Taiwan Earthquake Shakes Global Semiconductor Industry

Taiwan's recent earthquake shakes the semiconductor industry, prompting urgent reflections on resilience amidst global supply chain disruptions and the imperative for proactive measures.

By Raunak Bose 04 Apr 2024

in Technology

Taiwan Earthquake Shakes Global Semiconductor Industry

New Update

The most recent earthquake in Taiwan is creating a disruption in the worldwide technology industry, leading to the disruption of the manufacturing process of very advanced semiconductors. Taiwan is an important player in the semiconductor industry and is experiencing a vicious blow from the earthquake. The major semiconductor manufacturers such as TSMC and United Microelectronics Corp. also were adversely affected by the catastrophe.

TSMC, the world's largest contract chipmaker for companies such as Apple and Nvidia, shut down certain areas and assessed the damage caused by this earthquake. Likewise, United Microelectronics Corp. switched machines off at some plants and also evacuated factories in Hsinchu and Tainan.

The earthquake which had the magnitude of 7.4 took place from the eastern coast near Hualien with the lives of 9 people being lost and over 1000 injured. As the search goes on, over 600 people still remain stuck, pointing to the continuing problem of reaching the area affected by the disaster. The aftermath again indicates how important it is to act fast and effectively in order to deal with both the immediate and long-term effects of the crisis on the people.

Assessing the Impact of the Taiwan Earthquake on Semiconductor Giants

The impact of Taiwan on global semiconductor manufacturing cannot be ignored. The country is the leading producer of very advanced chips, which are the driving power for most advanced applications including AI, smartphones and electric vehicles. Any chip production disruption is a danger to the international supply chain due to the dependence of industries on such components.

Taiwanese Semiconductor Manufacturing Company (TSMC) (via The Wall Street Journal)

There are two main issues that need to be taken care of first. One of them concerns the ability of AI to be developed. Technological advancements make AI one of the most influential technologies in the tech sphere, however, a lack of chips necessary for the training of new AI models could slow down the progress in this area. Firms such as Nvidia who get their AI chips through TSMC are amongst the enterprises that face the risk of the plant closing operations.

The dominance of chip production in Taiwan has been always subject to dispute. It enabled the engineers to work together efficiently and resulted in many technological advances, but as issues such as the earthquake shown have demonstrated the weaknesses of the system, too. As the demand for resilience in supply chains and geopolitical relations increases, steps towards diversifying chip production worldwide are currently being taken.

In the end, the recent earthquake in Taiwan has shown how unstable the global semiconductor supply chain can be, and why it is important to ensure its resilience to both natural disasters and geopolitical upheavals. The tech sector remains very much dependent on Taiwanese chip makers and thus stakeholders should take action towards risk management and supply chain resilience as the former is a prerequisite for future innovation and progress.

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