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Taiwan Semiconductor Manufacturing Company (TSMC) has confirmed that yield rates were affected by certain substandard chemical used in the manufacturing process, following media reports that said over 10,000 wafers of defective chips were produced during a temporary shutdown at the foundry house.

"TSMC has discovered that a shipment of certain chemical used in the manufacturing process deviated from specifications and caused wafers to have lower yields," said the foundry house in a filing with Taiwan's stock exchange late Monday night in response to the media reports.

"We are carefully investigating the root cause and are communicating with affected customers regarding remedial actions," said TSMC in, stressing that most of the affected wafers can be made up in the first quarter, with the remainder made up in the second quarter.

"Based on our current estimate, TSMC should be able to meet its first quarter guidance given on January 17, 2019," said the foundry house.

TSMC disclosed in another statement today that it discovered yield problems in 12/16nm production at its Fab 14B in Tainan, southern Taiwan on January 19. Nvidia, MediaTek and HiSilicon are reportedly among the main 12/16nm customers of TSMC.

It said the problem was caused by a shipment of photoresist material provided by a vendor with many years of experience and a good track record in supplying to TSMC. But that particular batch of shipment "is significantly below the quality of its previous shipments," TSMC said.

The foundry house said it immediately stopped using the material and notified all affected customers. It did not name the customers.

"Since the discovery of the problem, we have communicated closely with all affected customers on details of replacement and delivery schedules," TSMC said.

In August 2018, TSMC was forced to bring several fabs including its major 12-inch ones offline after a computer virus infected its computer systems and fab equipment. The virus incident also prompted the foundry to cut its revenue and margin guidance for the third quarter of 2018.