Taiwan’s biggest earthquake in at least 25 years is likely to tighten supply of tech components such as display panels and semiconductors, analysts said, as manufacturers in the global tech powerhouse restore operations at affected facilities.
The powerful 7.2-magnitude earthquake struck Taiwan’s eastern coast near Hualien County on Wednesday morning, killing nine people and injuring more than 1,000.
The island plays an outsized role in the global chip supply chain as it is home to the world’s largest chipmaker, Taiwan Semiconductor Manufacturing Co, which supplies chips to Apple and Nvidia, Reuters reported.
The country also houses smaller chipmakers, including UMC, Vanguard International Semiconductor, and Powerchip Semiconductor Manufacturing.
Manufacturers in Taiwan have been hardening their factories against earthquakes for decades and many use automatic shutdown systems to minimise damage to their production and tools, analysts said.
“For a lot of the tools that go into automatic shutdown, it can take you no more than 36 or 48 hours to bring them back up and re-qualify them,” the report said, quoting Dan Hutcheson, vice chair at Canadian research firm TechInsights.
“When you look at the business side of it – will this affect quarterly revenues? – the odds are it won’t. But it’s going to be a real headache for everyone involved to get this stuff back up and running,” he said.
While most of their facilities are not close to the earthquake’s epicenter, many of the firms said they had evacuated some of their manufacturing plants and shut down some facilities for inspections.
TSMC said on Wednesday work at its construction sites, which has been halted, will resume after inspections, while impacted facilities are expected to restart production throughout the night.
It said overall tool recovery of its chip fabrication facilities reached more than 70 percent within 10 hours of the earthquake, with new fabs reaching more than 80 percent.
Nvidia, whose popular AI chips are manufactured by TSMC, said it had consulted with its manufacturing partners and the firm does not expect supply chain disruptions from the earthquake.
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