Major Earthquake in Taiwan Shakes TSMC Production Lines and Global Chip Supply Chain

Key Takeaway

• A 7.4 magnitude earthquake in Taiwan prompted TSMC, a key global chip supplier, to evacuate production lines, assessing impact.
• The quake's significant effect on infrastructure and potential to disrupt the semiconductor supply chain underscores industry vulnerability.
• With Taiwan being a critical hub for semiconductor manufacturing, the event highlights risks of natural disasters on global tech markets.

Major Earthquake Strikes Taiwan

Taiwan experienced a significant seismic event on Wednesday, with a 7.4 magnitude earthquake occurring off the east coast, near Hualien City. This natural disaster prompted tsunami warnings and affected various parts of the island, including the capital, Taipei, where power outages were reported. The tremor's epicenter was located offshore, in the waters off the eastern coastline of Taiwan Island, as stated by the Taiwan central weather administration. The quake was felt as far away as Shanghai, and its impact was significant enough to cause building collapses in Hualien, trapping some individuals. This event marks the largest earthquake to hit Taiwan since a 7.6 magnitude quake in 1999, which resulted in approximately 2,400 fatalities.

TSMC Evacuates Production Lines

In response to the earthquake, Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest maker of advanced chips and a key supplier to companies like Apple Inc. and Nvidia Corp., evacuated factory areas to ensure the safety of its staff. Nina Kao, a spokeswoman for TSMC, confirmed the evacuation but did not provide detailed information on the specific areas affected. The company is currently assessing the potential impact on its production capabilities. TSMC, along with other Taiwanese semiconductor firms such as United Microelectronics Corp. and ASE Technology Holding Co., operates in a region that is not only crucial for the global supply of high-end chips but is also vulnerable to seismic activities due to its geographical location near the convergence of two tectonic plates.

Semiconductor Industry at Risk

The semiconductor industry in Taiwan, responsible for a significant portion of the world's supply of chips used in various devices from smartphones to automobiles, faces unique challenges due to its exposure to natural disasters like earthquakes. A single seismic event can have devastating effects on the production of semiconductors, as the precision required in manufacturing these components leaves no room for error. The recent earthquake underscores the fragility of this critical supply chain and highlights the ongoing risks faced by manufacturers operating in seismically active regions.

Management Quotes

• Nina Kao, Spokeswoman for Taiwan Semiconductor Manufacturing Co.:

  "The chipmaker to Apple Inc. and Nvidia Corp. moved staff out of certain areas... The world’s biggest contract chipmaker is still assessing the impact of a temblor measuring 7.4 in magnitude off the east coast, which triggered tsunami warnings."