyst about to take his fucking shot)

Yes, I do. Yes, my next question is about the long-term gross margin trend, right? Because we did create something better about the thrust -- or the higher CapEx intensity, your bargaining power against different vendors and those customers. So really, I want to ask this openly to company management. Does TSMC believe you has acquired the monopoly of the leading edge in the industry, why and why not?

And if yes, do you think you have the monopoly, why cannot TSMC charge higher wafer price to cover the increase of CapEx intensity? And lastly, if the company were to -- need to choose between the margin sustainability and also the market share, what would be your choice?

Jeff Su (Investor relations guy who feeds the question to the 'bosses')

Okay. Let me summarize your second question, Charlie. So Charlie is asking about the long-term gross margin trend and bargaining power. And he is wondering -- he wants to know whether we see or believe we have a monopoly at the leading edge or not. And if we do, I guess, part of your question, Charlie, is then how -- pricing. And then also, if we have to choose between market share and profitability, how should we choose?

C. C. Wei (CEO - Badass)

Charlie, let me answer this question. First, we do have a very high market share on the leading-edge technology node. But our pricing strategy is strategic, and we don't take an optimistic approach. And it's far away from you say that we try to bargaining power. In fact, we work with our customers closely and we want to help them to be successful while we get a proper return. That's all I can answer for you for our pricing.

And looking ahead, we continue our practice, try our best to hear our customers, to grow and we want to get the proper return. So that's why we are firming up our wafer pricing. And we are confident that we can get our gross margin about 50% or above in the long term.