A powerful 7.2-magnitude earthquake struck Taiwan last Wednesday, April 3. This was the biggest earthquake to hit the island in the last 25 years and has unfortunately caused casualties and multiple property damage across the island.
In the aftermath of the earthquake, there have been initial concerns about how the earthquake would impact the global chip and semiconductor supply. However, based on recent reports, analysts now predict minimal long-term disruption to the global chip and semiconductor supply chain.
Taiwan’s Role in the Global Electronics Industry
The island plays a critical role in chip and semiconductor manufacturing and is the heart of the global electronics industry. Taiwan houses 92% of the world’s most advanced chip production and 18% of global semiconductor manufacturing capacity (according to the U.S. International Trade Commission).
Aside from that, the island is also home to the largest chipmaker in the world, Taiwan Semiconductor Manufacturing Co. (TMSC). TMSC operates 14 sites on the island and supplies chips to some of the electronics giants all over the world including Apple, Nvidia, Samsung, and Amazon.
The Current State of Manufacturing in Taiwan
During the earthquake, TSMC took precautionary measures and paused production on some of their plants on the west coast. The company reported minimal damage to critical equipment. Additionally, it is reported that 70-80% of TSMC’s machinery was operational within 10 hours.
Similarly, United Microelectronics Corporation, one of the leading global semiconductor companies in Taiwan, reported minimal impact on its operations. According to FOX Business, a spokesperson from Nvidia has also stated that they do not expect the earthquake to have any impact on their supply after consulting their suppliers in Taiwan.
Conclusion
Manufacturers in Taiwan have implemented comprehensive earthquake protection measures, minimizing damage to sensitive technologies. Because of this, the immediate impact of the Taiwan earthquake appears to be minimal. However, this event should still serve as a wake-up call for the whole electronics industry. Diversifying the chip and semiconductor supply chain can help mitigate risks associated with future disruptions. This could involve investing in chip manufacturing facilities in other regions around the world.
