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TSMC takes $550m hit from defective chemical at chip plant

Company cuts earnings outlook after troubles supplying Apple and Huawei

TSMC's advanced site in Taiwan produces chips for companies such as Apple, Huawei, Nvidia and MediaTek. (Photo courtesy of Taiwan Semiconductor Manufacturing Co.)

TAIPEI -- Taiwan Semiconductor Manufacturing Co., the world's largest contract chipmaker, downgraded earnings forecasts on Friday owing to a defective chemical that disrupted an advanced production site for Nvidia, Huawei Technologies and other big semiconductor companies.

TSMC said the production problems will cut revenue by as much as $550 million for the quarter ending in March. The company now expects revenue of $7 billion to $7.1 billion -- the lowest since the first quarter of 2016 -- compared with the previous projection of up to $7.4 billion.

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