Analysts say the Asian semiconductor market is on the decline after Taiwan’s strongest earthquake since 1999 caused semiconductor makers from TSMC to UMC to suspend some operations to inspect facilities and reassign employees. He said it is likely to cause some disruption to the entire supply chain.
A powerful 7.2 magnitude earthquake struck Taiwan’s east coast near Hualien County on Wednesday morning, killing nine people and injuring 800 others.
The island is home to Taiwan Semiconductor Manufacturing, the world’s largest chipmaker that supplies chips to Apple and Nvidia, and plays a vital role in the global chip supply chain.
The country also has small chip manufacturers such as UMC, Vanguard International Semiconductor, and Powerchip Semiconductor Manufacturing.
Although most of their facilities are not close to the earthquake’s epicenter, many companies said they had evacuated parts of their manufacturing plants and closed some facilities for inspection.
TSMC announced Wednesday that work at suspended construction sites will resume after inspection, but affected facilities are scheduled to resume production overnight.
Semiconductor manufacturers’ facilities in Hsinchu, Tainan and Taichung have experienced varying degrees of disruption, and some shipments may need to be delayed and wafer inputs increased to compensate, consultants said. the company Isaiah Research said in a memo.
“Mitigating the impact of the earthquake requires careful measures and time to restore production and maintain quality standards, resulting in further impacts and obstacles,” they said.
TSMC’s operations in advanced process nodes such as 4/5nm and 3nm in Tainan have been temporarily suspended. Additionally, extreme ultraviolet (EUV) lithography equipment, which is critical to these advanced nodes, was down on site for 8 to 15 hours.
Barclays analysts say some advanced semiconductor factories must operate seamlessly 24/7 in vacuum conditions for weeks, and any shutdown would disrupt processes and increase pricing pressure on the sector. Stated.
This impact could ripple and cause “short-term disruption” to electronics manufacturing not only in upstream-focused economies such as Japan and South Korea, but also in downstream-focused economies such as China and Vietnam. The researchers said that there is.
However, the report notes that chipmakers in Taiwan and South Korea could raise prices due to lower customer inventory levels.
