Major Earthquake in Taiwan Halts Some Apple Chip Production Lines

A major earthquake in Taiwan has halted some TSMC chip production lines, potentially impacting the manufacture of Apple devices (via Bloomberg).

A 7.4-magnitude earthquake struck Taiwan in the early hours of the morning, killing at least nine people, injuring hundreds, and causing significant damage to infrastructure, including disrupting operations at several TSMC key manufacturing sites. Sources familiar with TSMC's operations said that the company's N3 fab in Tainan suffered structural damage, with beams and columns broken, leading to an outright halt in production. EUV machines, essential for manufacturing processes below 7nm, have stopped, and research and development labs have been subject to significant damage, such as cracked walls. Another fab in Hsinchu reported broken pipelines and extensive damage to wafers, necessitating a halt in production.

Some of TSMC's high-end chips, such as the 3nm A17 Pro in the iPhone 15 Pro and iPhone 15 Pro Max, require round-the-clock operations and a stable vacuum environment for several weeks. As a result, some high-end chips already in production are likely to have been spoiled even if they were not damaged directly.

All of the custom silicon processors in Apple's devices are supplied by TSMC. As such, the earthquake's immediate effects on TSMC's facilities have raised concerns about potential delays in Apple's product supply chain. The chipmaker has taken immediate action to assess the damage and initiate recovery procedures, with some production lines expected to resume operation today, but the full extent of the impact on Apple's supply chain remains uncertain.

TSMC has historically placed a strong emphasis on disaster preparedness, especially following a major earthquake in 1999. The company has since implemented rigorous seismic management measures designed to mitigate the risks posed by earthquakes, including post-earthquake inspections, the installation of dampers and shock absorbers, and the integration of equipment vibration reduction technologies.

Apple is in the midst of ramping up production for its upcoming product releases, so significant disruptions in the supply of TSMC-manufactured chips could potentially delay product launches or limit availability. That being said, Apple is known for its robust supply chain management strategies, which will likely help mitigate the immediate effects of the earthquake on the company's product timelines and availability.