A significant earthquake has rocked Taiwan, leading to TSMC evacuating some of its plants and pausing chipmaking production.
There are fears of disruption to the global supply chain. However, the human impact is immediate due to the 7.4 magnitude earthquake. Taiwanese catastrophe is the biggest to hit the East Asian country in 25 years.
TSMC is the world leader in chip-making, enjoying prestigious client status with Apple and Nvidia. According to The Economist, the company produced over 60% of the world’s semiconductors and 90% of the most advanced chips overall last year.
Wang Ting-yu, a Taiwanese MP who sits on the Foreign Affairs & National Defense Committee, posted on X to relay his concern.
A major earthquake with a magnitude of 7.4 just struck off Taiwan, not only halting the THSR trains but also causing sudden damage in many areas.
Hope everyone is safe! pic.twitter.com/nhdco0JabT
— 王定宇 Wang Ting-yu, MP (@MPWangTingyu) April 3, 2024
At the time of writing, nine people are reported to have died, with more than 900 injured and many still trapped.
Bloomberg has detailed how the fabs can be “vulnerable to even the slightest tremors. A single vibration can destroy entire batches of the precision-made semiconductors.”
Map of the Taiwan earthquake's impact on semiconductor and electronics production, via Barclays: "We believe this could lead to supply disruptions in the tech supply chain" pic.twitter.com/qsDr7WOzKX
— Tracy Alloway (@tracyalloway) April 3, 2024
The markets have responded to the natural disaster, with TSMC shares falling 1.3%.
“Preventative measures were initiated according to procedure and some fabs were evacuated,” said TSMC in a statement to Nikkei.
The company claims all personnel are safe, and those evacuated are beginning to return to their workplaces. TSMC is currently confirming the impact details. The work at construction sites for new plants was suspended for the day to be resumed after safe inspections.
Industry figures and government officials have been wary of the concentration of semiconductor production on an island prone to natural shocks and geopolitical factors, with the shadow of China looming large on Taiwan.
The US administration has urged TSMC to diversify its operations with the company already in Japan and Arizona, to varying degrees.