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© fouquin christophe dreamstime.com Components | February 18, 2016

TSMC details earthquake impact - updates 1Q guidance

TSMC updates first quarter 2016 guidance after further examination of the impact of the earthquake that struck southern Taiwan on February 6, 2016.
Although there was no structural or serious electric, water, and gases supply damage to the Company’s fabs in Tainan (Fab 6, Fab 14A and Fab 14B), the damage to wafers in progress was greater than the company's initial assessment announced on the day of the earthquake. In addition, the equipment recovery in Fab 14A, and to a lesser extent Fab 6, would take longer than the initial estimate.

After factoring in insurance claims, the Company now expects first quarter gross profit margin to be between 44% and 46%, up from it's previous estimate of 47% to 49%. Operating profit margin is expected to be between 33.5% and 35.5%, down from the company's previous estimate of 36.5% to 3.85%.

"Consequently, TSMC has devoted maximum resources to make up for all the impacted wafers. Nevertheless, we still expect to see wafer delivery delays in the first quarter. More precisely, for Fab 14A, the wafer delivery will be delayed by 10 to 50 days, and delivery of about 100K (12-inch) wafers will be delayed from 1Q to 2Q. For Fab 6, the wafer delivery delay is 5 to 20 days, with 20K (8-inch) wafers delayed to 2Q. For Fab 14B, the delivery delay is negligible. All other fabs located in Hsinchu and Taichung Science Parks are unaffected," the company writes in a statement.

The Company now expects first quarter revenue to be between NTD 201 billion to NTD 203 billion (USD 6.04 billion to USD 6.10 billion), up from NTD 198 - 201 billion.
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