Morris Chang, chairman of Taiwan Semiconductor Manufacturing Company (TSMC), indicated that though the supply chain was disrupted by the Japan earthquake, clients in Japan have not canceled orders.

Since the impact from the earthquake is mild and demand from clients remains strong, TSMC still expects 2011 revenues to increase 20% from NT$419.5 billion (US$14 billion) in 2010, the company said.

TSMC has been looking for new solar wafer sources in Japan from regions not affected by the earthquake and has also requested current suppliers raise shipments, Chang noted. He also reiterated that clients in Japan have not canceled chip orders. The Japan market accounts for 5-10% of the company's revenues.

Japan is a major manufacturer of upstream semiconductor materials and wafers as well as semiconductor equipment. In addition to securing wafer supply, Chang also pointed out that equipment maker TEL will resume production soon. Though TEL's plants did not sustain damage from the earthquake and tsunami, production was halted after March 11.

TSMC expects first-quarter consolidated revenues to reach NT$105-107 billion, up 3-5% sequentially. Quarterly gross margin will be 47-49% and operating margin about 35-37%. Revenues for January and February combined for NT$66 billion. March revenues should total NT$40 billion, up 25% sequentially.