A few weeks ago, we told you about a problem in one of TSMC’s factories where tens of thousands of wafers were contaminated by the use of inferior materials. This forced the company to temporarily close the factory, resulting in delays of all sorts, which is very important as TSMC manufactures chips for companies such as Nvidia, MediaTek, Huawei and even Apple.
TSMC has sought to communicate the impact of these failures and announced that they have lost $550 million in wafers owing to a poor batch of photoresist material supplied by one of the company’s suppliers.
At this point, TSMC’s 12/16 nm wafers are believed to be affected by the defective materials affecting the Fab 14B wafers. It is not known which products were affected by these defective materials, but TSMC is known to use the 12nm process to develop Nvidia’s latest series of Turing graphics cards.
To ensure high product quality, TSMC had to dispose of more wafers than expected, although the company states that wafers disposed of in the first quarter will be billed in the second quarter. Fortunately, the manufacturer noted that demand in the first quarter was higher than expected and is estimated to have generated $230 million in additional revenue in the first quarter. This partially offsets the $550 million loss.
TSMC has revised its revenue guidance for the first quarter of 2019 and reduced its revenue forecast from $7.4 billion to $7.1 billion. The company’s gross margin is also being reduced by several percentage points.
TSMC is currently the world’s largest chip manufacturer, trusted by many leading PC companies such as AMD and Nvidia.