Claire Chen: I would like to invite you all to participate in the World's Upcoming 2025 World's 4th Online Business Report and 100-person briefing. The company management team for today's meeting includes Chairman and Strategy Director Lu Fangyue, General Manager Jiang Weijishi, Global Business and Planning Vice General Manager Claire Chen, and Finance Vice General Manager and Finance Director Amanda Huang-Huilan. I would like to inform you of today's agenda. First of all, we would like to ask Ms. Wang Hui-lan, Vice General Manager, to report on the financial results of the fourth quarter of 2025. Then, Dr. Chen Zhijun, Global Business and Planning Vice General Manager, will explain to you the changes in revenue and product combination of the fourth quarter of 2025. Then, Dr. Wei Jishi, General Manager, In the beginning of today's report, I would like to remind everyone that There are certain risks and uncertainties in the forecast. Please participate in our statement. Next, we would like to invite the Minister of Finance to give you the results of the fourth quarter of the company in 2025. Dear investors and media friends, good afternoon. Here are the results of the fourth quarter of the world's capital in 2025. The company's business income in the fourth quarter is 1,259,400 million yuan. which is equivalent to 174,800,000 yuan per share of the company. The total profit per share is 0.93 new Taiwan dollars. By the end of 2025, the company's cash and related financial assets will be 4171,600,000 yuan, which is equivalent to 6387,700,000 yuan per share of the company. As for the amount of goods, due to seasonal demand reduction and supply chain shortage adjustment, In the fourth quarter of 2025, the export volume was 626,000 pieces of 8-inch gold. Compared to the 673,000 pieces of 8-inch gold in the third quarter, the export volume was reduced by about 7%. Compared to the same period last year, the export volume was increased by 13%. Next, let's look at the report for the fourth quarter of 2025. In the fourth quarter, the annual income was NT$125.94 billion. Comparing with the third quarter's $123.49 billion, the sales have increased by about 2%. The main quarter's average sales price has increased by 5%. The new Taiwan dollar's average exchange rate has decreased by about 4%. Part of it has been reduced by about 7% due to the reduction in the amount of cash exports. Comparing with the fourth quarter's $115.53 billion in 2024, the sales have increased by about 9%. As for the interest rate, Due to strong interest rates and product combinations, part of the production efficiency has decreased. The earthquake that occurred on December 27th caused a loss of production and reduced production cost. The net profit increased by 0.7% to 27.5%. In terms of operating expenses, operating expenses increased by 12% to 16.58 billion yuan. After deducting 13.2% of the operating fee, the operating profit was reduced by 0.5% to 14.3%. The net operating income of the fourth quarter was about $288 million, mainly in return for interest income. The tax rate was about 20%. Therefore, the net profit of the parent company was $174,800, and the net profit per share was $0.93. Compared with the third quarter and the same year, the share of 0.91 yuan and 1.03 yuan per share increased by 2.2% respectively, which is 9.7% per year. Next, let's look at the whole-year stock market in 2025. In 2025, the world's net profit was NT$485.9 billion, which is about 10.3% compared to 2024. The main factor is the 15% year-on-year supply of gold. Part of it is due to the increase in the annual exchange rate of NTD$3 per dollar, and the reduction in the relative long-term contract revenue and sales. In terms of the profit and loss ratio, due to the 63% and even 74% use rate of production, and the strong product combination, part of it is due to the decrease in the sales price, and the disadvantageous exchange rate factors, and the increase in production cost. the annual interest rate increased by 1% to 28.1%. In terms of operating expenses, the higher operating expenses, such as wages and bonuses, and 12-inch new factories, made the operating expenses increase by 10.9% to 58.8 million yuan. After reducing the operating expenses by 12.1%, the annual interest rate decreased by 0.1% to 16%. In 2025, the net profit will be about 14.77 billion yuan, mainly in response to interest income. After deducting about 16% of the tax revenue, the net profit of the parent company will be 79.8 billion yuan, and the net profit per share will be 4.22 yuan. Compared to last year's 4.16 yuan per share, it will be 1.4% per year. As for the part of asset depreciation, until the end of 2025, The company's total assets amounted to NT$204.69 billion. In the previous quarter, the total assets amounted to NT$301.62 billion. In the current quarter, the total assets amounted to NT$90.22 billion. The total assets amounted to NT$417.16 billion. In the current quarter, the total assets amounted to NT$4.74 billion. The total assets amounted to NT$67.48 billion. In the current quarter, the total assets amounted to NT$6.4 billion. The total assets amounted to NT$69.37 billion. In terms of liabilities and rights, the liabilities are 5,164,000,000. The non-liabilities are 652,755,000,000. In terms of the rights of the company, the liabilities are 6,387,700,000. The non-control rights are 197,133,000,000. The total rights are 8,359,000,000. In terms of financial indicators, the income of the company is 49,000,000. and the number of shipments increased from 2,000 to 69,000. Finally, let's look at the cash flow chart. In the fourth quarter, the total cash flow of the world's cash flows from business activities was 769,200,000 yuan, which is less than 173,000,000 yuan in the previous quarter. This is mainly due to the fact that the company and the fourth quarter received fewer customers, more revenue, and more accounts than the fourth quarter. The capital expenditure of the fourth quarter was 28.23 billion yuan, Thank you, Mr. Tai. Next, Mr. Tan will explain the changes in the sales and product combination of the company in 2025. Hello, ladies and gentlemen. I am Claire. Next, I will explain the changes in the revenue and product combination of the company in the first quarter of 2015. First of all, due to the positive product combination, the revenue and product combination of the company increased by an average of $3 billion. and the effect of the new Taiwan currency on the U.S. dollar in the fourth quarter of 2025 will reduce the demand for retail customers and reduce the impact of the decline in the amount of capital exports. In the fourth quarter of 2025, the annual income of the world will increase by about 2% and become NT$1,259,400,000. Compared to the same period in 2024, the annual income will increase by about 9%. In terms of the interest rate, Due to the strong exchange rate and the effect of the product combination, some were reduced by the use rate of the production capacity, the loss of the earthquake, and the reduction of the higher production cost. The interest rate increased by 0.7%, and the annual reduction by about 1.2% to 27.5%. Next, let's take a look at the changes in the product combination of companies. In the fourth quarter of 2025, Although customers' demand for power management products in the field of car use, control, computers, and chargers continues to increase, the demand for face-to-face drive ICs has been further reduced. Therefore, the ratio of 0.18 microns to the overall revenue has been reduced by 2% to 61%. and 0.25 microns, 0.35 microns, and 0.5 microns in total revenue are 3% respectively. In the change of the product combination of old platforms to official companies, in the fourth quarter of 2025, customers have increased the number of products Thank you, Mr. Wu. Next, I would like to ask the Director-General to explain the results of the fourth quarter of the company's business in 2025. Okay. Ladies and gentlemen, good afternoon. I am John.
Jiang Weijishi: Next, I would like to explain the results of the fourth quarter of the company's business in 2025. And based on the current forecast for operations, I would like to mention the results of the first quarter of the company's business in 2026. First of all, we see the change in the revenue of the company. Due to the change in customer season needs, and the storage adjustment of supply chain at the end of the year, the world's advanced cash export volume has decreased by about 7%. On the other hand, the average sales unit price of products based on the dollar is increased by 5% compared to the last quarter. The profit margin is increased by 5% and product combination and sale price. Part of it was reduced by the use rate of production, earthquake loss, and higher production costs, and 0.7% of it became 27.5%. These are the results of the business outlook proposed by the government and the company in early November in the year 2025. Next, 我將基於目前對營運的預期提出世界先進2026年第一季的營運展望。 由於客戶提前與前一季需求減緩並進行庫存調整, 因此在新台幣平均匯率31.3元對1美元的假設之下, 公司預估晶圓出貨量將激增約1%到3%。 Waiver shipment to increase by 1% to 3%. 产品平均销售单价将计减3%到5%之间. Blended ASB to decrease by 3% to 5% quarter of quarter. 而毛利率将约介于28%到30%之间。 gross profit margin to be between 28% and 30%. 在Q&A开始之前,我将先向各位就产能、资本支出计划、订单能见度、产品组合及折旧费用等几个问题做简短的报告。 首先说明产能的规划。 Although the global economy and the political and economic situation are changing, in order to meet the long-term stable growth of customers, 8-inch thin-line wide production product supply demand, the World Economic Forum's 2026 plan will eliminate and upgrade some existing thin-line wide production to thin-line wide production. Therefore, the estimated company's production capacity in 2026 is about 3.36 million pieces of 8-inch gold. The annual reduction is about 4%. The production capacity in the first quarter of 2026 will be reduced due to part of the gold field. In the short term, the annual product combination change will reduce by 9% to 266,000 pieces of 8-inch gold. In terms of capital expenditure, the company will plan to conduct a product verification of the 12-inch gold factory BSMC in Singapore in 2026, and it is expected to start production in 2027 at the end of 2026. to provide long-term and stable mature self-sufficiency. In conclusion, in 2025, the amount of capital spent on cash payment will be NT$6.4 billion. The estimated amount of NT$6.5 billion to NT$7.5 billion is slightly lower, mainly because part of the purchase, order, and payment conditions are better than expected. In 2026, the company will continue to actively invest to meet the needs of long-term customers. In addition to the expansion and replacement of the existing 8-inch gold and silver production line, it will continue to invest in 12-inch gold and silver equipment. Therefore, the estimated capital expenditure will be equivalent to NT$600 to NT$700 billion in 2025. 85% of which will be used for VSMC factory construction and equipment expenditure. The remaining 15% will be used for other 8-inch factory area annual routine maintenance, capacity and equipment optimization expenditure. In terms of order visibility, in terms of order visibility, because of the adjustment of storage at the end of the year, customers maintain stable supply and demand in this season. This means that the order capacity of the company is currently around three months. However, due to the impact of the year-end product combination changes in part of the gold and silver industry, tax, and short-term months, we expect that the first quarter of the first quarter of 2026 will be 75% more growth than the previous quarter, about 80% to 85% growth. With the change in the product combination of the company, along with the demand for middle-end applications such as TV, e-paper, and packaging and packaging, the demand for panel drive IEC customers has gradually recovered from this season. In addition, the application of power supply management products related to service devices has continued to increase. Therefore, we expect that the revenue ratio of 0.25 microns will be increased. If we look at it from the platform, the revenue ratio of all types of products in the first quarter of 2026 will be about the same as that of the fourth quarter of 2025. Finally, in terms of the amount of relief, the total amount of relief in 2025 is 85.5 billion yuan. Thank you, Mr. President.
Claire Chen: 好的,提问时间现在开始,如果您需要提问,
Conference Operator: We are now open for Q&A on the line. If you would like to ask a question, please press star key and number one on your telephone keypad. Thank you.
Investor Relations Director: 我前第一位提问的是UPS,Sunny Lin,请提问。 感谢董事长,管理层午安。 那我第一个问题想要请教一下就是这个Blood and AFT的guidance在第一季是下滑3到5个percent季对季嘛, 那可不可以跟我们多说一下就是这个里面的影响包含可能life of life价格的变化, 产品组合,那是不是还有一些一次性就是可能长约到期对Blood and AFT的影响?
Claire Chen: Tony, let me answer your question first. In the first quarter, we expected the price to decrease by 3% to 5%. The main reason is still the product combination. In the first quarter, we expected the PVE paper in the middle to be out of stock, so we expect the demand for EDIC to increase in the quarter. In addition, we also have our own large-scale change in the power management IC product category. This is the main reason why we reduced the ASP. In addition, there is a part of the LTA contract. Our LTA contract has been signed with many clients since 2021. At the beginning of this year, part of the contracts will continue to expire, so this part will also have an impact on our pricing. For the whole year, it is a low-to-mid single-digit budget. It should be an impact on low-to-mid single-digit. For like-for-like prices, I will see if our Chairman will talk to you about these views on SP.
Investor Relations Director: 好,感謝。 對,那所以,Buzz財務長我現在很快clarify一下, 就是這個LTA到期對今年平均單價的影響, life-to-life basis, 就是大概會有個low single-digit多的影響, 但是這個是全年就是慢慢會有這樣的影響, 不是BG完全反應。 對,全年,整個年看起來就是一個low single-digit的影響, 然後影響稍微少一點。 Okay.
Lu Fangyue: Okay. the demand for semiconductors has increased dramatically. In this situation, in addition to commercial, industrial, and car semiconductors, the inventory correction has gradually become quite healthy. In this situation, This is for the mature process. First of all, its productivity is also slightly excluded to a certain extent. So what we see in this mature process is that the demand is quite strong. Our company is also probably in this wave. Because of our early layout in this AI server and data center, in SPS, our penetration has also been very good. So we are also facing a situation of public demand. In terms of price, because our company is still holding on to the client table, its product to the world's advanced production line, when there is In terms of production opportunities, of course, we must try our best to support them. So in this situation, you can see that from the past to the present, including in 2026, we are still investing heavily in our production line. In this situation, our cost cannot be avoided, and it needs to be increased. 那我们秉持着我们的信念呢,大概会跟客户一起work, 来一起在这个supply chain上做一个比较有价值的一个销售跟管理。 所以目前pricing呢,我想应该至少都是firm and depend on我们一起work out一些比较好的一些scenario。 这个大概是我们现在 对2026年这样一个背景跟景气的情况下 在销售价格的话 我们会跟客户一起work out 一个win-win的situation 了解 非常谢谢董事长的分享 我可以多请教一下 因为其实大家还是比较关心 就是今年这个Life for Life的价格的变化 那所以刚才
Investor Relations Director: We are working on it.
Lu Fangyue: We hope to meet the demand of the market in the past. Demand. 然后我们需要投资来support。 我们过去的经验是客户一般都是 会跟我们work out一些比较好的一个win-win situation。 了解。 好,那我再把握机会再多请教一个问题, 然后待会就回去排队。 那一个问题就是说,
Investor Relations Director: 我们怎么去想这个部分的synergy?
Lu Fangyue: Because you specifically identified a client company, then I think it's not very convenient to do a lot of elaboration without authorization. But it's true that the industry knows that it's our very important so-called... 我们的新加坡厂
Investor Relations Director: Can you please share with us the management process? Because we are going into mass production in a year. So in the first and second wave of 2017 and 2018, what kind of products will we deploy? Do we have a chance to help Foundry to do Silicon Interposer?
Lu Fangyue: Okay, I will probably do a general introduction. Singapore VSMC 12-inch factory status. I think this is something that everyone is very concerned about. I will take this opportunity to report to everyone. At present, our Singapore 12-inch project schedule is on track. Or strictly speaking, it is even ahead of our expected schedule. 那目前呢,在短短的过去的三四个月内呢,我们按照schedule已经moving了第一批的这个pilot line所需要的所有的机材超过200多台。 那么有600个trained好的工程师work very hard在做这个tool的installation和process the setup。 预期大概会在这个 In June and July of 2026, we should be able to deliver our first batch of samples. Before the end of the year, we hope that all the samples will be qualified. Then in Q1 of 2027, we will enter mass production. While entering mass production, we are also very... So this is currently our uh... uh... 在2027年Q1就能够进入量产。 Of course, we hope we can pull in a little bit too. 这是目前的12寸的进展。 没问题,非常谢谢董事长,很有帮助。 谢谢。 下一位提问的是Morgan Stanley, Charlie Chen,请提问。 董立成,下午好。
Charlie Chen: First of all, I'm curious about your AI exposure. Can you tell us about the real AI power in PowerIC, or is it related to AI? I also don't know if this kind of AI can be converted from consumer PMIC to AI-shared PowerIC. Is it easier? Because you just mentioned that AI Data Center PowerIC has announced its situation. I don't know if Vanguard is flexible enough to meet customer needs. Thank you.
Claire Chen: I would like to answer your first question, which is, in terms of power IT, what is the difference between power and PMS in terms of AI? What we are doing now is, in the field of AI, especially high current and high power, The voltage is relatively low, and the volume is relatively large. There are BCD Power ID drivers and a large number of high current MOSFETs. These are our main AI products. Of course, the high current part, 100 V, is also available. It's mainly in SPSN. But a lot of it is still power supply to the CPU, GPU, system chip, the low voltage part, the 12 V part. Then you just asked about the power IC with consumer. In fact, the power IC of consumer also uses VCD. So, in this place, the production platform is actually the same platform, but it is in a group with different voltage. So, in other words, it is still a more capable use, or it is still the same type. The main difference is only the IT part and the discrete part.
Charlie Chen: Okay, thank you. Another question is, whether it is Singapore's 12-inch factory or Taiwan's factory, do you need to buying this TSV device because like some products, it needs to be made into a thin-walled port. In addition, in terms of power management, I saw that there is also a problem with the power supply. I don't know if Vanguard is currently capable or if they are going to do this type of service.
Jiang Weijishi: 我们不是很方便谈我们在新加坡做哪些产品 不过就是我可以告诉你 我们已经在新加坡进了200多台机器 现在都在 OK, good.
Charlie Chen: Lastly, I would like to ask if everyone is still concerned about the demand for consumers. Maybe the price of memory is one of the reasons. I don't know if it's because of Vanguard, This is socialization in market, 不管是 PC, smartphone, TV 的话, 有没有一个全面的一个, 一个市面的一个 forecast, 就是说 in market 的 forecast, 以及 Venga 全面的一个 forecast.
Claire Chen: 我们现在在产品类别上面, 就是说如果是在 computing, 您刚提到就跟这个, The impact of DRAM is usually on the computer, including the DCR notebook, right? Yes. But from our current overall demand, because of the increase in power, the entire silicon content is still growing. So overall, 我们目前看到的我们整个全年度的 forecast 看起来在这方面 整体的那个 wave 需求量 仍旧还是是 目前看到还是是一个成长的情况 那像比如说 TV 的这些什么 no good die 这个可能不是那么的问题 这是根本就缺货嘛 这会影响到你们的 EDIC 的需求 您说的是 TV 吗 电视 对对对 那是大储存,你们已经没做了。 那个大储存呢,就在我们还是我们的DDIC这边的主流,主要产品。 那TV的部分相较于PC Notebook这边,TV是属于消费性产品嘛。 那去年第一季其实还是有一些,因为今年的年中间,六七月六月份的时候会有一些, That's right. Compared to PC, Notebook, and AI, consumer products are a little weaker.
Charlie Chen: If I go back a year, do you think consumer, PC, and smartphone companies are being offset by your new business? That is to say, Will our general products have an under-supply phenomenon in a year? Let me answer this.
Jiang Weijishi: Of course, we are all paying attention to the memory shortage. Some opinions in the industry today are that notebook PCs may be 5% to 10% lower than the original expected demand. Smartphones may be 1% to 2%. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay. Okay.
Charlie Chen: Okay. At least, I'm pretty sure about SMIC. They... Asun is really not in demand, but they clearly said that prices will rise. Huahong's rise may also be another factor. I remember last quarter, we discussed that the mainland foundries may have dropped more before. So it's a bit of a mean reversion. But overall, China foundries are actually rising in the short term. But... Vanguard seems to be more conservative. You said a firm's pricing. It feels like it's not moving at all. Can you explain the difference in the middle?
Lu Fangyue: The pricing firm I just mentioned and working with our customers to work together on the supply chain. Currently, the pricing firm is for sure. But we think if we want to Okay, so it's a little bit more careful, but...
Charlie Chen: Or will there be a possibility of price adjustment?
Lu Fangyue: Because we, as I have already said, when our customer needs are developed to our home, when they encounter business opportunities, when they can grow, of course it is our responsibility to support them as much as possible. But under this premise, there must be more industry, more investment. This is from the past few years, this is our usual way to deal with this, Thank you. Thank you.
Claire Chen: If you need a question, please press the rice button and the number 1 on your phone. Thank you. Because there are a lot of questions on the line, we will start to reply to those questions. If there are any questions on the line, we will reply to them. Let's start with... The first question is about the recent release of Compound Saving and some of our strategic partners. So investors want to know about the development progress of Compound Saving, for example, like GDN Nitro and Seekon Carbide, or the progress of cooperation with partners and revenue contributions.
Jiang Weijishi: Okay, let me answer this question. We are very optimistic about the market on Gannem Nitrite. Especially in the future, the data center and the vehicle market will have the status of the consumer. So we want to make our portfolio more complete on Gannem Nitrite. 我们原来有的是Ganon QST 那这个technology非常robust 我们大概
