Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the sole chip supplier for Apple Inc’s iPhones, yesterday trimmed its financial forecast for this quarter as a manufacturing incident last month is expected to erode about US$550 million of its revenue.
“TSMC discovered that a batch of photoresist from a chemical supplier contained a specific component that was abnormally treated, creating a foreign polymer in the photoresist,” TSMC said in a statement.
“The foreign polymer created an undesirable effect on the 12-nanometer and 16-nanometer wafers at Fab 14B. This effect was detected later on, when the wafers deviated from normal yield,” the firm said.
It would increase certain production in the second quarter and has seen some increase in demand, which should result in about US$230 million of additional revenue this quarter, TSMC said.
As a result, first-quarter revenue would reduce to between US$7 billion and US$7.1 billion, compared with the firm’s previous estimate of between US$7.3 billion and US$7.4 billion, TSMC said.
Gross margin would drop to 41 to 43 percent, compared with the estimate of 43 to 45 percent it made last month, the company said.
Operating margin would fall to 29 to 31 percent, compared with its earlier estimate of 21 to 33 percent, it said.
The downward revision would result in its earnings per share dropping by NT$0.42 this quarter, TSMC said.
For the whole of this year, the incident would reduce its gross margin by 0.2 percentage points, its operating margin by 0.2 percentage points and its earnings per share by NT$0.08, it said.
TSMC reported that revenue last month fell 13 percent to NT$78.09 billion (US$2.53 billion) from NT$89.83 billion in December last year, the lowest recorded in six months.
On an annual basis, revenue contracted 2.1 percent from NT$79.74 billion.
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