Data News > Taiwan Earthquake and Tsunami Warnings Rattle Semiconductor Industry

Taiwan Earthquake and Tsunami Warnings Rattle Semiconductor Industry

By KlickAnalytics Data Insights  |   April 3, 2024 10:01AM ET

Key Points

- A 7.5 magnitude earthquake hit Taiwan, causing casualties and financial market disturbances
- Intel's stock fell 5% due to losses in its contract chip-making business
- Taiwan Semiconductor Manufacturing Co. (TSMC) evacuated some plants but workers are returning
- TSMC's revenue is forecasted to increase, driven by advanced chip manufacturing processes
- TSMC's market share declined in Q2 2023 but recovered in Q4 2023, remaining the dominant leader

Just before midnight today (in GMT), Taiwan was struck by a powerful earthquake with a magnitude of 7.5 on the Richter scale, resulting in at least nine casualties and causing significant disruptions in the financial markets. The semiconductor industry, in particular, is expected to face additional strain due to the earthquake and subsequent tsunami warnings, according to Joseph Dahrieh, an industry expert.

The earthquake had immediate repercussions on the stock market, with Intel experiencing a 5% drop in its shares before the opening bell on Wednesday. This decline was attributed to mounting losses in the company's contract chip-making business, highlighting a substantial gap between Intel and its rival, Taiwan Semiconductor Manufacturing Co. (TSMC).

In addition to Intel, other chip stocks such as Taiwan Semi, ASE, and United Microelectronics were also impacted by the earthquake, experiencing a downward trend in their stock prices. Despite this, TSMC has reported that it has evacuated some of its plants, but workers are now returning to resume operations.

Looking ahead, the semiconductor market's revenue is projected to increase at a rapid pace, which is expected to benefit TSMC. The company's move towards more advanced chip manufacturing processes to meet the growing demand for AI-related chips is seen as a positive development that could contribute to its future growth.

While TSMC faced challenges in the first half of 2023, including sluggish shipment growth and reduced orders from major clients, the company managed to recover its market share in the latter part of the year. TSMC's dominance in the market is attributed to its advanced process technology, strong customer partnerships, and a strategic focus on AI chips.

the recent earthquake in Taiwan has not only caused immediate casualties and financial market disturbances but has also raised concerns about the impact on the semiconductor industry. Despite the challenges, TSMC remains well-positioned to navigate through these turbulent times and sustain its robust growth trajectory.

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