Taiwan quake to some hit chip output, cause Asia supply chain disruptions: Analysts

Taiwan quake to some hit chip output, cause Asia supply chain disruptions: Analysts

BEIJING: After chipmakers from TSMC to UMC halted some businesses and relocated people, analysts predict that Taiwan’s biggest disaster since 1999 will probably cause some disruption to Asia’s silicon supply chain.

Nine people were killed and 800 were hurt in Taiwan’s eastern coast on Wednesday morning, near Hualien County, in the wake of the powerful 7.2 % earthquake that struck the country’s northeast coast.

The island, which houses Taiwan Semiconductor Manufacturing Co ( TSMC), one of the largest chipmakers in the world, and Powerchip Semiconductor Manufacturing, one of the smaller chipmakers, has a significant influence on the global semiconductor supply chain.

Many of these companies claim to have evacuated some of their manufacturing facilities and shut down some locations for audits despite the fact that the majority of their services are not close to the center of the earthquake.

” To ensure the health of workers, some fabs were evacuated according to company treatment”, TMSC said in a statement, adding later that the people had begun to return to operate.

According to firm Isaiah Research, TSMC, whose services in Hsinchu, Tainan, and Taichung have experienced varying degrees of disruptions, may have to wait some shipments and improve chip suggestions to make up for this.

They said that preventing the effects of the earthquake requires” careful measures and time” to restore production and uphold quality standards, which would add implications and challenges.

TSMC’s Tainan operations for advanced process nodes, such as 4/5nm and 3nm, were temporarily suspended, they said. Additionally, the extreme ultraviolet ( EUV) lithography equipment that is essential for these advanced nodes was stopped at the site for eight to fifteen hours.

Some highly developed semiconductor factories must operate continuously for several weeks in a vacuum environment, according to Barclays analysts, and stopping operations would cause price pressure in the sector.

This could spillover to cause a” short- term hiccup” to electronics manufacturing in economies focused on upstream products, such as Japan and Korea, as well as economies focused on downstream products, such as China and Vietnam, they said

However, the report noted that customers ‘ lower inventory levels could cause prices to rise for Taiwanese and Korean chipmakers.