Taiwan was hit by its strongest earthquake in 25 years, killing at least nine people and injuring more than 900. Despite the devastation of the 7.4 magnitude quake on Wednesday, a TrendForce survey of vital chip fabs on the island found what appeared to be “minimal initial damage.”
The earthquake underscored once again the important role Taiwan’s memory and advanced node semiconductor manufacturers play in the world’s chip supply chain.TSMC is based in Taiwan and makes roughly 90 percent of the world’s advanced chips that are used in iPhones and for AI acceleration in data centers as well as electric vehicles and even defense applications.
TrendForce reported it investigated the damage and operational status of various island manufacturers, finding they have begun sequential shutdowns for inspections, but no significant equipment damage has been reported thus far. Manufacturers believe they can restore production capacity by ramping up operations.
Nvidia uses TSMC’s South Taiwan Science Park for manufacture of advanced chips on the 4nm process, but no personnel had to be evacuated there, TrendForce said. Equipment inspections did require some temporary shutdowns, and TrendForce predicted operations could be resumed with minimal impact on chip supply.
For its part, Nvidia said late Wednesday it consulted with its manufacturing partners and doesn't expect any impact to its supply because of the earthquake.
TSMC issued a statement that said some of its manufacturing plants were evacuated and some facilities shut down for inspections. Its operations in Hsinchu, Tainan and Taichung experienced various degrees of disruptions which may delay some shipments, according to Isaiah Research. The firm said Tainan operations for advanced process nodes such as 4/5nm and 3nm were temporarily suspended and EUV lithography equipment used in making the nodes was halted for up to 15 hours.
Barclays said some fabs must operate seamlessly around the clock in a vacuum for several weeks, so any halts in work would disrupt that process and push up prices and cause a “hiccup” to electronics manufacturing in nearby Asian countries.
Micron has DRAM production in Taiwan and the company has suspended pricing practices to assess post-disaster losses, while Samsung and SK Hynix have also halted pricing, even though neither has DRAM production in Taiwan.
Even before the earthquake, the market for DRAM and NAND Flash memory had shown signs of weak demand for several weeks. Micron and Nanya had shutdowns, but ample supply on hand has prevented significant fluctuations in price, TrendForce said.
There could be a short-term increase in DRAM prices. DRAM suppliers and module factories have temporarily ceased pricing activity, “reflecting a cautious approach in the aftermath of the earthquake,” TrendForce said in a statement.
Many of the injuries occurred in Hualien County in eastern Taiwan, a tourist location. Dozens of people, including miners, were trapped in tunnels in that region.