On March 7th, a powerful 7.4 magnitude earthquake shook eastern Taiwan, causing a brief interruption in the production of the world’s most important semiconductor manufacturing center and threatening the global electronics supply chain.
Chip manufacturers like TSMC and UMC halted some of their semiconductor manufacturing machinery and evacuated personnel from the facilities. TSMC, which supplies chips to tech giants like Apple and Nvidia and represents over 60% of the semiconductor market share, experienced minor shaking levels at its main facilities near Taipei and in southern Taiwan compared to the epicenter, minimizing damages.
The company expects to resume production overnight at the affected facilities, with production delays estimated at 6 to 10 hours. As a top producer of advanced chips, any disruption in Taiwan’s chip manufacturing could have significant repercussions for the global technology and AI industry. The earthquake reminds us of the enormous vulnerability of a concentrated supply chain, a problem that OpenAI CEO Sam Altman aims to address with his global chip venture. In addition, many countries and companies have been planning for months to relocate chip production to the US, Mexico, and Europe.