Around 4 a.m. on February 6, 2016, a 6.4 magnitude earthquake rattled southern Taiwan at the start of Lunar New Year, the island’s largest nationwide holiday. With a current death toll of 114, it is the deadliest earthquake to hit the island since the “921 Earthquake” of 1999. Taiwan is the world’s leading producer of semiconductors and integrated circuits (IC). As such, high tech companies are left to ponder how this earthquake could affect the global electronics supply chain. While initial reports of the quake emphasized minimal damage and interruption to the major chip foundries concentrated in southern Taiwan, there are less apparent global supply chain impacts that will likely be felt in the near future.
This analysis is organized into five parts:
- Summary of the earthquake event
- Review of the global importance of the Taiwanese IC industry
- Examination of the confirmed impacts to chip manufacturers on the island
- Discussion of interruption risk factors associated with modern chip fabrication plants
- Recommendations on how to mitigate impact to supply chains for future similar events