Taiwan Semiconductor Manufacturing Co., the world’s largest maker of advanced chips, has halted some chip-making machines and evacuated staff after the biggest earthquake on its home island in 25 years.
TSMC, Apple Inc.’s main contract chipmaker. and Nvidia Corp., moved staff out of certain areas and said it was assessing the impact of a magnitude 7.4 earthquake off the East Coast. Smaller local rival United Microelectronics Corp. has also halted machinery at some factories and evacuated certain facilities at its Hsinchu and Tainan hubs, the company said in a statement.
Taiwanese companies, from TSMC to ASE Technology Holding Co., make and assemble the vast majority of semiconductors used in devices from iPhones to cars from factories vulnerable to even the slightest vibrations. A single vibration can destroy entire batches of precision-crafted semiconductors. TSMC shares were down about 1.5% in early trading, while UMC was down less than 1%.
“TSMC’s safety systems are functioning normally. To ensure the safety of employees, some factories were evacuated as per company procedure,” the company said in a statement. “We are currently confirming the details of the impact.”
Taiwan is prone to earthquakes because it is close to the convergence of two tectonic plates. Yet it is also the source of an estimated 80% to 90% of the high-performance chips needed for advanced applications such as smartphones and AI.
Industry executives and government officials have long pointed out the dangers of concentrating the world’s advanced semiconductor manufacturing on an island that, barring natural shocks, is considered a potential military flashpoint. That became especially apparent during the Covid era, which exacerbated a global shortage of the vital components.
U.S. officials, aware of the threat to Taiwan from a mainland Chinese government that views the island as a renegade province, have pushed U.S. and Taiwanese companies — including TSMC — to diversify geographically.
But the TSMC expansion projects now underway in Japan and the US will take time to get going at full speed and US companies such as Micron Technology Inc. still have major activities on the island.