Taiwan earthquake unlikely to dent Indian electronics sector
Industry insiders in wait-and-watch mode as impact gets assessed
The earthquake in Taiwan is unlikely to cause any significant supply chain disruptions in the electronics industry. This is after a 7.4magnitude earthquake rocked the island nation and forced the chip giant, Taiwan Semiconductor Manufacturing Co (TSMC) to halt operations. As 7080 per cent of the machinery was back online less than 10 hours after the earthquake hit, the Indian electronics ecosystem expects a minimal supply chain impact, with no tangible effects on production. Nevertheless, industry insiders told businessline that they are adopting a waitandwatch approach, as impact of the disruption continues to be assessed and filter through.
Taiwan produces 8090 per cent of the highend chips in the world. Of these, TSMC is the largest chip maker in the world producing advanced chips for Apple and Nvidia.
Hours after the island experienced its largest earthquake in 25 years, triggering tsunami warnings, the chip maker was forced to evacuate its workers. The factory restarted production in less than 10 hours, by Wednesday night itself.
By Thursday morning, workers were allowed to return to the factory floor. Early statements by TSMC report minimal damage to machinery, with, “no damage to our critical tools including all of our extreme ultraviolet lithography tools.” This means that the Indian electronics sector is going to see minimal disruption.
MINIMAL IMPACT
Tarun Pathak, Director, Counterpoint Research, said, “We anticipate minor to potentially moderate impact on chip production capacity, depending on the final assessment of damage. But being a slow season, the overall impact would be minimal. We understand that TSMC is currently undergoing inspections to assess the overall impact on its facilities.”
Navkendar Singh, Associate VicePresident at IDC India, added that even if there is a supply chain impact it will not be seen immediately, as large electronics firms place orders a few quarters ahead. “Significant supply chain disruptions would only be expected if this disruption was to last more than a week, in case after shocks etc occur.”
A few smartphone and laptop makers that businessline spoke with were also not too concerned with factory disruptions at TSMC.