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Taiwan Semiconductor Manufacturing<\/a> Company (TSMC), the semiconductor chip-making juggernaut, evacuated its workers after a 7.4 magnitude earthquake rocked the country on Wednesday, reporting no major damages. Its employees returned to work only hours after aftershocks rippled through the island. It\u2019s not the company\u2019s first rodeo in navigating natural disasters.<\/p>\n TSMC, the primary chip supplier for Apple<\/a> and AI darling Nvidia<\/a>, told Fortune<\/em><\/a> it moved its workers from some of its production centers as a precautionary measure and temporarily halted operations during the earthquake and its immediate aftershocks. While the company reported damage in a \u201csmall number\u201d of tools and has an ongoing inspection to assess full damages, it said its fabrication plants recovered 70% of tools within 10 hours of the earthquake, and that its \u201ccritical tools,\u201d such as its multimillion-dollar extreme ultraviolet lithography tools, remain unharmed.<\/p>\n \u201cTSMC is deploying all available resources for full recovery, and impacted facilities are expected to resume production throughout the night,\u201d TSMC said in a statement to Fortune<\/em>.<\/p>\n The manufacturer, as indicated by their damage limitations, is no stranger to being nimble in the face of natural disaster. Taiwan has about 2,200 earthquakes a year, according to the Central Weather Administration Seismological Center<\/a>, over 200 of which can be felt. The ubiquity of these events has simply forced the company to make necessary changes to its operations.<\/p>\n \u201cSeismic activity is a huge challenge for firms carrying out the most precise manufacturing processes of any industry,\u201d Mark Williams, chief Asia economist of Capital Economics, wrote in an April 3 note. \u201cBut it is one that Taiwanese chipmakers have grown up with.\u201d<\/p>\n TSMC did not tell Fortune<\/em> the conclusions of its inspection or how the work stoppage will impact business, but there is a precedent for Wednesday\u2019s setbacks: In 2016, a 6.6 magnitude earthquake shook TSMC\u2019s Tainan fabrication plants. Following the disaster, the company insisted that the quake wouldn\u2019t impact first-quarter shipments more than 1%. Indeed, wafer chip shipments saw a 1.8% quarter-over-quarter dip, but revenue for the quarter plummeted 8.3%.<\/p>\n \u201cAlthough the February 6 earthquake caused some delay in wafer shipments in the first quarter, we saw business upside resulting from demand increases in mid- and low-end smartphone segments and customer inventory restocking,\u201d Lora Ho, TSMC senior vice president of human resources and then-CFO, said in its 2016 first-quarter earnings report.<\/p>\n Following the disaster, TSMC strengthened the ceilings<\/a> of its facilities with bracings and added stoppers to its tower stocker shelves to prevent slippage.<\/p>\n It took a massive natural disaster for TSMC to begin to seriously revise its protocols and infrastructure. The benchmark for Wednesday\u2019s 7.4 magnitude quake was 1999\u2019s 7.6 magnitude shock<\/a>, which saw 2,415 people killed and over 11,000 injured and caused $300 million in damages.<\/p>\n Following the 1999 quake, TSMC improved seismic coefficient, or loads offsetting seismic activity\u201425% more than legally required for its new main buildings\u2014and added additional anchors on its equipment. It made additional incremental changes<\/a> to its infrastructure, including dampers that disperse kinetic energy caused by earthquakes, that reduced the seismic activity felt by buildings by 15-20%. In 2015, TSMC installed an Earthquake Early Warning System. The company did not respond to Fortune<\/em>\u2019s request for comment on changes it plans to make following Wednesday\u2019s natural disaster.<\/p>\n TSMC\u2019s earthquake preparedness is a cross-section of the changes Taiwan has made to its infrastructure to mitigate earthquake-related damages and fatalities. While over 300,000 households lost power after the Wednesday quake, 70% of them had power restored by 9:30 a.m.<\/a><\/p>\n Wu Yih-min, a professor of geosciences at National Taiwan University and a team leader at the National Science and Technology Center for Disaster Reduction, told Bloomberg<\/a> that Taiwan has developed a disaster response team in the past three to five years to manage catastrophes. The team can scan information online to inform where it sends assistance and can detect mobile signals and view screenshots from surveillance footage to assess damages and foot traffic patterns.<\/p>\n \u201cTaiwan continues to develop these technologies, and we have advantages,\u201d Wu said.<\/p>\n<\/div>\n\nLearning from the past<\/strong><\/h2>\n
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