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Taiwan earthquake halts TSMC chip production, potentially affecting global tech industry

A major earthquake in Taiwan has reportedly disrupted production at its semiconductor factories, raising the possibility of an impact on the technology industry.

The island plays a key role in advanced chip manufacturing thanks to long-term investments in the field. Taiwan Semiconductor Manufacturing Company (TSMC), in particular, is known for its advanced manufacturing processes that enable the production of chips with small transistors, which are critical to the high performance and energy efficiency of today’s electronics.

However, the largest earthquake of magnitude 7.4 in the past 25 years has killed seven people and injured hundreds. Many buildings also collapsed and aftershocks triggered landslides along the island’s east coast.

TSMC suspends chip production due to earthquake

TSMC, the world’s largest maker of advanced chips for clients including Apple Inc and Nvidia Corp, evacuated employees and halted production due to the quake. The company said it produced more than 16 million 12-inch silicon wafers through 2023 at its four factories in Taiwan, known as “fabs,” and manages additional plants dedicated to smaller chips. The Economist reports that by 2023, Taiwan will produce more than 60% of the world’s semiconductors and more than 90% of the most advanced chips.

According to Bloomberg, these fabs are “vulnerable to even the slightest shock,” and a brief jolt could destroy an entire batch of semiconductors. “Precautionary measures have been initiated in accordance with procedures and some fabs have been evacuated,” the company said in a statement provided to Nikkei Asia. “All personnel are safe and evacuated personnel have begun returning to the workplace.” The company is currently confirming the details of the impact.”

TSMC added that it had “decided to suspend work at construction sites” [for new facilities] Work will resume today after further inspections. “

A manager at one of TSMC’s equipment suppliers said that discussions are underway later this week about whether to send additional employees to work overtime during the upcoming Tomb Sweeping Day holiday. The measure is intended to help chipmakers make up for recent disruptions.

Sources within TSMC revealed that multiple wafers were broken at the Hsinchu factory and some machines were shut down. Therefore, many people expect to grapple with these issues during the holidays.

In the Taiwan stock market, the Taiwan Exchange Weighted Index fell immediately after the opening. It fell as much as 0.96% throughout the day and finally closed down 0.63%.

Featured Image: Canva / Briáxis F. Mendes

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