Taiwan started a rotational electricity blackout across the country on Thursday following a major incident at a coal-fired power plant in southern Taiwan that caused its shutdown. The outages have not affected TSMC, the world's largest contract maker of chips, other foundries, and DRAM makers. However, chip packaging houses had to halt operations briefly.
Taiwan's high-tech manufacturing, which serves the lion's share of the world's need for chips, is crucially dependent on electricity supply. According to Reuters, Taiwan Semiconductor Manufacturing Co. admitted that some of its facilities suffered a 'brief power dip,' but power had been restored. According to DigiTimes, United Microelectronics Corp.'s fabs located in southern Taiwan also suffered a voltage drop, yet this did not interrupt production.
Taiwan is home to several major contract makers of semiconductors, including TSMC, UMC, Vanguard International Semiconductor (VIS), and Powerchip Semiconductor Manufacturing Corp (PSMC). At this point, they control 56% of the global contract chip production, so any issue they experience can become global.
Semiconductor production facilities usually run on diesel generators during brief power dips, but these cannot feed the power hungry fabs for long. Neither TSMC nor UMC had to shut down any fab because of the controlled blackout. TSMC said that it had seen "no major impact so far." Just like the top contract chipmakers, smaller contract producers of semiconductors in Taiwan, namely VIS and PSMC, did not run into any problems, according to reports from DigiTimes and TrendForce.
There are also multiple DRAM fabs owned by Micron and some independent manufacturers like Nanya, accounting for about 21% of the global output. NAND production is not Taiwan's strong side, but some makers produce specialty flash memory. Fortunately, production at all DRAM and NAND fabs was not interrupted, yet some companies confirmed voltage drops.
Several companies, including AU Optronics and Innolux, produce LCD panels in Taiwan. Like semiconductor fabs, LCD production facilities cannot be shut down even for a short time without any impact. Therefore, blackouts can certainly affect supplies. The good news is that neither AUO nor Innolux had to halt operations anywhere in Taiwan because of the blackouts.
ASE Technology, the world’s largest outsourced semiconductor assembly and test provider, confirmed that its operations had been affected. ChipMOS Technologies also informed that its gold bumping lines were impacted by the blackouts but did not elaborate.
According to a statement by the Ministry of Science and Technology cited by Bloomberg, all three major science parks in Taiwan were at least partly affected by the blackouts. Obviously, Southern Taiwan Science Park (STSP) was affected the most. Meanwhile, the administration of STSP said that 7 out of 40 companies located in the park were affected by the power blackout.
A major failure at the coal and gas-fired Hsinta Power Plant in Kaohsiung that required its shutdown occurred at 2:47 PM local time (2:47 AM ET). At around 3 PM, Taiwan residents received an emergency alert about the incident, reports Taiwan News. According to Reuters, the notice said that the country did not have enough electricity capacity in the power grid and that the government began a rotational electricity blackout across the country.
Taipower said that the rotational outages would continue until at least 4:40 PM and that six million homes were hit by blackouts, though this seems to be an underestimate as Taipei went black at 3:15 PM.