World’s biggest chip manufacturer confirms no disruption as major quake jolts Taiwan

Taiwan Semiconductor Manufacturing Company (TSMC)- the world’s biggest chip manufacturer said the 6.9 magnitude earthquake that jolted Taiwan on Sunday, has had no major impact on its business.

TSMC is a contract manufacturer of semiconductor chips, used for powering phones, laptops, cars, medical equipment, telecom towers and many more.

Any disturbance in the supply chain of semiconductors would affect the production of automakers, who have battled to increment their production since the last  few quarters because of limited supply of such chips.

“There can be some interruption at the Tier-2 level of the supply chain in the manufacturing of the chips because of the quake. But as such we are not expecting any major disruption in supplies (of the chips themselves),” said a senior sales and marketing executive from one of India’s top car makers.

Over the last few weeks automakers have acknowledged a sharp improvement in availability of chips, which has led to a commensurate jump in vehicle production. However, they have cautioned that the supply chain is not fully out of the woods. The (semiconductor) crisis is in control to the extent that if the demand in the market is ‘X’, we might be slightly behind that ‘X’; not like 70% of what is needed,”

Shailesh Chandra, managing director, Tata Motors Passenger Vehicles

He said the crisis period for the chip market emerged when particular events like the Renesas fire in Japan and the outbreak of Covid-19 in Malaysia occurred.

“There seems to be no direct damage because of the earthquake. But there is some disruption in the foundry and one of the equipment had to be shut down and this is disclosed officially. But they later added that chip production is back to normal. But there will be some indirect impact because of the supply chain.”

Puneet Gupta, director, S&P Global

Indian automakers across categories are busy increasing output to deliver to customers as much as they can during the upcoming festive season. Sales during the 42-day festive period typically account for as much as 30% of the entire year’s volume.

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