Taiwan Earthquake Expected to Have a Short-Term Impact

In the wake of Taiwan's recent earthquake, the semiconductor industry stands resilient, with only short-term disruptions anticipated. Our thoughts are with those affected by this natural disaster, which has garnered attention as the most intense earthquake in Taiwan over the past 25 years. However, despite the severity of the tremors, the impact on Taiwan's semiconductor manufacturing capacity appears to be limited.

Taiwan's advanced Logic capacity is predominantly situated in Tainan, Taichung, and Hsinchu. While Tainan, with its 58% share of this capacity, seems relatively unaffected due to its distance from the epicenter, Hsinchu and Taichung may experience some setbacks. These regions house over 200kspwm of leading-edge capacity collectively, placing them at higher risk of disruption.

In terms of memory production, Hsinchu, Taichung, and Taoyuan jointly account for 69% of the capacity. Their proximity to the earthquake's epicenter raises concerns about potential supply chain disruptions, with companies like Micron particularly vulnerable due to their significant DRAM capacity in Taichung and Taoyuan.

While temporary production halts have been reported for safety checks and equipment inspections, Taiwanese manufacturing sites are well-equipped with earthquake resilience measures. As such, the long-term damage to the semiconductor sector is expected to be minimal. However, short-term supply disruptions may be felt, especially in the memory sector, where supply has already been relatively constrained.

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