After releasing its first quarter financial results on April 18, TSMC issued another important news release later in the evening to explain the impact of the April 3 earthquake.
TSMC's preliminary estimate of earthquake-related losses after deducting insurance compensations is approximately NT$3 billion (US$92 million). It will be recognized in the second quarter.
TSMC noted that within 10 hours of the April 3 earthquake, the recovery rate of fab equipment exceeded 70%. The recovery rate of newly built fabs (such as Fab 18) exceeded 80%.
In addition, since there was no power outage in the fab, there was no structural damage, including EUV equipment and other important equipment was not damaged, only a certain number of wafers in production were affected by the earthquake. It is expected that most of the production loss will be recovered in the second quarter, which will have little impact on revenues.
According to TSMC's estimates, the total impact of the earthquake will result in a decline in gross margin of approximately 50 basis points in the second quarter, primarily due to losses associated with wafer scrap and material depletion.
TSMC's full-year outlook in US dollar terms remains unchanged from the January conference outlook, with full-year revenue growth expected to be in the low to mid-20s.
