This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.
After a historic earthquake struck Taiwan on the 3rd and led to a production halt at its sites in the country, the Taiwan Semiconductor Manufacturing Company (TSMC) has stressed that within ten hours of the catastrophe, it has recovered 70% of its production capabilities. This figure stretches to 80% for some of TSMC’s most advanced factories, such as its Fab 18, and industry observers attribute the rapid recovery to Taiwan’s work ethic, a strong and tightly integrated semiconductor supply chain and building designs that ensure machines are not damaged during such events.
TSMC Says Up To 70% Of Wafer Fabrication Equipment Recovered Within 10 Hours Of Taiwan’s Deadly Earthquake
Due to the delicate nature of semiconductor fabrication, even small disruptions in the manufacturing process can have ripple effects that threaten to harm the already delicate global semiconductor supply chain. For instance, fires that broke out in Japan in 2021 and 2022 ended up disrupting the supply chain for automotive semiconductors, and the earthquake in Japan led to similar worries for the industry.
Soon after the disaster struck, TSMC informed media and investors that it had decided to suspend production at several sites for safety purposes. Protocol in the case of an earthquake typically involves evacuating the clean room and then monitoring the facility remotely to see if there are any fires or other accidents. Following this, the machines are inspected to see if the wafers inside them have been damaged.
If they are damaged, then the machines are carefully cleaned and then recalibrated to make sure they perform up to the mark. In case of no damage, production can resume, but engineers often feed sample wafers to make sure that the systems remain precisely calibrated for making chips.
According to TSMC, the magnitude of the earthquake was different across its manufacturing sites in Taiwan’s Hsinchu, Taichung and Tainan regions – with Hsinchu facing the strongest earthquake with a magnitude of 5. The firm added that it was able to recover 70% of its wafer equipment within ten hours of the earthquake, and for newer sites such as Fab 18, the recovery rate sat at 80%.
Additionally, the firm’s statement also shares that its annual revenue guidance should remain unaffected by the disruption. Industry insiders quoted by the UDN add that while wafer fabrication equipment can be recovered quickly after an earthquake disruption, other equipment, such as lithography machines, takes longer to calibrate due to the need to work with suppliers that use advanced tools for calibration.
As of now, TSMC still aims to grow its revenue by the low to mid twenties in the full year 2024, and automated production has resumed in most regions except those that faced the strongest earthquakes. Its shares are up 32% year to date, benefiting from the A.I. boom that has taken the global semiconductor industry by storm.