This morning, the U.S. woke up to news of a powerful 7.4 magnitude earthquake hitting Taiwan, the strongest quake in the region in 25 years. As we worry about the human toll and rebuilding efforts, many also wondered about the impact on leading chip foundry TSMC and its top clients like Apple, MediaTek, AMD, and Qualcomm.

CNN reported that the earthquake tragically claimed nine lives, causing building collapses and landslides. Fortunately, TSMC’s location on the opposite side of the island spared it from severe damage. While some facilities experienced shaking and evacuations, most operations resumed as normal later in the day.

Despite minor equipment damage at some facilities, TSMC assured that critical tools remained unharmed. Over 70% of tools were back online within hours of the quake, with higher recovery rates in newer fabs.

In an investor note, Barclays analysts highlighted potential earnings impacts for TSMC due to operational disruptions. While this incident ended well for Apple and other clients reliant on TSMC’s chips, concerns linger about future earthquakes and external threats like the Chinese Communist Party eyeing semiconductor self-sufficiency.

As TSMC plays a pivotal role in global tech supply chains, industry experts stress the need for diversification to mitigate risks associated with regional dependencies. It’s crucial for the tech sector to devise solutions to safeguard against catastrophic disruptions.

Angelo Zino from CFRA Research emphasized that events like this earthquake underscore the vulnerabilities of relying heavily on one region for critical components. The industry must address these challenges proactively to ensure resilience in times of crisis.