January earthquake shook $165M off TSMC’s revenue forecast

Promises production schedule will get back on track

Taiwanese chipmaking champion TSMC has revealed that a January earthquake will cost it millions.

The January 21st tremblor and its aftershocks peaked with a shake that rated 6.4 on the Richter scale and was followed by several aftershocks. At the time, TSMC asked workers to leave its buildings to ensure their safety.

On Monday the company published a report on the quake’s impact that revealed “no structural damage to our fabs, and the water supply, power, workplace safety systems, and operations are functioning normally.”

Sadly, the news wasn’t all good: TSMC also revealed “a certain number of wafers in process were impacted and had to be scrapped due to the earthquake and aftershocks.”

The company hasn’t said how many wafers were lost. It has advised investors that the impact of he loss means revenue for the quarter in which the quake took place “is now anticipated to be closer to the lower end of the guidance range of $25 billion and $25.8 billion.”

Bean-counters’ best guess, based on a preliminary assessment, is that earthquake-related losses will be approximately $161.5 million – or about 0.6 percent of revenue.

That’s a lot to lose in a few seconds, but TSMC has promised it will make every effort to catch up on its production schedule.

That's welcome news because TSMC's is the world's most sophisticated chipmaker, and customers queue to use its fabs. The company also had good news for investors, in the form of advice that margins and profits for the quarter won’t change, and full-year revenue projections remain on track.

Nature isn’t the only problem for TSMC and the rest of Taiwan’s tech industry: Foreign policy analysts believe China is escalating efforts to mess with submarine cables that carry data between Taiwan and the world. At least four cables have reportedly gone down this year alone, and Taiwanese authorities believe a cable outage in early January 2025 was no accident. Taiwan's government has vowed to more closely monitor shipping to prevent attempts at sabotage.

Submarine cables are also susceptible to earthquakes, as we learned when Tonga’s data links were destroyed in 2022. ®