An unexpected power outage occurred in the Linkou, Taishan and Xinzhuang areas of New Taipei City in northern Taiwan, and some chipmakers with factories in these areas were confirmed to be affected. According to a report by TechNews (machine translated), “Micron’s factories in Taoyuan and Taichung experienced a brownout due to the lightning strike on August 13, and Micron confirms that all colleagues are safe and working as usual.”
Manufacturing disruptions occurred at the factories of memory maker Micron and its partner Nanya Technology, but there were also rumors that Micron’s dry etch and wet processes may have been affected by the voltage drop.
Nanya Technology, on the other hand, experienced a 20-minute power outage. Although the factory’s uninterruptible power supply (UPS) came on for most of the critical components, such as the lithography and etching areas, management is still investigating whether other systems that were not protected by a UPS were damaged.
Overall, we expect the impact of the outage to be small. The affected companies still have inventory on each production line and supplies are still considered sustainable. However, we cannot ignore the global impact of a disruption of this level, especially since Micron and Nanya are among the largest global chip suppliers.
For example, in 2020, a Micron factory experienced a one-hour power outage, and the market responded with a rise in DRAM prices. A few days later, disruptions occurred again when a magnitude 6.7 earthquake struck the region, reducing production of graphics DRAMs and causing prices to spike again.
These events show us how fragile our semiconductor supply chain is. Since most of the most advanced chips are produced in vulnerable hotspots like Taiwan and South Korea, flare-ups in the region could lead to a global chip winter. Even the US recognizes this, saying that a Chinese takeover of TSMC would devastate the American economy.
While the U.S. is investing billions of dollars through the CHIPS Act to boost domestic semiconductor research, development and production, experts say TSMC will continue to lead global semiconductor production through 2032. So until we reach a time when cutting-edge chip manufacturing is distributed across the world, the global digital ecosystem is at risk from any major event in this space, whether natural or man-made.
