Page 334 - TSMC 2018 Annual Report

c. In May 2017, Uri Cohen filed a complaint in the U.S. District Court for the Eastern District of Texas alleging that the Company, TSMC North America and other companies infringe four U.S. patents. Cohen’s case was transferred to and consolidated with the responsive declaratory judgment case for non-infringement of Cohen’s asserted patents filed by the Company and TSMC North America in the U.S. District Court for the Northern District of California. In July 2018, all pending litigations between the parties in the U.S. District Court for the Northern District of California were dismissed.
d. On September 28, 2017, the Company was contacted by the European Commission (the
“Commission”), which has asked us for information and documents concerning alleged
anti-competitive practices in relation to semiconductor sales. We are cooperating with the Commission to provide the requested information and documents. In light of the fact that this proceeding is still in its preliminary stage, it is premature to predict how the case will proceed, the outcome of the proceeding or its impact.
e. The Company entered into long-term purchase agreements of material with multiple suppliers. The relative minimum purchase quantity and price are specified in the agreements.
f. The Company entered into a long-term purchase agreement of equipment. The relative purchase quantity and price are specified in the agreement.
g. The Company entered into long-term energy purchase agreements with multiple suppliers. The relative purchase period, quantity and price are specified in the agreements.
h. As of December 31, 2018, the Company provided endorsement guarantees of NT$2,557,977 thousand to its subsidiary, TSMC North America, in respect of providing endorsement guarantees for office leasing contract.
35. SIGNIFICANT LOSSES FROM DISASTERS
The Company experienced a computer virus outbreak on August 3, 2018, which affected a number of computer systems and fab tools, and consequently impacted wafer production in Taiwan. All the impacted tools have been recovered by August 6, 2018. The Company recognized a loss of NT$2,596,046 thousand related to this incident for the three months ended September 30, 2018, which was included in cost of revenue.
36. SIGNIFICANT SUBSEQUENT EVENTS
On January 19, 2019, the Company discovered a wafer contamination issue in a fab in Taiwan caused by a batch of unqualified photoresist materials. After investigation, the Company immediately stopped using the unqualified materials. As of the date the accompanying parent company only financial statements were issued, a preliminary estimated loss of NT$6,100,000 thousand will be recognized in cost of revenue for the three months ended March 31, 2019.
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