Taiwan Earthquake: Equity Market Relatively Sanguine, Only TSMC Has EUR Credit

Taiwan earthquake – limited equity moves for local chip makers, only TSMC has any meaningful EUR credit outstanding but local equity market appears relatively relaxed about potential chip supply disruption.

• A magnitude 7.4 quake hit the eastern coast of the island with reports indicating 4 dead so far. Quake hit at 0758 local time, around midnight in London. The west coast is home to most of the chip foundries on the island, which are generally built to standards to withstand greater magnitudes with closer epicentres, according to reports.
• The TWSE index is showing only 0.6% lower with the chip companies down only marginally more. So, the equity market appears relatively relaxed about potential disruption to chip supply chains.
• It is worth recalling that Taiwan produces over 60% of the world’s semiconductor chips with a higher percentage of more advanced types of chips – any disruption here therefore has a disproportionate global impact.