Discover which industries may be impacted by the 7.4 magnitude earthquake in Taiwan, as well as current port closures and supply chain challenges.
Background on the Earthquake
On Wednesday, April 3, a 7.4 magnitude earthquake struck Taiwan. The quake was the biggest earthquake to hit Taiwan in 25 years. As of today, 13 are dead, more than a thousand are being treated for injuries, and six are still missing, according to CNN.
Following the earthquake, tsunami warnings were sent out in Taiwan, Japan, and The Philippines, but have since been lifted. These countries, along with Taiwan, are situated in the “Ring of Fire,” a global hot spot for earthquakes and tsunamis. Because of this, the island country has strict building codes and protocols for dealing with earthquakes. As a result of the quake, approximately 26 buildings have crumbled.
Impact on semiconductors and AI
The earthquake is expected to disrupt the supply of tech components like display panels and semiconductors. Taiwan is the global leader in semiconductor manufacturing, producing over 60% of the world’s semiconductors and over 90% of the most advanced chips. The majority of advanced chips are made by the Taiwan Semiconductor Manufacturing Company (TSMC), which makes chips for Apple and Nvidia.
Due to the highly sophisticated environment needed to manufacture chips, many semiconductor companies in Taiwan have temporarily paused production, even if they were not severely impacted by the earthquake. Taiwanese manufacturers have reinforced their factories against earthquakes for years, employing automatic shutdown systems to reduce damage to production and tools. These companies are using this time to perform safety inspections and should continue operations soon. Analysts note that most automated shutdown systems may take up to 36 to 48 hours for restoration.
The earthquake-related disruptions are likely to affect several Apple suppliers besides TSMC, but the long-term impact on the supply chain is expected to be minimal. Among Apple’s extensive list of suppliers, which represents 98% of the company’s expenditure, 41 companies have manufacturing facilities in Taiwan. Many of these suppliers are estimated to encounter some degree of disruption as a result of the earthquake, to some varying degrees.
Resilinc’s President of Government, Aerospace, and Defense, Peter Guinto, goes in-depth into the impact on semiconductor supply chains in this interview with Sourcing Journal: Taiwan Earthquake Ripple Effects ‘Might Not Be Known for Months’
Port closure and transportation
The quake has rendered the Port of Hualien inoperative due to damages sustained. Multiple wharfs at the port suffered bulging. These affected berths were crucial for handling tasks such as sand, bulk cargo discharge, and cruise operations. Notably, one pier collapsed by around 19 inches, prompting authorities to investigate a suspected rupture in an oil pipeline. Furthermore, an access road leading to the port incurred damage. Consequently, all port operations have been suspended, with vessels only permitted to depart, not enter. No damage has been reported at other ports across Taiwan, except for Hualien Port.
On April 4, a 6.0 magnitude struck off the East Coast of Japan. No tsunami warning was issued, but trains did temporarily stop following the quake. In Taiwan, several roads remain closed due to landslides, but railway service has largely resumed.
Building ‘anti-fragile’ supply chains
Resilinc clients are actively tracking and adjusting to potential impacts to over 13,000 sites and 5,800 parts that come from over 21,000 products, according to Resilinc supply chain data. Having the tools, data, and resources to act quickly in events like the Taiwan earthquake are key to building ‘anti-fragile’ supply chains. By being the first to act during supply chain disruptions, Resilinc clients become anti-fragile. Disruptions that impact their competitors allow them to gain a competitive advantage in a time of crisis. If you want to learn more about how Resilinc can help your supply chain become ‘anti-fragile’ schedule a demo here.
To learn more about the impact of the Taiwan earthquake and next steps supply chain managers and procurement pros can take to navigate risk, download our exclusive special report: Assessing Taiwan Earthquake’s Supply Chain Impacts and Potential Outlook.
