Malaysia’s semicon industry seen shielded from immediate impact of TSMC production halt

KUALA LUMPUR (April 3): Despite the suspension of operations by chip giant Taiwan Semiconductor Manufacturing Company (TSMC), following a significant earthquake on Wednesday, the Malaysian semiconductor industry is not anticipated to face immediate repercussions, as this precautionary measure, along with available inventory, suggests minimal impact.

Datuk Seri Wong Siew Hai, president of the Malaysia Semiconductor Industry Association (MSIA) told The Edge that the suspension at TSMC is unlikely to have an immediate effect on the Malaysian semiconductor sector due to existing inventory and materials in the pipeline.

“Maybe later, but it depends on how severe the disruption at TSMC is,” he said.

Wong, who also serves as an independent non-executive director at Greatech Technology Bhd, affirmed that the factory automation solutions provider remains unaffected by the suspension as it does not rely on supplies from TSMC.

Similarly, Chew Ne Weng, managing director and president of QES Group Bhd, said it is premature to gauge the implications of TSMC’s suspension, which is precautionary in nature.

However, he warned that prolonged suspension exceeding two weeks could significantly impact the semiconductor market, considering TSMC’s prominence as the world’s largest foundry.

“Additionally, most of the high-end wafer chips, which are 7nm and below, are made by TSMC,” Chew said.

Chew assured that the supply chain at QES remains intact, as most of its critical components such as robots and sensors are sourced from Japan and the US.

According to a Bloomberg report, Wednesday’s earthquake in Taiwan prompted TSMC to halt operations at its facilities in Hsinchu, Tainan and Taichung, although these locations are not in close proximity to the epicentre.

TSMC, a major chipmaker for companies such as Apple Inc and Nvidia Corp, has relocated personnel from specific areas and stated that it is currently evaluating the effects of a 7.4-magnitude earthquake off the east coast. However, it did not specify when operations would resume.

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