May 23, 2024
Global tech at risk as Taiwan earthquake halts TSMC chip production. A TSMC building with a glowing circuit board background, symbolizing high-tech semiconductor manufacturing.

A major earthquake in Taiwan has reportedly disrupted production at its semiconductor factories, raising the possibility of repercussions within the tech sector.

The island plays a critical role in manufacturing advanced chips due to its longstanding investment in the field. The Taiwan Semiconductor Manufacturing Company (TSMC), in particular, is renowned for its advanced manufacturing processes, capable of producing chips with small transistors, essential for high performance and energy efficiency in today’s electronics.

However, a 7.4 magnitude earthquake, the largest in the past 25 years, has already resulted in the deaths of seven people, with hundreds injured. Numerous buildings also collapsed, and the aftershocks have triggered landslides across the island’s east coast.

TSMC chip production suspended amid earthquake

TSMC, the world’s largest maker of advanced chips for customers like Apple Inc. and Nvidia Corp., evacuated staff and halted production due to the earthquake. In 2023, the company said it manufactured over 16 million 12-inch silicon wafers at four facilities, referred to as “fabs,” in Taiwan, and also manages additional plants dedicated to producing smaller chips. The Economist reports that Taiwan produced over 60% of the world’s semiconductors and over 90% of the most advanced chips in 2023.

According to Bloomberg, the fabs are ”vulnerable to even the slightest tremors,” a passing vibration can wreck whole batches of semiconductors. “Preventative measures were initiated according to procedure and some fabs were evacuated,” the company said in a statement provided to Nikkei Asia. “All personnel are safe, and those evacuated are beginning to return to their workplaces. The company is currently confirming the details of the impact.”

TSMC added that it had “decided to suspend work at construction sites [for new facilities] for today, and work will resume following further inspections.”

A manager from a TSMC equipment supplier said there were discussions about whether to assign additional staff to work overtime during the forthcoming Tomb-Sweeping holidays later this week. This measure aims to assist chipmakers in compensating for the recent disruptions.

Sources within TSMC disclosed that several wafers had cracked at the Hsinchu factories and that certain machinery had been shut down. Consequently, many anticipate working through the holidays to address these issues.

In Taiwan’s stock market, the Taiex Weighted Index experienced a decline right after the market opened. It saw a drop of up to 0.96% throughout the trading day and ultimately closed with a decrease of 0.63%.

Featured image: Canva / Briáxis F. Mendes

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