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Earlier this year, substandard chemicals forced Taiwan Semiconductor's Nanke 14 factory to shut down production after the company reportedly lost "tens of thousands of wafers." The production of cutting edge 16nm/12nm NVIDIA, MediaTek, and Huawei chips were reportedly affected by the incident, but TSMC didn't know the exact financial impact of the shutdown at the time. Now, Digitimes says "The incident is expected to reduce TSMC's first-quarter 2019 revenues by about US$550 million, gross margin by 2.6pp, operating margin by 3.2pp, and EPS by NT$0.42." The company also claims that the wafers scrapped in the first quarter "will be made up in following quarter," but the shutdown is still expected to impact their yearly financials as well.
TSMC said it discovered that a batch of photoresist from a chemical supplier contained a specific component which was abnormally treated, creating a foreign polymer in the photoresist that affected 12/16nm wafers at its Fab 14B. To ensure the quality of wafers delivered to customers, TSMC said they have decided to scrap a higher number of wafers than its earlier estimate... TSMC said it has maintained constant communication with customers affected by the incident, and has worked out replacement and delivery schedules with each of them.
TSMC said it discovered that a batch of photoresist from a chemical supplier contained a specific component which was abnormally treated, creating a foreign polymer in the photoresist that affected 12/16nm wafers at its Fab 14B. To ensure the quality of wafers delivered to customers, TSMC said they have decided to scrap a higher number of wafers than its earlier estimate... TSMC said it has maintained constant communication with customers affected by the incident, and has worked out replacement and delivery schedules with each of them.