Massive Earthquake Hits TSMC, Potentially Ruining 20,000 Wafers!

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A recent earthquake in Taiwan, registering at a magnitude of 6.4, led to a temporary shutdown at TSMC, one of the world’s leading semiconductor manufacturers. Although the quake caused no major structural damage, the company was forced to stop operations and recalibrate equipment. According to ComputerBase, as many as 20,000 wafers in the midst of processing could be impacted by this event.

The earthquake struck the southern region of Taiwan just after midnight on Tuesday, with its epicenter located in Dapu Township, Chiayi, at a depth of 9.4 km. TSMC took immediate action by evacuating its staff from facilities in central and southern Taiwan and halting production. The tremors reached a level 5 intensity at the Southern Taiwan Science Park and a level 4 at the Central Taiwan Science Park. The company’s Hsinchu sites experienced less severe level 3 tremors.

Significant facilities affected included TSMC’s Fab 18 in the Southern Taiwan Science Park, which is pivotal for the production of 3nm chips; Fab 8, which handles 200mm wafers; and Fab 14, known for its 4nm and 5nm technology chips, as reported by TrendForce. The disruption could compromise the processing of approximately 20,000 wafers, potentially leading to the scrapping of many, thereby affecting deliveries to various clients and possibly resulting in shortages of certain products.

Despite the impact on these wafers, which represent a minor portion of TSMC’s output — between 10,000 to 20,000 out of 3.418 million 300-mm equivalent wafers processed last quarter — the financial outlook for TSMC remains stable. The company’s average daily production is around 37,000 wafers, underscoring the relatively small scale of the disruption. Nonetheless, the incident could affect the revenue of companies that rely on specific batches of processors.

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Post-earthquake inspections at TSMC’s facilities showed no significant damage to the buildings or utility disruptions, including power and water supplies. The structures are built to endure earthquakes up to magnitude 7, making the recent seismic event manageable. However, the delicate nature of chipmaking equipment, which requires precise calibration and is sensitive to vibrations, means recalibration is necessary and could take some time. Fortunately, some of the financial impact may be mitigated by insurance. TSMC is expected to quickly ramp up to full production capacity once again.

Previously, in April 2024, a similar seismic event cost TSMC approximately $92 million. Equipment affected by tremors of magnitude 5 and above took three days to recalibrate, and some of the wafers in production were irreversibly damaged.

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