Omdia’s Taiwan earthquake impact assessment

After the recent earthquake in Taiwan, Michael Yang and the semiconductor team at Omdia assess the potential effects this event might have on the semiconductor industry in their latest blog.

On Friday, April 5, TSMC provided an update on its recovery efforts. Besides some minor equipment, no vital machines, such as its extreme ultraviolet (EUV) lithography  equipment, had been damaged. TSMC’s advanced manufacturing fab-18, located further south in Tainan and farther away from the epicenter, was less affected and is expected to  resume full production soon.

Previously, TSMC had announced that it was able to restart more than 70% of production lines within the first 10 hours. TSMC also said it retains its 2024 revenue view which indicates the impact was minimal. Other semi suppliers such as Micron, Nanya, UMC and others all reported some but mostly minimal loss. Full assessment, however, is still to be completed in the coming days.

Omdia’s comments:

We believe the semiconductor industry will see minimal impact from the Taiwan April 3 earthquake. Given the geographical locations of the semi fabs, especially TSMC’s Fab 18 in Tainan, current market dynamics including days-of-inventory and timing as it’s reasonably early in the year, supply constraints and minimal short term pricing concerns are not expected.

The mature and legacy manufacturing facilities, mostly in Hsinchu, will take longer to fully assess the impact and the eventual return to full production. However, the lower utilization under current market conditions eases product availability concerns.

Memory pricing is already heading north prior to the earthquake as it recovers from last year’s slowdown. Due to suppliers’ effort in reducing output, recent demand pickup will likely push up prices significantly in 2Q2024.

If your organization is impacted by any of the topics discussed in the blog, speak to one of our Omdia team members for further details on how we can support you.