TSMC Lost $550 Million in Q1 thanks to Dodgy Materials

TSMC, the manufacturer behind AMD and Nvidia’s latest products as well as the silicon behind most modern consoles, has announced that they have lost $550 million in wafers thanks to a bad batch of photoresist material which was given to them by one of the company’s suppliers.  

At this time TSMC’s 12/16nm wafers are thought to be affected by the defective materials, impacting wafers at Fab 14B. It is unknown whose products were affected by these defective wafer materials, though it is known that TSMC’s 12nm process is used to create Nvidia’s latest Turing series of graphics cards. 

To ensure high levels of product quality, TSMC has had to scrap more wafers than expected, though the company states that the wafers that were scrapped in Q1 will be made up for in Q2. Thankfully, TSMC has found that demand in Q1 was higher than expected, adding an estimated $230 million in additional revenue in Q1. This partially makes up for TSMC’s $550 million loss. 

TSMC has revised its Q1 2019 revenue estimates, lowering its revenue projections from $7.4 billion to $7.1 billion. The company’s gross margins are also set to drop by a few percentage points.