Semiconductor Giant TSMC Shaken by Historic Taiwan Earthquake

Key Takeaways

  • A devastating 7.4 magnitude earthquake in Taiwan prompts TSMC to suspend chip production, impacting the global tech supply chain.
  • The quake leads to nine fatalities, over 900 injuries, and disrupts TSMC's operations, spotlighting Taiwan's vulnerability to natural and geopolitical threats.
  • TSMC shares dip as the company assesses damage and initiates recovery, amid calls for geographic diversification of semiconductor manufacturing.

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.

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.”

The markets have responded to the natural disaster, with TSMC shares falling 1.3%.

TSMC shares drop | Source: Google Finance
TSMC shares drop | Source: Google Finance

“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.