The latest Taiwan Earthquake is known to be the most significant in the last 25 years. Taiwan has been the ‘Epicenter of Semiconductor Manufacturing’ but the chip industry is cribbing again on chip supplies.
Several government officials have been urging chipmaking companies to expand and diversify their production lines out of Taiwan and not concentrate just on the Taiwan Chip Industry. These concerns have sparked again as Taiwan was lately rocked by a gigantic earthquake of 7.4 Richter scale.
Also, many experts have shared concerns that because of the Taiwan Earthquake, many consumer electronics including mobile phones, personal computers, and virtually all other electronic devices might get pocket-heavy in the coming months.
The latest Taiwan Earthquake is known to be the most significant in the last 25 years. Therefore, Taiwan Semiconductor Manufacturing Co. (TSMC) and its rival, United Microelectronics Corp. (UMC), have taken the necessary steps to evacuate extensive portions of their factories.
The Taiwan Earthquake has resulted in a state of uncertainty surrounding chip production as the global leader strives to advance chip manufacturing.
TSMC, the main contract chipmaker for major tech companies such as Apple and NVIDIA, have already relocated their employees from certain regions.
The company mentioned that they are currently assessing the consequences of the Taiwan Earthquake recorded 7.4-magnitude near the eastern shore islands. Likewise, UMC halted operations at select factories and evacuated buildings in its Hsinchu and Tainan locations.
TSMC and ASE Dominance
Taiwanese companies such as TSMC and ASE Technology Holding Co. are dominating players in the worldwide semiconductor industry. These semiconductor companies produce chips for a wide range of products including iPhones and various automobile companies.
Reports suggest that approximately 80-90% of silicon chips used in smartphones and AI-powered supercomputers are manufactured in Taiwan, either as completed SoCs or silicon wafers.
The impact of the Taiwan earthquake on the island’s tech firms is still being evaluated, as it destroyed numerous buildings on the eastern side and resulted in the deaths of at least four individuals.
TSMC in Evacuation Mode
This week, just after the Taiwan Earthquake, TSMC announced that employees were gradually returning to evacuated locations, but emphasized that the situation was still under assessment.
However, any disruption in production poses a risk to the meticulous process, particularly for advanced semiconductors, which necessitate continuous isolation in a vacuum for extended periods, as noted by analysts at Barclays.
Due to the constant chances of Taiwan earthquakes, along with the frequent occurrence of minor seismic activity affecting Taiwanese factories, a significant tremor has the potential to destroy complete sets of meticulously crafted semiconductors.
India’s Advantage for Becoming Global Supply Chain for the Taiwanese Semiconductor Industry
In July, 2023, Deputy Minister Kao Shien-Quey of Taiwan’s National Development Ministry highlighted that prominent Taiwanese technology companies are considering India as a crucial location to enhance their worldwide supply chains.
He emphasized the significant potential for cooperation between New Delhi and Taipei in the fields of emerging and essential technologies, such as semiconductor manufacturing and electronic equipment production, as reported by the news agency Press Trust of India.
Kristy Tsun-tzu Hsu, the director of Taiwan ASEAN Studies Center at Chung-Hua Institution of Economic Research, emphasized the significance of India for Taiwan and highlighted the intention of Taiwanese companies in China to “decouple” the global supply chain from that nation, while still ensuring its continuity for domestic consumers.
At around the end of 2022, India was known to have been approached by Taiwan to discuss the possibility of sharing chip-manufacturing technology.
Numerous Taiwanese firms plan to establish manufacturing facilities at two industrial parks in India dedicated exclusively to top industries from Taiwan.
But till now nothing concrete has been shared by the Indian Ministries and stakeholders on how we can take a prominent position in the time of ‘Semiconductor Displacement’ and create an ecosystem for chip manufacturing in India.
The global semiconductor shortage was worsened by the COVID-19 pandemic, revealing vulnerabilities in the global supply chains for silicon chips. In addition to facing a significant chip deficit, industries worldwide had to contend with chips being sold at prices 3-4 times higher than the standard rates.
The Story Was Developed With Inputs From, Firstpost | The ET
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