Massive 7.4-magnitude earthquake strikes Taiwan, threatens tech provide chain

In transient: A 7.4-magnitude earthquake that struck Taiwan on Wednesday morning (8 pm Tuesday Eastern Time) has claimed 9 lives as of writing, injured tons of others, and threatens to disrupt the tech provide chain.

According to NBC News, the quake hit roughly 11 miles south-southwest of Hualien at a depth of about 21 miles, and triggered tsunami warnings for Taiwan, Japan, and the Philippines that have been ultimately lifted.

Bloomberg mentioned some native chipmakers, together with market chief Taiwan Semiconductor Manufacturing Co., have halted operations. The firm advised the publication it has moved employees out of particular areas and is assessing the state of affairs.

United Microelectronics Corporation, one other chipmaker within the area, mentioned the quake triggered automated security measures at fabs in Hsinchu and Tainan that affected some wafers on the manufacturing line. All employees are secure, nonetheless, and there was no materials impression on the corporate’s operations. As such, enterprise and shipments are resuming as regular, UMC mentioned.

TSMC is the main contract producer for a few of the world’s largest tech firms together with Apple and Nvidia. Disrupting a key cog within the provide chain may have a form of trickle-down impact.

Bum Ki Son and Brian Tan, analysts with Barclays, mentioned some high-end chips require seamless 24/7 operations in a vacuum state for weeks at a time. Halting operations may doubtlessly damage chips which might be halfway by means of the manufacturing course of.

It is simply too early to know for positive, however most do not imagine the quake will completely derail the tech provide chain like we have seen with different main occasions.

Unlike Covid the place every thing worldwide got here to a sudden cease, Taiwan is just one a part of the tech provide chain, and it doesn’t sound like infrastructure was completely worn out like we noticed with the devastating floods in Thailand in 2011 that prompted arduous drive costs to soar.

In the case of TSMC, analysts with Bloomberg Intelligence suspect demand for its superior course of nodes ought to cushion any form of short-term monetary impression.

Image credit score: Pixabay

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