The recent 6.4-magnitude earthquake in Taiwan did not cause significant damage to TSMC and its fabs, but it still required the company to halt production and will probably mandate that it recalibrate its tools. ComputerBase reports that up to 20,000 wafers in mid processing could be affected.
A 6.4-magnitude earthquake struck southern Taiwan at 12:17 AM on Tuesday, centered in Dapu Township, Chiayi, and 9.4 km deep. TSMC evacuated staff from its central and south production sites and halted production. Tremors were strongest at level 5 in the Southern Taiwan Science Park and level 4 in the Central Taiwan Science Park, while Hsinchu facilities recorded milder level 3 tremors.
Key sites affected include TSMC's Fab 18 in the Southern Taiwan Science Park, a major hub for 3nm production; Fab 8, a 200mm fab; and Fab 14, which produces chips on 4nm and 5nm-class fabrication technologies, reports TrendForce. Apparently, the production disruption could affect up to 20,000 wafers that were being processed at these fabs. Some of these may be completed but most will likely be scrapped, which will disrupt shipments of chips to at least some companies, meaning lower than-expected availability of some products.
The affected 10,000 to 20,000 wafers represent a small fraction of TSMC's production. The company processed 3.418 million 300-mm equivalent wafers in the last quarter, and its average daily output is around 37,000. Hence, the earthquake will not significantly affect TSMC's financial situation. However, if a fabless company loses a batch of its processors, that might hurt its sales.
Regarding TSMC's fabs, inspections revealed no structural issues or disruptions to utilities like electricity and water. The buildings are designed to withstand earthquakes up to magnitude 7, so this most recent quake was hardly a big problem for TSMC. However, high-precision chipmaking tools installed in the factories are considerably vulnerable. Even though machines are designed to absorb vibrations, they are calibrated to make chips, and right now, they might need a recalibration, which will take time. The good news is that some costs will likely be offset by insurance. Despite the disruptions, TSMC is expected to resume full production swiftly.
A similar event in April 2024 caused TSMC losses of $92 million. At that time, equipment in areas with magnitude 5+ tremors required three days to return to normal, and some wafers being processed were lost.
