Related to that, what strategies, if any, can customers use to reduce their dependency on TSMC? What can they do?

We're always evaluating new foundries. Even if Intel or others aren't executing well, just considering them brings theatrics to procurement. For example, when TSMC visited Qualcomm, I made sure they saw Samsung and Intel sales teams in the lobby. This way, they could see each other and be checked in one at a time. Such tactics encourage them to talk about what they observed. TSMC is so hyper-aware that it sometimes works against them.

Regarding pricing itself, we discussed this. It's not among the first couple of things that matter, but in the end, especially at the mature nodes, pricing matters more because there's more competition to choose from. Could you explain how TSMC's pricing power has evolved over time and across the nodes? This has obviously evolved a lot.

We also meet quarterly because the key term is "not to exceed," meaning we hope to do better. We generally assume a 2% takedown rate per quarter for planning, but we aim to improve on that. Looking at market pricing now, for older technologies like 28 nanometer and higher, wafer prices are clearly below $3,000. For 12 to 16 nanometer, it's around $4,000, 7 nanometer wafers are around $9,000, and a 5 nanometer wafer is probably around $17,000. As we move down the nodes, wafer pricing doesn't increase linearly.

Regarding pricing itself, we discussed this. It's not among the first couple of things that matter, but in the end, especially at the mature nodes, pricing matters more because there's more competition to choose from. Could you explain how TSMC's pricing power has evolved over time and across the nodes? This has obviously evolved a lot.

In older nodes, the fabs are almost fully depreciated, meaning a higher percentage of the cost is variable. There's more leverage for these older fabs. TSMC, if they want load there, must either get more aggressive on pricing or use the bundle strategy. TSMC's financials show a gross margin around 50% or better. They likely make 70% on 5 nanometer and 7 nanometer, and 30% on older technologies, trying to smooth it out. Knowing TSMC's costs at older technology nodes, I don't think they would go below a 30% margin on any business, except in rare cases, to avoid setting a precedent.