Taiwan Semiconductor Manufacturing Co., the world’s largest maker of advanced chips, halted some chip-making machinery and evacuated staff after the biggest earthquake to hit its home island in 25 years.
TSMC, the major chipmaker contracted to Apple Inc. and Nvidia Corp., moved staff from some areas and said it was assessing the impact of a 7.4-magnitude earthquake off the East Coast. Smaller local rival United Microelectronics Corp. also stopped machinery at some factories and evacuated some facilities at its hubs in Hsinchu and Tainan, it said in a statement.
Taiwanese companies from TSMC to ASE Technology Holding Co. produce and assemble the vast majority of semiconductors used in devices from iPhones to cars, coming from factories vulnerable to even the smallest shocks. A single vibration can destroy entire batches of precision-made semiconductors. TSMC shares fell about 1.5% in early trading, while UMC fell less than 1%.
“TSMC’s safety systems are functioning normally. To ensure the safety of staff, some factories were evacuated in accordance with company procedure,” the company said in a statement. “We are currently confirming details of the impact.”
Taiwan is prone to earthquakes because it is near the convergence of two tectonic plates. Yet it is also the source of an estimated 80 to 90 percent of the high-end chips needed for advanced applications such as smartphones and artificial intelligence, according to estimates.
Industry executives and government officials have long decried the dangers of concentrating the world’s production of advanced semiconductors on an island that, natural shocks aside, is considered a potential military flashpoint. This has become especially evident during the Covid era, which has exacerbated global shortages of vital components.
American officials, aware of the threat to Taiwan from the mainland Chinese government that considers the island a renegade province, have pushed U.S. and Taiwanese companies, including TSMC, to diversify geographically.
But TSMC’s expansion projects currently underway in Japan and the United States will take time to come into full swing, and American companies such as Micron Technology Inc. still maintain major operations on the island.