Semiconductor supply chain remains secure despite Taiwan earthquake

Via Metal Miner

Reports indicate that the earthquake that struck Taiwan on April 2 is unlikely to create supply or manufacturing difficulties for Taiwanese semiconductors (microchips), which could subsequently impact the automobile sector and steel prices.

“I have not heard of any impact on the industry due to the earthquake,” one steel trader told MetalMiner. The earthquake's strength recorded 7.2 on the Richter scale. The earthquake occurred off the eastern coast of Taiwan near the city of Hualien, killing 13 people and injuring about 1,100 others.

Taiwan itself produces more than half of the world's semiconductor supplies. The global automotive sector is also a major end user of semiconductors, estimated at up to 15% due to the increasing integration of electronic systems and features into cars.

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Operations were quickly resumed after the earthquake, ensuring the stability of the supply chain

According to an April 3 report from Data Center Dynamics, Taiwan Semiconductor Manufacturing Company (TSMC), one of the world's largest companies, temporarily shut down operations and evacuated its factories after the earthquake. However, the South China Morning Post reported on April 4 that TSMC resumed operations the next day. United Microelectronics Corporation also noted that the earthquake triggered automatic safety measures at its production sites in Hsinchu and Tainan in southern Taiwan.

“At this time, operations and chip shipping are resuming as usual, and there will be no material impact on UMC’s finances and business,” that company said in an April 3 press release. While Hualien Port suspended operations the previous week, reports citing the Taiwan Maritime and Ports Bureau said other ports on the island suffered little damage.

Other factors affecting demand for semiconductors in Taiwan

A slowing economy and higher interest rates from the European Central Bank are just some of the factors holding back prices of hot rolled coils on the continent. Mills in northern Europe are offering €650-660 ($705-715) per metric ton EXW as of April 4, down from €700 ($760) in late March, a MetalMiner source said. It is not yet clear how this might affect Taiwan Semiconductor Corporation or other chipmakers.

A March report from the European Automobile Manufacturers Association (ACEA) indicated that car factories within the EU produced more than 12.1 million new units in 2023. This reflects an 11.3% year-on-year increase from 10.9 million units. The ACEA report also noted that battery electric vehicles accounted for 14% of that volume, representing a 37% increase over the year.

Written by Christopher Revitoso

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