TSMC Demonstrates Exceptional Resilience Following Earthquake

TSMC’s Taichung factory faced the brunt of the earthquake on April 3. (Wikimedia Commons)

Taiwan’s April 3 earthquake tested Taiwan Semiconductor Manufacturing Company’s (TSMC) resiliency planning as the quake disrupted transportation, communications, and power supplies across the country. Reuters reports that the 7.2-magnitude earthquake, centered in Hualien, killed nine people and injured 500, marking the country’s biggest earthquake in 25 years.

Semiconductor fabrication plants are particularly sensitive to earthquakes because producing semiconductor wafers requires precision on the scale of nanometers. However, within 10 hours, TSMC recovered over 70% of its tools, according to Global SMT. By April 5, TSMC brought the vast majority of its tools back online.

TSMC’s recovery speed can be attributed to its efforts to build safeguards and redundancies in its fabrication plants following Taiwan’s 7.6-magnitude earthquake in 1999. EE Times writes that the 1999 quake rocked Taiwan’s electronics manufacturing industry and shut TSMC down for nearly two weeks. Taiwan’s location in the Pacific “Ring of Fire,” “the most seismically and volcanically active zone in the world,” makes it particularly earthquake-prone, according to the Washington Post. Therefore, TSMC modernized its fabrication plants to exceed Taiwan’s 

building codes for such factories. Dampers and seismic isolation platforms now protect the company’s sensitive equipment from earthquake shocks. According to Nikkei Asia, the company also maintains in-house seismographs that require staff to evacuate from cleanrooms during earthquakes until their central monitoring systems determine that no chemicals have leaked.

TSMC also supported Taipower, Taiwan’s state-run electric power company, which faced blackouts in the aftermath of the earthquake. Narrowly avoiding a power outage across Taoyuan, Taipower used TSMC diesel generators to produce additional electricity as it continued to recover from the earthquake’s infrastructure damage, according to Commercial Times.

The earthquake in Taiwan raised concerns among the international community about overreliance on Taiwanese semiconductor production. While TSMC recovered extraordinarily quickly, geopolitical tensions in the Taiwan Strait also threatened to cut off the global chip supply. A working paper from the U.S. International Trade Commission revealed that Taiwan possesses 92 percent of global advanced chip manufacturing capacity, so serious disruptions would leave ripple effects across the globe. 

As a result, states have begun developing semiconductor fabrication plants within their own borders. While China suffers from restrictions of U.S. export controls in limiting its access to modern chip production equipment, companies like Semiconductor Manufacturing International Corporation (SMIC) are quickly expanding production capacity for older-generation chips, according to the South China Morning Post. Meanwhile, the Washington Post reports that the United States recently granted TSMC $6.6 billion and Samsung $6.4 billion to build manufacturing facilities in Arizona and Texas respectively. TSMC’s success in responding to the April 3 earthquake may not prevent the growing trend of countries onshoring their semiconductor manufacturing capacity but does dispel fears of Taiwan’s frequent earthquakes threatening international supply chains.