Taiwan quake: Europe trembles over semiconductor supply

Taiwan saw its worst earthquake in 25 years on Wednesday morning, about 18 kilometres south of Hualien. Taiwan's Central Weather Administration estimated the quake to be at a magnitude of 7.2 although the US Geological Survey put it at a 7.4 magnitude.

So far, at least seven people have died, with more than 500 others injured and more than 100 buildings damaged. Tsunami warnings were also issued in Japan, Taiwan and the Philippines, leading to the cancellation of several flights. The warnings have now been lifted.

The quake has led to significant fears about semiconductor supply chains facing blockages and slowdowns in Europe. Taiwan accounts for more than 60% of current semiconductor supply worldwide, as well as more than 90% of the most advanced chips.

The chips are used in everything from mobile phones to automobiles, and are extremely sensitive to the smallest tremors. As such, these kinds of earthquakes can cause great damage to several batches of delicately made semiconductors.

The world's biggest semiconductor producer, Taiwan Semiconductor Manufacturing Company (TSMC), saw its shares slide 1.69% to €128.0, after having to halt production and evacuate personnel from some of its plants.

This was done to assess any potential damage to operations. The company later clarified that systems and plants were working as usual. The producer is a significant supplier to tech companies such as Nvidia and Apple.

TSMC said in a statement: "TSMC's safety systems are operating normally. To ensure the safety of personnel, some fabs were evacuated according to company procedure. We are currently confirming the details of the impact."

Another chip company, United Microelectronics, also had to pause operations and evacuate facilities in Tainan and Hsinchu.

In an email note to clients, IG said: "A powerful earthquake, the strongest to hit Taiwan in 25 years, struck the island which accounts for 90% of production for major chipmaker TSMC. Shares of TSMC and other Taiwanese tech companies like Foxconn and AU Optronics fell after the quake, reflecting investor concerns over potential disruptions.

"Serious damage to Taiwan's chip foundries could ripple through global supply