Earthquake in Taiwan causes $162 million loss for TSMC

Taiwan Semiconductor Manufacturing Co. (TSMC) stated on Monday that losses from January’s 6.4-magnitude earthquake will be approximately 5.3 billion New Taiwan dollars ($161.5 million), pushing first-quarter revenue to the lower end of its earlier estimates.

The world’s largest chipmaker indicated that a number of wafers being processed during the earthquake and aftershocks were affected and subsequently scrapped.

The company announced on Monday that revenue in the first quarter of 2025 is now projected to be near the lower end of its guidance range of $25 billion to $25.8 billion. Its January revenue, however, still rose by 35.9% year-over-year, driven by robust demand for artificial intelligence chips.

TSMC clarified that it has not revised its full-year growth outlook of approximately 25 percent in US dollar terms. Nevertheless, its gross margin and operating margin for the January-March period might decrease from earlier estimates.

The January 21 earthquake struck Chiayi city in southern Taiwan, near Tainan, where TSMC operates several state-of-the-art chip plants and supplies artificial intelligence and mobile processors to Nvidia, Apple, Intel, Advanced Micro Devices, and other global chip developers.

Following standard emergency procedures, TSMC and other chipmakers promptly evacuated their facilities after the quake. Industry executives informed Nikkei Asia that it would take several days for operations to normalize.

The revenue revision occurs as Washington continues tightening export controls on TSMC and Samsung’s capacity to ship advanced chips to China. President-elect Donald Trump has also threatened to levy additional tariffs on a broad spectrum of products, including chips manufactured in Taiwan.

Taiwan’s economy ministry is dispatching trade envoys to the US this week to discuss these potential tariffs with the Trump administration. TSMC currently produces most of its chips in Taiwan, Asia’s primary semiconductor hub, but has initiated an aggressive overseas expansion in the US, Japan, and Europe to address calls for diversifying its supply chain.

TSMC is also adopting a very cautious stance on US export controls, notifying Chinese customers for its 16-nanometer or more advanced chips that their orders cannot be shipped unless packaged by US-approved suppliers, and cannot be shipped if packaged at facilities located in China. This more conservative approach follows discussions with the US Department of Commerce and its external legal counsel.