Electronics production not severly affected by Taiwan quake

A 12-inch wafer is displayed at Taiwan Semiconductor Manufacturing Co in Xinchu in this 2007 file photo.
A 12-inch wafer is displayed at Taiwan Semiconductor Manufacturing Co in Xinchu in this 2007 file photo. PHOTO: REUTERS

TAIWAN (BLOOMBERG) - Electronics manufacturers in Tainan, the south-western Taiwanese city which bore the brunt of the 6.4 magnitude earthquake which struck on Saturday (Feb 6) morning, said production is not expected to be much affected.

Tainan is a hub for electronics makers such as Taiwan Semiconductor Manufacturing Co (TSMC) and home to some of the world's biggest companies which produce chips for the likes of Apple Inc. and Qualcomm Inc.

The island is prone to quakes as it sits on the edge of where the Philippine Sea Plate and Eurasia Plate converge. Plate movements can trigger temblors which can cause disruption or damage to high-precision chip-making equipment. There have been about 79 quakes greater than 4.5 in the area since the beginning of last year, according to the U.S. Geological Survey website.

"Supply chain disruption risk is unlikely as most of the factories should be able to be back to normal in a couple of days, and it's off season in the technology industry," Vincent Chen, president of Yuanta Investment Consulting, said by phone. "It should be manageable with inventories."

TSMC was confident of making first-quarter shipment targets despite the quake that damaged some wafers that were in the manufacturing process, Elizabeth Sun spokeswoman for the contract manufacturer of chips for Apple, said by phone. The company will accelerate production to make up for the wafers affected, Sun said. There was no damage to its plants in Tainan and no injuries from the quake, she said. Employees returned to work after being evacuated.

Liquid-crystal display maker Innolux Corp. said all of its eight factories in Tainan were shut down automatically after the quake and that production is being resumed gradually. The company said its four factories in Hsinchu are operating normally.

United Microelectronics Corp. Chief Financial Officer Liu Chitung said by phone that there were no injuries nor any damage to its four chip factories in Tainan, though the machines will need recalibrating. UMC will evaluate the impact to its operations, Liu said.

President Visit Corning Inc., a supplier of glass substrate for panel makers with one factory in Tainan, didn't suffer any damage to its facility and it is examining its operation lines, Corning Display Technologies Taiwan President Daniel Tseng said in text message.

China Steel Corp. said its manufacturing lines in Kaohsiung and unit in central Taiwan's Taichung resumed normal operations before 7 a.m. local time. All employees are safe, the company said in an e-mailed statement.

The Tainan city government said 221 people were rescued and 55 hospitalized, according to its website. Three people were without life signal, though hadn't been declared dead, it said. The earthquake struck at 3:57 a.m. local time, with the epicenter in Kaohsiung city at a depth of 16.7 kilometers, according to Taiwan's Central Weather Bureau website. There were at least 40 aftershocks from the temblor which happened at the start of the Lunar New Year holiday, a time when many people travel in the region to return home for the festive celebrations.

Taiwan President Ma Ying-Jeou was scheduled to visit the Tainan rescue center this morning to oversee the quake rescue, according to a text message from the presidential office.

Taiwan High Speed Rail Corp. said all north-bound bullet trains departing from Kaohsiung city before 9 a.m. were cancelled to conduct safety checks on the tracks after the quake.

An 7.3-magnitude earthquake on Sept. 21, 1999, killed 2,474 people and injured about 11,000, causing estimated visible property damage of NT$341.2 billion (S$10.3 billion, S$14.5 billion), the government said at the time. Tainan, an ancient capital known for its centuries-old fortresses and temples, is just north of the port city of Kaohsiung on the island's southwest coast.