The earthquake in Taiwan is unlikely to cause any significant supply chain disruptions in the electronics industry. This is after a 7.4 magnitude earthquake rocked the island nation and forced the chip giant, Taiwan Semiconductor Manufacturing Co. to halt operations. As 70-80 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 wait and watch approach, as impact of the disruption continues to be assessed and filter through. 

Taiwan produces 80-90 per cent of the high end chips in the world. Within which 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.” Which means that the Indian electronics sector is going to see minimal disruption. 

Tarun Pathak, director, Counterpoint Research said, “We anticipate minor to potentially moderate impact on chip production capacity, depending on the final assessment of damage. This could lead to maybe a max week or or so of delay 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 Vice President 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.” At the moment, Singh reported the impact to the supply chain to be minimal.

A few smartphone and laptop makers that businessline spoke with, were also not too concerned with factory disruptions at TSMC. An executive from global smartphone brand told businessline that they are seeing no immediate impact, however, chip makers still need to update customers on the impact. 

With inputs from Sindhu Hariharan 

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