Citi analysts said in a note Wednesday that they believe the earthquake's impact on facilities and production at Taiwan Semi (TSM) is under evaluation but manageable.
A significant earthquake, registering magnitude 7.4, struck just off Taiwan’s east coast early morning on Wednesday, 3 April, and was followed by numerous aftershocks.
Citi said that TSM launched comprehensive checks across its facilities in northern, central, and southern Taiwan to assess the condition of production lines and equipment.
"While the impact of the 3 April earthquake to TSMC’s facilities and production is still under evaluation, we believe the impact will be more on GM rather than on revenue, considering the strong demand from advanced node in particular on AI-related applications," wrote the bank.
Analysts added: "We also note NTD depreciation of 3-4% YTD, which will also be able to offset some GM decline resulting from the earthquake. We had modeled 3% QoQ revenue growth for 2Q24E with GM at 53%, and we believe the impact to TSMC operations from the earthquake should be manageable."