Original link: https://www.latepost.com/news/dj_detail?id=1343
TSMC also began to cut investment
The market is accustomed to TSMC raising expectations and breaking the rules again and again. But this Thursday (October 13), those folks were disappointed. On its earnings call that day, TSMC told the world that it, too, would not be immune to the industry’s foreseeable weakness.
TSMC in the third quarterly report is still the world’s largest and most technologically advanced wafer fab, capturing the most profits in the industry. Their quarterly gross margin was a record 60.4%. The proportion of advanced technology (7nm and 5nm process) in total revenue further increased to 54% (previous value 51%), coupled with the depreciation of the New Taiwan dollar, which is conducive to exports, TSMC’s net profit in the third quarter increased by nearly 80%, reaching approximately 92.68 One hundred million U.S. dollars.
These achievements do not have much to say about the current TSMC. The market is more concerned with the change in revenue structure, as well as the capex guidance – here comes the disappointment.
The first is that TSMC’s 7nm process capacity utilization is declining. CEO Wei Zhejia blamed the simultaneous weakening of the PC and smartphone markets, and the delay in the production schedule of some customers’ products. “Customers gave very high expectations at the beginning of the year, and now the market is sluggish, and customers adjust their inventories.” Wei Zhejia told analysts.
To catch up with the delayed delivery of important equipment such as lithography machines, TSMC’s capital expenditure plan has been contracted. Wei Zhejia expects to invest about US$36 billion this year, a drop of 10% to 18% compared to the range of US$40 billion to 44 billion predicted at the beginning of the year.
The same is true of peers in the industry. Samsung Electronics, Intel Corp. and Micron Technology cut capital expenditures, while Applied Materials Inc. lowered its fourth-quarter revenue guidance. The Philadelphia Semiconductor Index, one of the most important gauges of industry sentiment, is down more than 40% this year, erasing all gains since September 2020. TSMC is like the last hope for the industry.
Although TSMC has not been spared the recession, their capital expenditures this year have grown by 19.84% ($30.04 billion) compared to last year, within the previously expected long-term compound growth range of 15% to 20%. Management is also confident of achieving a long-term gross margin of 53% or higher.
Continuing investment and maintaining technological leadership are the most important things for TSMC. When asked by an analyst whether such investment growth will continue after 2023, TSMC CFO Huang Renzhou used “capital intensity” to guide the market’s expectations (capital expenditure accounts for about 50% of revenue last year and this year).
“When we invest in order to capture future growth, the capital intensity will be as high as last year and this year. And vice versa. In the long run, a reasonable capital intensity may be 35%-39%.” Huang Renzhou said. He also used this to say no to buybacks, “cash on hand will be better spent on capital expenditures and better returns for shareholders.”
How new U.S. semiconductor export regulations affect TSMC is another topic of concern for analysts. Slightly unexpected is that Wei Zhejia said that the initial assessment will have a limited and controllable impact on TSMC. The Nanjing factory has been authorized for one year, and the production capacity of the 28-nanometer and 16-nanometer processes will not be affected. The situation will continue to be closely monitored to ensure full compliance with the rules and regulations.
“Every region is very important to TSMC. If I have to say, TSMC will continue to serve all customers around the world under the conditions of compliance with all regulations.” Wei Zhejia said. They began to investigate the location of overseas factories outside the United States, and did not rule out any possibility, but the final decision to build a factory depends on how high operational efficiency and benefits can be achieved. (Gong Fangyi)
Yen falls, Uniqlo gains
In the 12 months ending in August this year (fiscal year 2022), Fast Retailing Group, the parent company of Uniqlo, achieved a total revenue of 2.3 trillion yen (approximately RMB 112.5 billion), a year-on-year increase of 7.9%, and the gross profit margin for the fiscal year reached 2.3 trillion yen. 52.4%, a year-on-year increase of 2.1 percentage points.
The Uniqlo business is the core of the Fast Retailing Group. In fiscal 2022, it achieved about 1,118.7 billion yen in revenue (about 94.36 billion yuan), and overseas business, which accounts for 56%, is the core of Uniqlo.
In fiscal 2022, Uniqlo’s Greater China revenue increased by 1.2% (to 538.5 billion yen), while operating profit fell by 16.8%. Revenue in Southeast Asia, South Asia and Greater Asia increased 60%. Both North America and Europe recorded double-digit revenue and profit growth. The management said that the Greater China region, which accounts for half of overseas revenue, encountered considerable pressure this spring. Since the beginning of the summer, it has continued to repair, and revenue and profits have increased significantly.
The weak yen is good for exports, which helped Fast Retailing Group’s fiscal year profit increase by 61% year-on-year to a high of 273.3 billion yen (about 13.3 billion yuan). During the 2022 fiscal year, the yen depreciated 26% against the US dollar and 7.5% against the euro, and Fast Retailing recorded exchange gains and losses of about 114.3 billion yen (about 5.58 billion yuan).
However, Fast Retailing warned that the business environment is very severe, with rising inflation and the continued depreciation of the yen to increase additional procurement costs, and expects net profit in fiscal 2023 to drop by 15.9% year-on-year. (Gong Fangyi)
US core price index hits 40-year high
The US consumer price index excluding energy and food (core CPI) rose 6.6% in September (previously 6.3%), the largest increase since August 1982. Overall CPI rose 8.2% YoY in September (previously 8.3%).
It is rent that supports the core CPI to continue to rise, and the oil price that drives the overall CPI to slow down. Although the market had certain expectations of high inflation, when the data came out, the capital market, which was worried that the Fed raised interest rates to slow down inflation, sold stocks aggressively. The three major U.S. stock indexes opened 2% to 3% lower.
Interest rate hikes and interest rate cuts do not directly affect stock prices, but the financing development of listed companies, the interest rate determines the cost of borrowing money; the cost of consumer mortgages and car loans increases, and the willingness to consume decreases. One person’s expenditure is another person’s income, and the company’s income may decrease . In addition, rising interest rates will reduce the amount of money in the market, which is also bad for the stock market.
The Fed has used the fastest rate hike in 40 years to deal with the most violent inflation in 40 years, raising interest rates five times during the year, and the benchmark federal funds rate returned to the range of 3% to 3.25%. Last month, Fed Chairman Jerome Powell said the central bank would keep raising interest rates and keep them high until it was sure inflation was under control. (Gong Fangyi)
Daily rates for LNG carriers soar to $400,000
With the approach of winter, the superimposed Beixi No. 1 and No. 2 pipelines were damaged, and European countries rushed to transport natural gas, and the daily rent of LNG ships soared to about 400,000 US dollars.
Data show that since the conflict between Russia and Ukraine, the average daily rent of 174,000 cubic meters of LNG carriers has risen from about US$14,000 at the beginning of the year to about US$80,000 at the end of August. Analysts at Pareto said that as the gas hoarding continues, it is expected that the freight rate of LNG ships in the fourth quarter may exceed 1 million US dollars / day.
Previously, about 40% of the EU’s annual natural gas imports from Russia through pipelines are now turning to liquefied natural gas (LNG) imports from other regions to fill the gap. In the first eight months of this year, European demand for LNG rose by 65% year-on-year, the International Energy Agency said. Nearly 70% of US LNG exports in September went to Europe.
There are only two ways to transport natural gas over long distances through oil and gas pipelines and liquefaction. The transportation of LNG requires special LNG ships to be transported to the receiving station for unloading, and then gasified into natural gas. In order to ensure that natural gas is in a liquid state of minus 163 °C during transportation, and to prevent explosions caused by leakage, the construction of LNG ships requires extremely high technical requirements.
Since 2021, only China and South Korea have received new orders for LNG ships. In the first eight months of this year, among the 111 LNG carrier orders in the world, South Korean and Chinese manufacturers got 83 and 28 respectively.
Unlike container ships that were in recession before the epidemic, LNG was considered to be an important clean energy in the transformation of the global energy consumption structure, and its capacity has been increasing in recent years. According to statistics from Clarksons, from 2019 to 2021, the global LNG carrier new ship transaction volume will be 60, 53 and 86 respectively.
As of the end of June this year, a total of 696 LNG ships have been put into operation worldwide, of which about 80% are project ships with long-term leases of 15-20 years, which cannot be engaged in spot market transportation in the short term. Data shows that in the first nine months, 131 new LNG orders were signed, with a scale of 22 million cubic meters, and the orders in hand accounted for 43.4% of the fleet size.
The average delivery time for LNG carriers is 2-3 years. The global LNG fleet in early October increased by 8 vessels compared to the end of June. CITIC Futures said that the current LNG shipyard slipway has been scheduled until 2025, and if it does not expand production, the schedule may be until 2029. (Intern Zeng Xing)
OTHER NEWS
On October 13, Beijing added 12 new cases of local infection.
- On October 12, there were 322 new local confirmed cases and 1,154 asymptomatic infections.
- Beijing added 12 local confirmed cases and 6 asymptomatic infections.
- As of 15:00 on the 13th, there were 12 new cases of local infection in Beijing, 3 of which were found by social screening.
- In Shanghai, 3 new local confirmed cases and 44 local asymptomatic infections were added.
- On the 13th, there were 2 new cases of asymptomatic infection in the society.
- Guangdong added 36 local confirmed cases and 17 local asymptomatic infections.
- Dine-in food is suspended in Huadu District of Guangzhou, and primary and secondary schools and kindergartens are suspended from returning to school and offline teaching.
- Liaoning added 32 local confirmed cases and 19 asymptomatic infections.
- A total of 19 cases of positive infection were found in Shenyang, and there were 7 chains of transmission.
- Ningxia reported 9 new local confirmed cases and 49 asymptomatic infections.
- Xinjiang has added local “64+339”, mainly in Urumqi and Ili Prefecture.
Volkswagen and Horizon collaborate to develop autonomous driving solutions.
Volkswagen Group announced on October 13 that CARIAD, the group’s software company, will establish a joint venture company and hold a controlling stake in Horizon Corporation, and Volkswagen will invest about 2.4 billion euros for this. According to the press release, the two companies are working together to develop full-stack advanced driver assistance systems and autonomous driving solutions.
IKEA stores record sales in fiscal year.
IKEA International Holdings released its results for the fiscal year ended August this year on October 13. Together, they made about 44.6 billion euros in revenue (up 6.5% year-on-year) and received about 822 million customers (up 6% year-on-year). However, management cautioned that the company will inevitably be affected by complex times, including rising transportation and raw material costs.
After “breaking the net”, China Merchants Bank announced that “all operations and management are operating normally and operating performance is stable”.
On October 13, China Merchants Bank’s share price fell below its net assets per share, triggering market discussions. The company issued an announcement on the same day to stabilize market expectations, saying that “it will continue to maintain stable strategy, stable corporate governance mechanism, stable operation and management, and stable talent team. At present, China Merchants Bank’s various operations and management are operating normally and operating performance is stable.”
Zijin Mining acquired a 30% stake in China’s largest single gold mine for nearly 4 billion yuan.
On the evening of October 12, Zijin Mining announced that it would acquire a 30% stake in Shandong Haihai Gold Mine for 3.9845 billion yuan. The Haihai Gold Mine is located in the northern part of Laizhou City, Shandong Province. It is the largest single gold mine in China, with an identified gold resource of 562.37 tons. Zijin Mining said that the current project design mining scale is 12,000 tons per day, and the mining license has been obtained.
NASA has developed a solid-state battery with an energy density of 500Wh per kilogram.
Recently, NASA said that the energy density of the currently developed solid-state battery has reached 500Wh per kilogram, which is about twice the energy density of the Tesla 4680 lithium battery. Although technical research has not only made breakthroughs, but due to cost, production technology and environmental constraints, it is difficult to commercialize solid-state batteries in mass production.
For the fifth time, Luhan and the Black Panthers brokerage firm Fenghua Qiushi submitted to the Hong Kong Stock Exchange.
The Hong Kong Stock Exchange disclosed on October 12 that Fenghua Qiushi submitted a listing application to the main board of the Hong Kong Stock Exchange for the fifth time. The prospectus shows that most of the company’s revenue comes from the authorization of music works, with a revenue of 81.858 million yuan in 2021 and a net profit of 33.251 million yuan. In the first half of this year, the revenue was 42.239 million yuan, and the net profit was 833,000 yuan.
Qantas has returned to profitability and is expected to post a net profit of A$1.3 billion in the second half of the year.
On October 13, Qantas said strong demand was enough to offset higher fuel costs and expected a net profit of about A$1.3 billion in the second half of the year. In the past three years, Qantas has suffered a cumulative loss of about 7 billion Australian dollars due to the impact of the epidemic. It is expected that the group’s net debt will fall to between 3.2 billion and 3.4 billion Australian dollars by the end of this year.
Musk unveils ‘burnt hair’ scent that can be purchased with Dogecoin.
The Boring Company, a company owned by Musk, has launched a new Burnt Hair fragrance, which can be purchased with Dogecoin. Although the price is as high as 100 US dollars (about 716 yuan) and the smell is “burnt hair”, 10,000 bottles have been sold so far.
More than $3 billion in cryptocurrencies has been stolen this year.
Consulting firm Chainalysis said the cryptocurrency market suffered more than 125 total losses this year, resulting in losses worth more than $3 billion. The top ten losses include Ronin Network’s $540 million, Wormhole’s $325 million, and Nomad Bridge’s $190 million, among others.
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