Taiwan’s Preparedness Prevents a Supply Chain Disaster

Written by Lexi Dean | April 8, 2024

On Wednesday morning Taiwan experienced a 7.4-magnitude earthquake, the strongest to hit the island in a quarter of a decade. After about 300 aftershocks in the following 24 hours, it is reported that the quake killed 10 and injured more than 1,000 people. Hualien County, near the epicenter of the island, was most affected, but the whole island experienced an earthquake. One building completely collapsed, about 15 buildings partially collapsed, and 67 buildings were damaged. The earthquake caused at least 9 landslides that affected a major highway with partial road collapse. Taiwan’s rail services halted, airlines canceled and delayed flights, and hundreds of thousands of homes lost power. 

Taiwan is the world’s hub for chip production and leads the semiconductor manufacturing that forms a vital organ in the global electronics supply chain. The leading semiconductor producer, Taiwan Semiconductor Manufacturing (TSMC), makes chips for companies like Apple and Nvidia. The equipment used to produce these chips is delicate and requires specific care instructions and a controlled environment to ensure the material can be used. Amidst the earthquake, TSMC briefly evacuated and suspended work at some plants. Suspending production for any amount of time for safety inspections will have an impact on the global supply chain. In mitigating the impacts of the earthquake, TSMC must take careful action to uphold standards of production. Thankfully for TSMC, initial inspections showed that safety systems were operating normally, and no critical tools were damaged. The semiconductor manufacturer, as well as Taiwan as a whole, drew on past incidents, like the 1999 Chi-Chi earthquake in Taiwan and the 2011 earthquake and tsunami in Japan, to improve upon reactions and systems to handle situations like this. In response to these, Taiwan refined early warning systems, updated building codes, and prioritized highly trained search and rescue teams and medical centers to better reduce the impact of future disasters. Like the rest of Taiwan, TSMC’s preparedness prevented what would have been a severe disruption to the electronics supply chain which would have major implications on the international stage. A shutdown could have tremendous impacts on production and costs, but with safety systems and preparation strategies in place, reports describe this as only a “short-term hiccup” in the supply chain.