Earthquake in Taiwan is a wake up call to the entire chip Supply chain

The south-east coast of Taiwan was slammed by an earthquake on September 18 with a magnitude of 6.8, but Taiwan-based semiconductor manufacturers reported no significant damage. Due to its geography, Taiwan is particularly susceptible to earthquakes, and this most recent one serves as a reminder of just how fragile a sizable portion of the global chip supply is.

The quake was one of many that occurred that day; the first one, on September 17, did not cause much harm, but the mainshock caused numerous building collapses, power outages, over 100 injuries, and one fatality.

Major corporations including TSMC and Micron reportedly reported no harm, according to Digitimes Asia. The western part of the island is home to the majority of the important facilities, hence the shocks there were significantly weaker in strength. However, according to the China Science and Technology Administration and UMC CFO Chi-tung Liu, certain equipment experienced an automatic shutdown.

The most recent earthquake serves as a reminder that the world’s chip supply is still extremely susceptible to disruption.

Building quality has increased in recent years, and semiconductor production facilities are undoubtedly some of the most durable. In order to safeguard the foundation of the Taiwanese economy, modern buildings are constructed to withstand earthquakes of up to a magnitude of 7.0.

There has been a lengthy history of earthquakes in Taiwan, notably the 1999 Jiji earthquake, which had a magnitude of 7.3 and killed over 2,400 people. Global RAM chip supply were constrained as a result, tripling market prices over the ensuing weeks and months.

The larger global IT industry is moving to detach itself from an overreliance on Taiwanese manufacturing, whether it’s due to natural disasters, tensions with China, or simply economic overcentralization. Countries and businesses alike are all too aware of the risk of putting too many eggs in one basket, as demonstrated by the USA’s Chips Act or firms like Intel striving to diversify its manufacturing.

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