TSMC halts some chipmaking, evacuates plants after major quake

TAIWAN Semiconductor Manufacturing Company (TSMC), the world’s largest maker of advanced chips, halted some chipmaking machinery and evacuated staff after the biggest earthquake to hit its home island in 25 years.

TSMC, the main contract chipmaker to Apple and Nvidia, moved staff out of certain areas and said it is assessing the impact of a temblor measuring 7.4 in magnitude off the east coast. Smaller local rival United Microelectronics Corporation (UMC) also halted machinery at some plants and evacuated certain facilities at its hubs of Hsinchu and Tainan, it said.

Taiwanese firms from TSMC to ASE Technology Holding make and assemble the vast majority of the semiconductors that go into devices from iPhones to cars from factories vulnerable to even the slightest tremors. A single vibration can destroy entire batches of the precision-made semiconductors. TSMC shares slid about 1.5 per cent in early trade, while UMC was down less than 1 per cent.

“TSMC’s safety systems are operating normally. To ensure the safety of personnel, some fabs were evacuated according to company procedure,” the company said. “We are currently confirming the details of the impact.”

Taiwan is prone to quakes because it is near the convergence of two tectonic plates. Yet it is also the source of an estimated 80 to 90 per cent of the highest-end chips required for advanced applications such as smartphones and artificial intelligence.

Industry executives and government officials have long called out the dangers of centering the world’s advanced semiconductor production on an island that, apart from natural shocks, is considered a potential military flashpoint. That became particularly evident during the Covid era, which exacerbated a global shortage of the vital components.

American officials, mindful of the threat to Taiwan from a mainland Chinese government that considers the island a renegade province, have pushed US and Taiwanese companies – including TSMC – to diversify geographically.

But TSMC expansion projects now underway in Japan and the US will take time to get up to full speed and American companies such as Micron Technology still maintain major operations on the island. BLOOMBERG