In the volatile world of semiconductor production, a single seismic event can send shockwaves through the global supply chain. When Taiwan was rocked by a powerful 7.4 magnitude earthquake, the response from key players shed light on years of meticulous preparedness.
The earthquake struck near Taipei at 8 a.m. local time, causing casualties primarily in Hualien, the city nearest to the epicenter. Trapped individuals, injuries, and extensive damage were reported amidst the chaos.
Resilient Chip Producers
Despite the tremors, the market remained relatively calm, with the Taiwan Weighted Index closing just 0.6% lower than the previous day.
Leading chip manufacturer, Taiwan Semiconductor Manufacturing (TSM), saw its stock rise by 1.6% after confirming that its safety protocols had been executed without a hitch.
Similarly, Micron Technology Inc (MU), with four production sites in Taiwan, reported a 3.1% increase in stock price to $126.53 after assessing the situation and pledging transparent communication with clients regarding any delivery changes.
Both companies are poised to resume operations shortly, leveraging sturdy modern infrastructure designed to withstand significant seismic activity.
Predictions of Disruption
However, not all voices shared the optimism of chip producers. One observer, Fabrizio, noted the potential spoilage of high-end chips like the 3nm A17 Pro in upcoming iPhone models due to the quake’s impact on uninterrupted manufacturing processes.
Echoing concerns, Spencer Hakimian from Toulou Capital Management indicated the profound global repercussions of any disruption in TSMC’s production, emphasizing the world’s heavy reliance on Taiwan for cutting-edge semiconductors.
Market Resilience
Across the ocean, U.S. investors displayed confidence in the resilience of the semiconductor sector, with the VanEck Semiconductor ETF (SMH), featuring TSMC holdings, posting a 0.7% gain.
Meanwhile, TSMC’s top clients, Apple Inc (AAPL) and Nvidia Corporation (NVDA), responded differently to the news. Apple’s shares rose 1% to $170.28, while Nvidia saw a marginal decline of 0.2%.
Now Read: TSMC Suspends Chip Production After Taiwan Rocked By Strongest Tremor In 25 Years
Image generated using artificial intelligence via Midjourney.