A powerful 7.4 magnitude earthquake that struck Taiwan on Wednesday has raised concerns about potential disruptions to the global semiconductor supply chain. Taiwan is home to some of the world’s largest chip manufacturers, including industry leader TSMC, which supplies components to tech giants like Apple and Nvidia.
The earthquake, the strongest to hit the island in at least 25 years, has killed 10 people and injured over 1,070 others. It has also left around 700 people missing or stranded, according to reports.
Taiwan’s semiconductor industry, which accounts for over 60% of global chip production, is highly sensitive to external contamination and disruption. The earthquake’s impact on chip manufacturing facilities has sparked fears of a potential supply shortfall in the coming months.
“There are concerns that the Taiwan earthquake may lead to a shortfall in the supply of tech components like semiconductors and display panels,” said a report by Hindustan Times. “Taiwan is home to some of the biggest global tech firms, including the world’s largest chipmaker TSMC.”
TSMC, however, has sought to allay fears, stating that more than 70% of its chip manufacturing machinery has already resumed production. Nvidia has also announced that it does not expect any disruptions to its semiconductor supply.
The earthquake comes at a time when the global semiconductor industry is still grappling with the aftermath of the COVID-19 pandemic, which caused widespread supply chain disruptions. The industry has been working to diversify its manufacturing footprint, with companies like TSMC and Samsung announcing plans to build new facilities in regions like the United States.
“Lately, several companies like TSMC and Samsung have decided to move away from the ‘Ring of Fire’ to open their new facilities in Arizona and Texas in the US,” the report noted. “Both of these regions have low vulnerability to earthquakes.”
As rescue efforts continue in Taiwan, the semiconductor industry will be closely monitoring the situation to assess the full extent of the earthquake’s impact on chip production and supply. With the global economy still recovering, any significant disruption to the semiconductor supply chain could have far-reaching consequences.
