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Taiwan’s IC Foundry Hold Its Ground Despite Earthquake Risk

By Korbin Lan
Published: Feb 11,2016

TAIPEI, Taiwan - The earthquake occurred on February 6 in Tainan, Taiwan, leading to more than fifty people were killed and hundreds injured, while undermining the part of the fab plant of TSMC. Which resulting in TSMC's Fab 6 and Fab 14 had to shut down to recover for more than three days, once triggered disruption risk of global semiconductor manufacturing chain.

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According to IC Insights, Taiwan and Japan accounted for 39% of global IC capacity in December of 2015. Both countries are considered entirely seismically active, and have large amounts of IC capacity exposed to potential earthquake damage.

As shown in Figure, 64% of pure-play IC foundry capacity is located in seismically active regions. Since two of the largest pure-play IC foundries in the world (TSMC and UMC) have such a significant presence in Taiwan, a disastrous earthquake or typhoon in that country would have serious ramifications for the entire electronics supply chain.

A few years ago, IC Insights was contracted to perform a proprietary market research report for a large insurance company. This company wanted to develop a model that showed how much in electronic system sales would be lost if the fabs in Taiwan were shut down for one, two, or three months due to damage caused by an earthquake or typhoon.

IC Insights noted, as of December 2015, roughly half of the world’s total IC wafer production capacity was located in seismically active areas (defined as areas having moderate to high risk of being significantly impacted by earthquake tremors).

In fact, since the entire Taiwan island located in seismically active areas and had been through several large-scale earthquake in the past. Therefore, Taiwan's IC foundry have very high level standards in terms of the seismic protection of equipment and personnel, where can be said that the best place of Taiwan on disaster resilience, to avoid comprehensive shutdown of manufacturing in any situation.

From the experience and technology development stand points, the earthquake still have huge potential to cause serious disasters, but Taiwan's major IC foundries still have enough abilities to take account of their own operations.

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