Taiwan Earthquake: Minor Impact on Wafer, DRAM Capacity
In response to the recent 7.3 magnitude earthquake in the waters off Hualien County, Taiwan, on the morning of the 3rd, the latest updates reveal that the majority of semiconductor wafer foundries in Taiwan are situated in areas where the seismic intensity reached level four. However, due to the implementation of rigorous construction standards and cutting-edge seismic mitigation measures within Taiwan's semiconductor facilities, the impact of the earthquake on the semiconductor supply chain of Taiwan is relatively minor.
According to research conducted by market analysis firm TrendForce, the impact of the earthquake on semiconductor manufacturers primarily resulted in temporary shutdowns for inspections, followed by prompt resumption of operations. Despite instances of emergency shutdowns or damage to furnace pipes due to the earthquake, leading to the breakage or destruction of wafers, the mature process fabs currently operate at an average capacity utilization rate of 50-80%. Hence, most losses can be swiftly recovered after resuming operations, with the capacity loss being relatively minor.
Taiwan Semiconductor Manufacturing Company (TSMC) stated in a press release last night that within 10 hours after the earthquake, the equipment recovery rate at wafer fabs had exceeded 70%, with newer fabs such as Fab 18, responsible for producing 3nm and 5nm wafers, achieving a recovery rate of over 80%. While some equipment in certain fabs suffered damage, impacting production lines, major equipment, including all extreme ultraviolet (EUV) exposure devices, remained undamaged.
However, TSMC emphasized that the company has allocated resources to expedite full recovery and has been continuously resuming operations. TSMC will maintain close communication with its customers, monitoring the situation closely and communicating any relevant impacts promptly.
Regarding DRAM production, Nanya Technology's Fab3A in New Taipei and Micron's facility in Linkou were relatively more affected by the earthquake. Nanya Technology's facility mainly produces 20/30nm products, with the latest 1Bnm process under development. Micron's Linkou facility, along with its Taichung facility, serves as important DRAM production bases. While operations have been consolidated into a single site, the facility has resumed production with the latest 1beta nm process, although full recovery of HBM production in Taiwan may take several days. Other fabs are gradually resuming operations after inspection shutdowns. Powerchip Semiconductor Manufacturing Corp. (PSMC) and Winbond Electronics remain unaffected.
In terms of wafer foundries, TSMC's fabs, including Fab2/3/5/8, R&D headquarters Fab12, and the latest Fab20 in Baoshan, are all located in the seismic intensity 4 zone in Hsinchu. Only Fab12 reported partial equipment damage due to burst water pipes, mainly affecting the yet-to-be-commercialized 2nm process. However, short-term operations are unaffected, albeit with a slight increase in capital expenditure expected due to the need to purchase new equipment for water-damaged machinery. Other fabs have resumed operations after inspection shutdowns, with no significant damage reported. Some fabs had evacuated personnel or executed inspection shutdowns but have since resumed operations.
Currently, high-capacity utilization fabs at TSMC for 5/4/3nm advanced processes did not require personnel evacuation, with inspection shutdowns being resolved within 6-8 hours after the earthquake, and operations are now restored to over 90% capacity, maintaining the situation within manageable limits. Regarding CoWoS fabs, the main operating sites are Longtan AP3 and Zhunan AP6, which immediately conducted personnel evacuations during the earthquake. Post-inspection, some water damage was found in the facility's cooling water mainframe, but the facility's backup systems ensured continued operation, and production has since resumed.
Additionally, United Microelectronics Corporation (UMC) operates a 6-inch fab and six 8-inch fabs in Hsinchu, with an additional 12-inch fab in Tainan, primarily producing in the 90-22nm range. Powerchip Semiconductor Manufacturing Corp. (PSMC) operates 12-inch DRAM and 8-inch and 12-inch Foundry fabs mainly in the Hsinchu-Miaoli area, with DRAM focused on 25/21nm process niche products. Vanguard International Semiconductor Corporation operates three 8-inch fabs in Hsinchu and one in Taoyuan. Most of these fabs have gradually resumed operations after personnel evacuation and brief inspection shutdowns.
