7.5 Quake Rattles Taiwan

An earthquake hit Taiwan early on Wednesday with a current death toll of nine, 800 injuries, and expectations that the numbers will rise. The tremor, reported to be the strongest in 25 years, toppled at least 26 buildings across the country.

According to a Bloomberg article, Taiwan Semiconductor Manufacturing Co. (TSMC) evacuated its Hsinchu plants and halted chip manufacturing. United Microelectronics Corp also evacuated its staff in select plants to evaluate damage.

Approximately 80-90% of advanced semiconductors used in AI, iPhones, and vehicles are made and assembled by TSMC and ASE Technology Holding Co. TSMC is the main contract chipmaker for Apple and Nvidia. The slightest vibration impacts the intricate and fragile chips, and a tremor can destroy batches of the precision chips. The last update from TSMC is that its staff is returning to some of the evacuated buildings while others are still being assessed for damage. Micron also maintains operations in Taiwan.

Although Taiwan has been expanding globally to address its natural disaster risks and a precarious political relationship with China, that expansion in Japan and the U.S. is still not up to speed.

As the situation unfolds, it becomes increasingly clear that the earthquake will have a significant impact on the already fragile semiconductor supply chains. However, the full extent of this impact is yet to be determined, adding to the uncertainty and complexity of the situation.