Taiwan Semi, A Key Supplier To Nvidia and Apple Springs Back To Action After Taiwan Earthquake

Taiwan Semiconductor Manufacturing Co TSM resumed construction work in earthquake-affected Taiwan after a brief halt for inspections. 

On Wednesday, Taiwan was hit by a 7.2-magnitude earthquake at 8 a.m. local time. Its epicenter was in Hualien, in eastern Taiwan, marking the most significant seismic event in the last 25 years. 

TSMC promptly evacuated its factories, threatening production capabilities at the world’s principal advanced chip maker.

Also Read: Taiwan Semi’s Cutting-Edge 3nm Chips in High Demand, Apple, Intel, and AMD Boost Orders

The company is crucial in the global semiconductor industry, supplying advanced chips to critical customers like Apple Inc AAPL and Nvidia Corp NVDA. 

Despite concerns about supply disruptions following the earthquake, TSMC confirmed that its safety systems were functioning correctly, Reuters reports.

Although TSMC evacuated some facilities, all staff returned to work safely. 

The earthquake resulted in partial operational impacts due to damage to a small set of tools, excluding vital chip-making equipment like extreme ultraviolet lithography tools, which are crucial for semiconductor production and cost over $150 million each. 

These high-value tools, produced by Dutch company ASML Holding ASML, remained unaffected. 

TSMC reported over 80% recovery of tool functionality across its fabs, with expectations for complete operational restoration, including at its newest Fab 18 in Tainan, by the end of the day.

Nvidia announced on Wednesday that, following discussions with its manufacturing partners, it anticipates no supply chain disruptions from Taiwan’s most significant earthquake in decades. 

Nvidia clarified, “Based on consultations with our manufacturing partners, we foresee no impact on our supply due to the earthquake in Taiwan,” Nikkei Asia reports.

Meanwhile, another key Nvidia supplier, SK Hynix, committed $3.9 billion to an advanced chip-packaging facility in West Lafayette, Indiana, to capitalize on the AI frenzy. 

The move marks the U.S.’s efforts to secure a leading role in semiconductor manufacturing, joining other Asian chip giants like TSMC.

TSMC stock gained 55% in the last 12 months. Investors can gain exposure to the stock via the VanEck Semiconductor ETF SMH and the Vanguard FTSE Emerging Markets ETF VWO.

Price Action: TSM shares traded lower by 0.11% at $139.51 premarket on the last check Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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