TSMC to seek compensation for defective raw materials

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Taiwan Semiconductor Manufacturing Co. (TSMC) will seek compensation from the company that provided it with substandard raw materials resulting in several hundred million U.S. dollars in sales losses earlier this year, the world's largest contract chipmaker said Tuesday.

However, TSMC declined to reveal the name of the supplier or the sum of the claim.

The statement came after a local newspaper reported earlier Tuesday that American chemical corporation Dow Chemical was the supplier of the substandard photoresist materials.

The report also said TSMC will seek NT$4 billion (US$129.88 million) in compensation from Dow.

Declining to comment on the report, TSMC said only that the supplier involved in the incident should be held liable for its failure to detect heterogeneous polymers in the photoresist materials that caused the losses.

TSMC was forced to scrap tens of thousands of silicon wafers at its Fab 14B, a 12-inch wafer foundry in Tainan, southern Taiwan, last month because of the defective raw materials.

Last Friday the Hsinchu-headquartered chipmaker said the impact of the production interruption was greater than expected, costing the company about US$550 million in sales and resulting in a lower first quarter sales forecast of US$7-7.1 billion.