Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, is maintaining its sales guidance despite facing production disruptions caused by a recent earthquake in Taiwan.
Following the magnitude 7.2 earthquake that struck the country earlier in the week, TSMC reported that most of its equipment at fabs in Taiwan was back up and running by Friday. The chipmaker asserted that its sales revenue guidance for 2024, issued in January, remains unchanged, with a projected annual increase of 21-26 percent in U.S. dollar terms.
The earthquake prompted TSMC, along with other tech companies in Taiwan, to temporarily suspend operations and evacuate employees for safety measures and damage assessments. The company’s experience in earthquake response and disaster preparedness enabled it to swiftly recover operations, with over 70 percent of tools at its fabs restored within 10 hours.
While some production lines in areas more impacted by the earthquake faced delays, TSMC emphasized that equipment across its Taiwan fabs had largely recovered by April 5, thanks to collaborative efforts with suppliers. The company is conducting a thorough evaluation of the earthquake’s impact and maintaining communication with clients.
Despite initial concerns about potential supply chain disruptions, TSMC’s key client Nvidia Corp. expressed confidence in its manufacturing partners to mitigate any adverse effects. Analysts, however, projected a potential loss in sales revenue for TSMC in the second quarter due to operational disruptions affecting the production of high-end chips.
Investors are eagerly awaiting TSMC’s first-quarter results and updates on its efforts to expand advanced IC packaging capacity using Chip on Wafer on Substrate (CoWoS) technology. The chipmaker’s investment project in Chiayi County, focused on building two advanced IC packaging plants to meet rising demand for AI applications, also reflects its commitment to remaining at the forefront of technological innovation.
