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Asia300

Chipmaker cuts margins forecast after Taiwan quake

Chipmaker TSMC lowered its forecast for gross margin in the current quarter as operations at its facility in the Taiwanese city of Tainan were affected by the Feb. 6 earthquake.

TAIPEI -- Taiwan Semiconductor Manufacturing Co. has lowered its guidance for gross margin and operating margin covering the quarter ending in March due to this month's powerful earthquake that struck Tainan, a southern Taiwanese city that hosts a key production site for the world's biggest contract chipmaker.

     TSMC said late Wednesday its gross margin for the current quarter would dip to 44-46%, down 3 percentage points from its Jan. 14 projection of 47-49%. This could equal a reduction of up to $6.06 billion New Taiwan dollars ($182 million) in gross profit, based on the midpoint of the company's newly projected revenue of NT$201 billion to NT$203 billion.

     But that revenue would be higher than the earlier forecast of NT$198 billion to NT$201 billion, with the increase prompted by stronger demand for chips and a weaker-than-expected Taiwanese dollar.

     The company, based in Hsinchu, Taiwan, achieved a gross margin of 49.3% in the year-ago period, equaling a gross profit of NT$109.43 billion.

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