The global impact of the Taiwan earthquake

The 7.4 magnitude earthquake, which hit Taiwan, collapsing dozens of buildings and causing the deaths of at least nine people, is considered the strongest to hit the country in 25 years. In addition to human losses, the earthquake also had a Significant impact on semiconductor production at some of the world’s leading chipmakers.

According to a report from Folha de S. Paulo, Taiwan is known as a leading producer of advanced semiconductors and plays a crucial role in the global economy. Any damage caused by the earthquake is a cause for concern as the island accounts for more than half of the global market for laptops, motherboards and networking devices.

Disruption in chip production

Analysts warn that some cutting-edge chips require continuous 24/7 operations. Therefore, disruption of operations in northern Taiwan’s industrial areas could result in damage to chips in production.

TSMC (Taiwan Semiconductor Manufacturing Co.), the world’s largest chipmaker and supplier to Apple and Nvidia, removed some employees from its production centers after the earthquake. The company is assessing the impact and ensuring all its employees are safe.

Another important company in the sector, United Microelectronics Corp (UMC), also evacuated some facilities in Hsinchu and Tainan, cities located in western Taiwan.

UMC has halted operations of some chipmaking machines but is working to get them back up and running. Acer, one of the country’s main companies, reported that there was no significant impact on its operations.

Market reaction after the earthquake

Despite the damage caused by the earthquake, the market reaction was relatively subdued. The Taiex share index fell 1%, but managed to reduce losses. TSMC and UMC shares fell around 1% and the local dollar remained stable against the US dollar.

The earthquake affected not only Taiwan, but was also felt in Japan and China. In addition to the fatal victims and collapsed buildings, hundreds of people were injured and others remain trapped in the rubble.

Although the earthquake raised concerns, nuclear plants continued to operate normally and power distribution was stabilized. Flights were also not impacted.

Alert for new earthquakes

Authorities warn that new earthquakes of magnitude greater than 6 are expected in the coming weeks, but the impact is expected to be moderate compared to the main event.

The East Asian region is prone to seismic tremors due to its geographic location. However, countries in the region have adopted safety measures to minimize the damage caused by these natural events.

The earthquake in Taiwan also draws attention to the geopolitical dispute between China and the United States. Beijing claims Taiwan as part of its territory, but the island governs itself independently as a democracy. The issue of Taiwan’s status is a major point of conflict between the two world powers.