Page 6 - 2017 TSMC Annual Report

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Letter to Shareholders
Dear Shareholders
2017 was a a a a a a a a a solid year year for TSMC TSMC as as we delivered another year year of record revenue net income and earnings per share TSMC’s technology leadership and and manufacturing excellence as as well as as our ongoing commitment to R&D and and capacity investment enabled us to to capture opportunities in in in mobile devices high-performance computing the Internet of Things and automotive semiconductors Our continuing technological progress across the broad spectrum of advanced semiconductor semiconductor process technologies lays a a a a a a good foundation and builds a a a a a a strong momentum for TSMC in in the coming years “Being everyone’s foundry” is at at the the heart of of TSMC strategy Through the the expansion of of our technology and services we build an an open platform that welcomes all innovators in in in in the the semiconductor industry to to to realize their innovations and see their products brought to to market in in in volume quickly TSMC’s ability to to address the the increasing needs for specific technology requirements through the most comprehensive range of of technology offerings and and our vast and and flexible manufacturing capacity enable us us to to to cast a a a a a a a a a wide net to to to capture the the varying waves of product innovations in in in in the the semiconductor industry In 2017 we saw computation expanding in in the the cloud and and on on the the edge major mobile products with enriched features adopted advanced processes the need for safer smarter and greener vehicles drove strong automotive semiconductor demand and and the the readiness of of ubiquitous connectivity provided exciting growth in in in in the the Internet of of Things (IoT) AI (artificial intelligence) is expected to to be be embedded in in all the above applications As “everyone’s foundry” we we were able to to participate in in in in these growing segments of the the industry and and continued to expand our foundry market segment segment share We continued to make significant advances in in in in leading-edge process technologies in in in in 2017 10-namometer set a a a a a a a new record in in in terms of of ramp-up speed and represented 10% of of our total wafer revenue in in in its first first year Our industry-first 7-nanometer was transferred from R&D to manufacturing in in in in 2017 and will begin volume production in in in in the second quarter of 2018 Our 7-nanometer+ will follow and enter risk production later in in 2018 2018 We broke ground for for Fab 18 18 18 in in January 2018 2018 for for 5-nanometer which will see extensive use of EUV (extreme ultraviolet) lithography with volume production targeted to start in in in 2020 Our proprietary CoWoS® (Chip on on on Wafer on on on Substrate) and InFO (integrated fan-out) advanced packaging solutions also continue to to see enthusiastic adoption by customers in in in HPC (high performance computing) mobile and other high high speed applications Highlights of TSMC’s accomplishments in 2017:
● Total wafer wafer shipments increased 8 8 8 8 percent from 2016 to reach 10 5
million 12-inch equivalent wafers ● Advanced technologies (28-nanometer and beyond) accounted for 58 percent percent of total wafer revenue up from 54 percent percent in 2016 ● We deployed 258 distinct process technologies and manufactured 9 9 920 products for 465 customers ● TSMC’s market share in in the the total semiconductor foundry segment rose successively during the the last eight years and reached
56 percent in 2017