Taiwan earthquake no big impact for local industry

KUALA LUMPUR: A negligible impact is expected from the recent Taiwan earthquake to semiconductor players locally.

This is because the earthquake had only stopped production for a short while and Taiwan Semiconductor Manufacturing Co (TSMC) said it would resume production, less than 24 hours after evacuating staff and halting operations following the event.

TSMC operates in the front-end of the overall semiconductor supply chain and is the main producer of advanced chips for Apple Inc and Nvidia Corp.

The company said late-wednesday that it had brought 70% to 80% of its machinery back online within 10 hours after the earthquake hit. According to TSMC, the quake damaged a small number of tools but the main factory’s critical components remain undamaged.

President of the Malaysia Semiconductor Industry Association Datuk Seri Wong Siew Hai said the powerful 7.2 magnitude earthquake on Taiwan eastern coast has affected most wafer fab factories located in the region.

“But I do not expect any immediate impact to factories in Malaysia due to available inventory and materials in the pipeline. Since the factories are back into operations, it is expected for the factories to work round the clock to catch up to ensure a minimum impact to their customers,” Wong said

Following the quake, Wong said the companies had prioritised the safety of its people first followed by ensuring the factory infrastructure and equipment are safe to operate.

Tradeview Capital Sdn Bhd chief investment officer Nixon Wong said the local supply chain has limited supply chain role with Taiwan based companies like TSMC and United Mic tro electronics Corp.

“Malaysian semiconductor players have less exposure to Taiwanese customers, so the impact on our local players are deemed minimal,” Nixon said.

He also pointed out that TSMC’S plant was designed to withstand strong earthquakes of up to magnitude of seven.