TSMC production mishap to drag down Q1 sales by 2%: brokerage

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TAIPEI, Taiwan, Feb. 05, 2019 – 

A production problem in January caused by substandard raw materials will likely cost Taiwan Semiconductor Manufacturing Co. (TSMC) 1-2 percent of its sales in the first quarter, according to foreign brokerages.

An Asian brokerage said in a research note that the incident, which damaged more than 10,000 TSMC wafers, is expected to drag down the company's sales by 1-2 percent in the first quarter and affect its gross margin.

In a statement filed with the Taiwan Stock Exchange on Jan. 29, TSMC said the problem, which was identified on Jan. 19, resulted in low yields on wafers produced with the 12 nanometer and 16nm processes at TSMC's Fab 14B, a 12-inch wafer production site in Tainan.

An investigation found the problem to be caused by a batch of substandard photo-resistant materials, TSMC said, noting that the products were from "a well-performing" supplier with which the company has worked for years.

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