TSMC shrugs off impact of Taiwan earthquake

Nonetheless DRAM prices may yet feel slight aftershocks

Chip maker TSMC has shrugged off the impact of yesterday's earthquake on the east coast of Taiwan.

At least 10 people were killed, and more than 1,000 hurt as well as 100 buildings damaged, in the magnitude 7.4 quake.

"Based on TSMC's ample experience and capabilities in earthquake response and damage prevention, as well as regular disaster drills to ensure full readiness, overall tool recovery of our fabs reached more than 70 percent within ten hours of the earthquake, with new fabs such as the Fab 18 facility reaching more than 80 percent," the silicon slinger declared in a Wednesday Taiwan Stock Exchange (TWSE) filing.

The filing admitted that "a small number of tools" were damaged – but critical tools such as extreme ultraviolet (EUV) lithography equipment emerged unscathed.

According to the TWSE statement, all personnel are safe and returned to their workplace shortly after the incident, which saw the facilities briefly evacuated, reportedly as a safety precaution.

The biz added that it is "deploying all available resources for full recovery" and "impacted facilities are expected to resume production throughout the night."

Initial inspections of TSMC's construction sites in Taiwan found nothing worrying, although work remains suspended pending further investigation.

The maximum magnitude of the quake at chip manufacturing sites in Hsinchu, Longtan, and Zhunan science parks was 5, while at Taichung and Tainan it was a relatively tame 4.

Other impacts of the quake were spotted by semiconductor-scrying analyst firm TrendForce, which noticed a pause in production at a TSMC plant that produces product for Nvidia – but staff at that plant were not required to evacuate the building.

Nvidia has told media it doesn't expect the earthquake to have any impact on supply.

TrendForce agreed, predicting "these operations can be quickly resumed with minimal impact on supply."

Also according to TrendForce, Taiwan's memory business was similarly lucky: Sequential shutdowns had begun, but no significant equipment damages in the industry have yet been reported.

"The DRAM industry, primarily located in the northern and central parts of Taiwan, and the foundry industry, spread across the north, central, and southern regions of Taiwan, appear to have sustained minimal initial damage," the analyst firm wrote.

However, some memory suppliers have suspended pricing anyway. In the case of Micron, suspension of its DRAM is ongoing as it evaluates "post-disaster losses" before "[restarting] negotiations for 2Q24 contract prices."

TrendForce cautions that as DRAM and NAND Flash memory have shown weak demand and plenty of supply sits on shelves, the earthquake is not likely to impact pricing heavily – but a slight short-term increase is likely.

The earthquake remains the strongest experienced in Taiwan in 25 years. The potential for future quakes to impact supply of semiconductors has again focused attention on the concentration of manufacturing in Taiwan – one factor in present geopolitical tensions and attempts to diversify silicon supply chains. ®

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