Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said revenue for this quarter would be near the lower end of its guidance due to a magnitude 6.4 earthquake on the Richter scale that struck southern Taiwan last month.
The quake, which struck the southeastern part of Chaiyi County on Jan. 21, is estimated to cause TSMC losses of about NT$5.3 billion (US$161.4 million) in the first quarter, TSMC said in a statement.
However, the world’s largest contract chipmaker said its gross margin and operating margin forecasts in the quarter remain unchanged, as well as its full-year business outlook.
Photo: CNA
TSMC said the earthquake, along with several significant aftershocks throughout the Lunar New Year holiday, did not cause any structural damage to its fabs.
Water supply, power transmission, workplace safety systems and the company’s facility operations continue to function normally, it said.
However, a certain number of wafers in process were impacted and had to be scrapped due to the earthquake and aftershocks, TSMC said, without disclosing the exact numbers.
As the quake affected TSMC fabs at the Southern Taiwan Science Park (南部科學園區), which is a major site for producing advanced 3-nanometer and 5-nanometer process chips, the company experienced greater damage than the losses of NT$3 billion it incurred from the magnitude 7.2 earthquake on the Richter scale that struck in April last year.
TSMC yesterday said it expects revenue for the first quarter to be closer to the lower end of its US$25 billion to US$25.8 billion guidance made at an earnings conference on Jan. 16.
Its gross margin is forecast to stay unchanged at between 57 percent and 59 percent, and its operating margin remains between 46.5 percent and 48.5 percent, it said.
“The company is making every effort to recover the lost production, and there is no change to our full-year outlook,” TSMC said.
At last month’s earnings conference, TSMC projected revenue for this year to grow in the mid-20s compared with the year before, citing strong artificial intelligence (AI) and recovering non-AI demand, which would outpace the overall foundry industry’s 10 percent annual growth, it said.
TSMC’s remarks on the quake’s impact came as the company yesterday also reported that its consolidated revenue for last month reached NT$293.29 billion, an increase of 5.4 percent from the previous month and up 35.9 percent from a year earlier.
Last month’s revenue was the second-highest monthly sales in the company’s history, after the NT$314.24 billion it registered in October last year, TSMC data showed.
Shares in TSMC fell 1.78 percent in Taipei trading yesterday after its US depositary receipts fell 2.08 percent on Friday in New York, as the stock faces pressure from US President Donald Trump’s threats to slap tariffs on semiconductor imports.
The company is scheduled to hold a board meeting in Arizona this week, the first in TSMC’s 37-year history, and the market is speculating whether it would make any announcements to appease Trump.
Hon Hai Precision Industry Co (鴻海精密) yesterday said that its research institute has launched its first advanced artificial intelligence (AI) large language model (LLM) using traditional Chinese, with technology assistance from Nvidia Corp. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), said the LLM, FoxBrain, is expected to improve its data analysis capabilities for smart manufacturing, and electric vehicle and smart city development. An LLM is a type of AI trained on vast amounts of text data and uses deep learning techniques, particularly neural networks, to process and generate language. They are essential for building and improving AI-powered servers. Nvidia provided assistance
DOMESTIC SUPPLY: The probe comes as Donald Trump has called for the repeal of the US$52.7 billion CHIPS and Science Act, which the US Congress passed in 2022 The Office of the US Trade Representative is to hold a hearing tomorrow into older Chinese-made “legacy” semiconductors that could heap more US tariffs on chips from China that power everyday goods from cars to washing machines to telecoms equipment. The probe, which began during former US president Joe Biden’s tenure in December last year, aims to protect US and other semiconductor producers from China’s massive state-driven buildup of domestic chip supply. A 50 percent US tariff on Chinese semiconductors began on Jan. 1. Legacy chips use older manufacturing processes introduced more than a decade ago and are often far simpler than
STILL HOPEFUL: Delayed payment of NT$5.35 billion from an Indian server client sent its earnings plunging last year, but the firm expects a gradual pickup ahead Asustek Computer Inc (華碩), the world’s No. 5 PC vendor, yesterday reported an 87 percent slump in net profit for last year, dragged by a massive overdue payment from an Indian cloud service provider. The Indian customer has delayed payment totaling NT$5.35 billion (US$162.7 million), Asustek chief financial officer Nick Wu (吳長榮) told an online earnings conference. Asustek shipped servers to India between April and June last year. The customer told Asustek that it is launching multiple fundraising projects and expected to repay the debt in the short term, Wu said. The Indian customer accounted for less than 10 percent to Asustek’s
Gasoline and diesel prices this week are to decrease NT$0.5 and NT$1 per liter respectively as international crude prices continued to fall last week, CPC Corp, Taiwan (CPC, 台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. Effective today, gasoline prices at CPC and Formosa stations are to decrease to NT$29.2, NT$30.7 and NT$32.7 per liter for 92, 95 and 98-octane unleaded gasoline respectively, while premium diesel is to cost NT$27.9 per liter at CPC stations and NT$27.7 at Formosa pumps, the companies said in separate statements. Global crude oil prices dropped last week after the eight OPEC+ members said they would
RSS