How was the damage to Taiwan's electronics industry after the Hualien earthquake?

　　China News Service, April 4 (Xinhua) According to Taiwan media reports, after a strong earthquake occurred in Hualien, Taiwan on the 3rd, the disaster disrupted Taiwan's semiconductor industry and panel production. Many wafer factories and panel factories were shut down due to the earthquake.

　　Taiwan's wafer fabs are mainly located in Hsinchu, Taichung and other places, and they were all affected by the earthquake, with hundreds of aftershocks. TSMC and other wafer production lines have experienced chip breakage and shutdowns, which has affected NVIDIA's AI chip manufacturing, and memory manufacturers such as Samsung have suspended quotations for this reason. Market estimates put the value of wafers affected by the strong earthquake at Taiwan's seven major wafer fabs at over NT$10 billion.

It is reported that a strong earthquake occurred in the waters of Hualien County, Taiwan on the morning of the 3rd. Hualien County, which is close to the epicenter, was severely affected. Many houses in the urban area collapsed and there were casualties. Photo by China News Service reporter Yang Chengchen

　　According to the disaster prevention regulations for clean rooms such as semiconductor and panel factories, if an earthquake of magnitude 4 occurs in the factory area, the machines will automatically shut down and clean room personnel must be evacuated. After the earthquake, almost all seven of Taiwan's major wafer fabs, including TSMC, Advanced Micro Devices, UMC, Power Semiconductor Manufacturing Co., Ltd., Nanya, Winbond, and Macronix, experienced production line fragmentation and shutdowns.

  TSMC data map. Image source: Taiwan's "United Daily News"

　　In this regard, TSMC stated that based on its rich experience and capabilities in earthquake response and disaster prevention, and regular safety drills to ensure complete preparations; the current recovery rate of wafer fab equipment has exceeded 70%, and newly built wafer fabs such as chip The recovery rate of 18 factories has exceeded 80%. Although a small number of equipment in some factories were damaged and affected the production of some production lines, the main machines, including all extreme ultraviolet (EUV) lithography equipment, were not damaged; resources are currently in place to accelerate full recovery and continue to resume work. middle.

　　World Advanced said that as of noon on April 4, about 80% of the affected machines had returned to normal and production operations would be gradually resumed. The company notified affected customers as soon as the earthquake occurred and maintained close contact with them.

　　Power Semiconductor Manufacturing Co., Ltd. responded that no one was injured and no production lines were interrupted. Winbond pointed out that it evacuated its employees as soon as possible on the 3rd, and after some of the production line machines were shut down and confirmed that there were no problems, production resumed.

　　According to industry insiders, the yellow light area in the fab is most afraid of earthquakes. After the strong earthquake on the 3rd, the yellow light areas in all fabs are bound to be affected, and equipment such as furnace tubes cannot escape the impact. The wafers on the production line must be scrapped and started over. In addition, the extreme ultraviolet light used in advanced processes (EUV) is precisely designed and the production line must be suspended for maintenance. Moreover, aftershocks will continue thereafter, which will interfere with the recovery of the production line and affect the production and output of the wafer fab.

　　The industry pointed out that judging from the statements of various factories on the 3rd, it will take 4 to 5 days for each factory to take stock of the impact of the wafer foundry, and major factories have also urgently dispatched more equipment engineers in shifts to deal with it.

　　The earthquake in Taiwan attracted the attention of foreign media and scholars, especially the impact on wafer manufacturing. The British Financial Times (FT) Lex column pointed out that the earthquake in Taiwan reminded the global wafer supply that it is exposed to the significant risk of earthquakes. Bloomberg News reported that Taiwan is the largest producer of advanced wafers. If the wafer factory is in trouble, it will directly affect the global technology industry and wafer supply, affecting AI, electric vehicles, etc.

　　Shihoko Goto, director of the Indo-Pacific Program at the Wilson Center, an American think tank, pointed out that the scale of Taiwan's earthquake may bring more serious disasters, but the surprising and promising news is that the extent of the earthquake's damage was relatively limited.

How much impact will the earthquake have on Taiwan's panel factories?

　　After the earthquake, the production of Taiwan's panel factories such as AUO, Innolux and Caijing was simultaneously affected. TrendForce, a research organization, released a report on the evening of the 3rd, stating that the earthquake will affect the production capacity of Taiwanese panel factories for about 1 to 2 days. Recently, panel quotations have steadily increased, and the impact on the production capacity of Taiwanese factories will make the trend of panel prices more volatile. Support, favorable quotes continue to rise.

　　Taiwan's panel factories are all located on the west coast of the island, from Hsinchu in the north to Tainan in the south. The anti-shock mechanism of the production line was activated immediately, causing the machine to shut down. Taiwan's three major panel manufacturers Innolux, AUO and Caijing all stated on the 3rd that after the earthquake, they evacuated employees in accordance with regulations and that personnel were safe; some machines in the factory started protective automatic shutdowns and were conducting system inspections after the earthquake. Operational impact is minor.

　　However, after an investigation by TrendForce, it was found that all AUO machines were shut down for maintenance and are being restored one after another. Except for Innolux's Fab6 factory, which was slightly affected, other factories had a large number of downtime machines.

　　Considering that panel manufacturers have different factory conditions, TrendForce estimates that the earthquake will affect the production of all panel factories in Taiwan for at least 1 to 2 days. If calculated as 2 days, it is estimated that it will affect about 1.2% of the production area in April, plus The earthquake affected a wide area, and almost all factory areas were affected. It is estimated that the production of all applications may be affected to a certain extent.

　　TrendForce pointed out that due to the current strong demand for TV panel stocking, the overall capacity utilization rates of AUO and Innolux are expected to increase to 85% and 83% respectively in April. However, affected by the earthquake, the possibility of further reductions in capacity utilization cannot be ruled out, resulting in another reduction in output.

　　TrendForce analyzes that currently panel factories that mainly produce TV panels are operating at full capacity. It is estimated that due to the impact of the earthquake, some TV panel shipments may be affected.

　　TrendForce originally expected that TV panel prices would maintain an upward trend in April, but demand for small and medium-sized TV panels has slowed down. After the earthquake yesterday morning, we will continue to pay attention to whether the rising momentum of small and medium-sized TV panel prices can continue into May.

　　TrendForce believes that the current influence of Taiwanese panel factories on TV panel prices has declined. Therefore, unless the impact of the earthquake on the production line shutdown lasts for more than a week, the impact on the development trend of TV panel prices will be limited.