Taiwan Semiconductor Manufacturing Co. After the worst earthquake in 25 years, it halted production of some IPs and evacuated factories, raising fears of disruptions to the global technology supply chain.
TSMC, which is the main contract manufacturer of IP for Apple Inc. and Nvidia Corp., displaced employees from some areas and said it was evaluating the effects of the 7.4-magnitude earthquake on the east coast. A local competitor, United Microelectronics Corp. it also stopped machinery at some lines and evacuated some operations at its Hsinchu and Tainan centers, it said in its statement.
Taiwan companies from TSMC to ASE Technology Holding Co. manufacture and assemble solid semiconductor cores, used in devices from iPhones to automobiles, in factories that are sensitive to even the slightest shocks. A single chip can destroy an entire series of precisely manufactured semiconductors. Shares of TSMC fell 1.3%, while shares of UMC lost around 1%.
Technological companies on the island are still evaluating the effects of the earthquake, which flattened several buildings on its eastern side and killed at least those people. TSMC said on Wednesday that employees would begin returning to evacuated facilities, adding that it would investigate the effects. There is a risk that any halt in production will disrupt the process, which – especially for sophisticated semi-conductors – may require not being separated in a vacuum for several weeks, wrote Barclays analysts.
Source: Bloomberg
Taiwan is prone to earthquakes because it is located near the convergence of two tectonic plates. Pesto is thus the source of an estimated 80 to 90% of peak IPs needed for advanced applications such as smartphones and artificial intelligence.
Industry leaders and government officials have been warning her for a long time about the danger posed by the global production of the peninsula on the island, which is considered a potential military hotbed in addition to long-term earthquakes. This was particularly evident in Covid, which deepened the worldwide shortage of vital nutrients.
An American official, threatened at home in Taiwan by the mainland government, which considers the island a renegade province, pressed American and Taiwanese companies – including TSMC – to diversify geographical exchanges.
TSMC’s expansion projects, which are now underway in Japan and the US, will take time to fully ramp up, however, and American companies such as Micron Technology Inc. still maintain significant operations on the island.
Source: Bloomberg
Tags: Earthquake impacts Taiwan TSMC stops production IPs
