Margesh Patel - Universe8 - Green - Shareholders Letter

Dear Stakeholders, • It is predicted that the highest growth potential is in fact in Asia.
Currently the market grows at 20% p.a., but long-term growth

prospects are hard to make.
I write this message with a sense of dignity about how strongly your • The market is quite polarized between high-spenders who always
Company performed in 8th year since inception, not just in the financial want to have the latest technologies and late adopters who are happy
term, but also in terms of what we accomplished for consumers, with their old devices.
employees, stakeholders and communities across the world. • But on average it seems that consumers are currently less responsive
In 2018-19, we continued to reap the benefits of correct strategic choices to new technologies and features than their counterparts in USA and
made over several years. Our record-high revenue and profitability led to Europe. Also, the average responsiveness to prices is higher than
significant growth in both net income and earnings per share. Our revenue elsewhere.
growth was mainly propelled by strong demand for our industry-leading
Tech market, and Appealing customer-driven designs were a vital success Outlook
factor. We anticipate continued growth in 2019 and beyond as strong Characteristic to high-tech companies, production is complicated,
demand for leading-edge technologies continues with better performance, and high costs are incurred in the beginning phases of the production of new
more efficient power consumption, and smaller device form factors. models. This, combined with short product life-cycles, forces the
We envision the race ahead as a relay in which our new technology companies to adapt the production process to manufacture a new product
development programs hand off the benefit of each node to the next, model as soon as possible, in pursuit of low costs. Eventually, as the
leveraging our knowledge and capacity to deliver optimal performance Company becomes more acquainted with a specific technology, production
for our customers and the best returns to our shareholders. Our success in cost per unit will fall with the learning curve effect.
the international cellular mobile telephone network has also laid the We are now utilizing the same strategy to ride the next wave of new
groundwork for our industry-leading. To ensure flexibility in R&D and evolutionary mobile devices–the Internet of Things. The Internet of Things
production, the companies have also actively negotiated agreements for not only drive a multitude of consumer devices connected to the network,
subcontracting parts of their production and R&D. but it will also drive continuously increasing data processing power on
We continue to increase our investments in R&D and capacity, as we various processors, in data centres, and many mobile devices. For example,
firmly believe these will sow the seeds for further harvests to come. Our exciting applications such as wearables, smart cars, smart homes, and smart
other achievements in 2018 include: cities are the major IoT applications which promise to make semiconductors
The overall trend is towards increased mobility with tested ubiquitous in our lives.
communication speeds of the 5G technology at 100 megabits per second Innovators are already hard at work designing a myriad of ways to
in metropolitan areas and improved support for device-to-device create a better life by linking objects all around us into an intelligent
communication. network. To turn their visions into reality, they need semiconductors with
processing power, connectivity, ultra-low power, various types of sensors,
Financial Performance and system-level integration, including advanced packaging. We have
Consolidated revenue totaled 3.1 billion USD, an increase of 59 percent made much progress in developing all of those necessary technologies to
over 2 billion in the previous financial year. Net income grew 21% this make TSMC a critical part of the IoT ecosystem. At the same time, we are
year to 666 million USD. Our primary focus was on reducing operating also investing in the capacity in both advanced and specialty technologies
costs, which lead to an EBIT margin of 31%. Moreover, our fiscal to supply the demand from this highly promising and still-evolving market.
discipline leads to Net profit margin (NPM) of 21%. We became an With our unwavering dedication to technology leadership, manufacturing
industry leader with ROCE of 30%. We posted the record-breaking EPS excellence, and customer trust, we believe we can serve as a vital supplier.
of 25.10. ROE stood at 43%. The opportunities ahead are enormous. By staying true to its
mission and its values, and by continually investing in building newer
Technological Developments capabilities, your Company is positioned well to become the foremost
Currently company operates in three markets – USA, Europe, and Asia partner of choice to all forward-thinking enterprises in their growth and
transformation journeys.
Market Development in USA On behalf of the Board of Directors of Green, I want to thank you
• USA is local market of Mobile and at the same time its largest market. for your continued trust, confidence, and support.
• The USA is generally known to be a leader in high-tech industries but
in the wireless sector the leadership is not that clear due to the multitude Ward Regards,
of different network technologies.
• Product features are currently less appreciated than in Europe, but Margesh Patel
advertising appears to have a good response. Chairman
• Demand grows steadily about 5-10%.
• With the introduction of new technologies, growth in demand may
show peaks of up to 15- 20% p.a.
Market Development in Europe
The companies have been exporting products to Europe for a couple of
years. Production facilities will not be established in Europe because of
the high labour costs. The market growth is about 10% p.a. and demand
is expected to grow steadily for several years to come. This market
appears to be the most responsive to product features currently.
Market Development in Asia

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Dear Stakeholders, • It is predicted that the highest growth potential is in fact in Asia.

Currently the market grows at 20% p.a., but long-term growth

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