A. Background Information on the April 3rd Earthquake

On the morning of April 3rd, 2024, at 7:58 AM, a magnitude 7.2 earthquake struck, with its epicenter located 25.0 kilometers south-southeast of the Hualien County , in the eastern waters of Taiwan. The earthquake had a depth of 15.5 kilometers. The seismic intensity reached level 6 in Hualien, level 5 in Yilan and Miaoli, level 4 in New Taipei City, Taichung, level 5 in Changhua, Nantou, and Hsinchu County, while other areas reached level 4. Only the western outlying islands experienced levels 1 to 3. Taiwan's semiconductor industry is primarily concentrated in the western part of the island, including the Hsinchu Science Park, Taichung Science Park, and Tainan Science Park, which are not in the epicenter region of this earthquake.

B. The Impact of the April 3rd Earthquake on Taiwan's Semiconductor Manufacturing Industry

I.  Taiwan's Semiconductor Industry Holds Significant Influence over the Global ICT Industry

Taiwan's semiconductor industry has developed for over 40 years, boasting a complete supply chain and the world's most comprehensive semiconductor industry clusters with specialized division of labor. It leads globally in process technology and boasts a well-trained workforce.

In 2023, the semiconductor manufacturing industry in Taiwan achieved a production value of NT$2.6 trillion, with an estimated growth to NT$3.1 trillion in 2024, marking a 16.6% increase. Moreover, Taiwan held a commanding position in the global foundry industry in 2023, with a market share of 75.9%, ranking first globally. It serves as a crucial partner for international semiconductor firms, including major customers of TSMC such as Apple, NVIDIA, AMD, Qualcomm, MTK, and Broadcom, who utilize Taiwanese semiconductors for innovation in numerous electronic products.

The semiconductor manufacturing industry in Taiwan is concentrated in clusters such as the Hsinchu Science Park, Central Taiwan Science Park, and Southern Taiwan Science Park, with the Hsinchu Science Park holding the largest share. While companies in Taipei and New Taipei City mainly focus on semiconductor design, the headquarters of major semiconductor manufacturing companies are primarily located in the Hsinchu Science Park. Nevertheless, there has been a gradual increase in the capacity of fabs in the Central and Southern Taiwan Science Parks to mitigate potential risks arising from natural disasters.

II.  The Impact of the Earthquake on the Semiconductor Industry Clusters in Northern, Central, and Southern Taiwan

According to interviews with the Hsinchu Science Park Administration, there have been no abnormalities in water, electricity, or wastewater treatment facilities within the park. Additionally, in the Zhunan Park area, including facilities belonging to companies like Innolux, Powerchip, TSMC's Advanced Packaging Plant 6 (AP6), and Epistar, personnel have been evacuated, with some machines undergoing precautionary shutdowns, but no abnormalities have been reported.

Furthermore, employees at companies such as AUO and Macronix were also evacuated during the earthquake, with some machines undergoing precautionary shutdowns, but no abnormalities have been reported. Operations in Southern Taiwan Science Park are currently normal, with TSMC's Fab 18 measuring a seismic intensity of 4, but the facilities were reportedly unaffected by the earthquake.

United Microelectronics Corporation (UMC) has evacuated personnel in both the Hsinchu and Southern Taiwan Science Parks, with all personnel accounted for and facilities operating normally, although some machines are undergoing checks and restoration efforts are underway.

Vanguard International Semiconductor Corporation (VIS) stated that they promptly evacuated employees according to emergency response procedures, with no injuries reported. Employees will return to their positions once the environment is confirmed safe, while the actual impact on production is still being assessed.

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The Taiwanese semiconductor foundry industry holds a dominant position in the global market, with a market share of over 70%. Particularly in advanced processes below 3 nanometers, it has almost monopolized the semiconductor sectors such as Artificial Intelligence (AI), high-performance computing, and mobile communication.

If the production of Taiwanese foundries is interrupted by the recent earthquake, it will inevitably affect the global semiconductor supply chain. This could lead to delays in product deliveries, shortages in supply, and increased costs, causing ripple effects across various industries and impacting the stability of the global economy.

Following previous seismic events like the 921 earthquake, Taiwanese foundries have established detailed response plans and seismic management measures. These include evacuating facilities and inspecting them based on earthquake intensity. Although there may still be some impact on production and financial conditions, swift responses and safety measures will help minimize losses. The continuity of production in Taiwanese foundries is crucial for the stability and development of the global ICT industry.