Pingtung Consulting: Preliminary assessment shows that the 0121 earthquake did not cause significant damage to the Tainan wafer factory, but it may worsen the tight supply of TV panels in the first quarter of 2025.

According to TrendForce's survey on the impact of the 6.4 magnitude earthquake in Chiayi on January 21 on nearby wafer foundries and panel factories, TSMC (Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR) (TSM.US) and UMC (United Microelectronics Corp. Sponsored ADR) (UMC.US) factory in Tainan were affected as the intensity of the earthquake reached above level 4. Personnel were evacuated and operations were halted for inspection, but no major damage to the equipment was reported, only some inevitable fragmentations in the furnaces. Tainan is also an important panel production area, and the actual impact on manufacturers is yet to be confirmed, but the earthquake may exacerbate the supply pressure for TV panels in the first quarter of 2025. TrendForce stated that TSMC has an 8-inch factory and two 12-inch wafer factories in Tainan, producing from mature processes to the latest 5/4nm and 3nm processes. UMC operates a 12-inch factory in the area, including processes from 90nm to 14nm. The affected facilities have gradually resumed normal operations since the morning of the 21st, and the impact on actual production is within a controllable range. Although the products manufactured by the wafer foundries in Tainan are diverse, the overall capacity utilization of mature processes is around 70% to 80% due to the traditional off-peak season for various components. There is still significant room for adjustment on the production line. As for advanced processes, TrendForce expects that the current production is mainly stockpile preparation, so the impact of temporary shutdowns or minor fragmentations can be easily compensated, and it is not expected to cause significant disruptions. In the panel industry, Tainan is the main base for display giant Innolux. Their factories in Tainan are Fab2, Fab3, Fab5, Fab6, Fab7, while the nearby factories in Kaohsiung are Fab8, Fab8b, and T6. Due to the historical nature of the facilities and the intensity of the earthquake, some machines in Tainan factories were temporarily shut down, and the extent of the damage is still being assessed. It is estimated that this earthquake will put some pressure on the already tight supply of TV panels in the first quarter.