Big Taiwan Quake Leaves Fabs Intact8:23 PM EST Mon. Sep. 20, 1999
The magnitude 7.6 earthquake that hit Taiwan Monday raised the spectre of a disruption in the production of computer components.
However, preliminary indications are that disruptions are minimal.
According to wire-service reports, the earthquake struck central Taiwan, about 90 miles south of the capital city of Taipei, and close to the Hsin-chu Science-based Industrial Park, home to some of Taiwan's most advanced high-tech companies.
The world's two largest dedicated IC foundries, Taiwan Semiconductor Manufacturing Co. (TSMC) and the UMC Group, are located in Taiwan. However, early reports from Taiwan suggest that TMC's buildings are intact even though power is out, said Debbie Scoggin, vice president of marketing for the Fabless Semiconductor Association. UMC's power is on, she said.
A number of motherboard chipset vendors, including Acer Laboratories Inc. (ALI), Via Technologies Inc. and Silicon Integrated Systems Corp. (SIS), have headquarters in Taiwan.
The earthquake follows an islandwide power outage in July, which Scoggin said seems to have had little effect on Taiwan's IC industry.
"As long as the Hsin-chu Science Park is OK, it will not affect the PC industry very much," said Sam Tsai, president of motherboard manufacturer Elite Computer Systems Corp. (ECS), Fremont, Calif.
ECS' Taipei headquarters and a pilot factory located just north of Taipei seem to be unaffected by the quake, said Tsai. Nearly all of the company's motherboards are manufactured in China.
"If power is off, there could be a one- or two-day delay in chipset production," Tsai said. "That could set motherboard manufacturing a week or two behind."
The Acer Group seems to have come through unscathed, said Todd Osborne, executive director of marketing at Acer America Corp., San Jose, Calif.
"Our headquarters will be shut down today to let employees deal with any family issues they may have," said Osborne. "But we expect our headquarters and our manufacturing facilities to be back in operation Wednesday morning."
Soyo Computer Inc., another Taipei-based motherboard manufacturer, was not affected by the quake, according to a report in Electronics Buyers News, a sister publication of Computer Reseller News.
However, a Soyo spokesman said he expects DRAM prices to double or triple in the short term, according to the report.
The potential for damage to Taiwan's IT industry still exists, however, said an official of another Taiwan-based motherboard vendor who preferred to remain anonymous.
"The July problem was a power shortage only," the official said. "This time, if the quake damaged buildings or machines, it's a different problem."
While much of Taiwan's motherboard production has moved to China, the quake could still have an immediate and serious impact on the motherboard industry, the official said.
"A lot of chipsets and material [are] produced [in Taiwan] locally," she said. "If manufacturers are just short one component, it could affect production."
While Taiwanese companies have shifted much of their production to China over the past few years, many vendors still have production lines on the island. In addition, Taiwan is home to a fast-growing IC industry.
Taiwan's IC vendors account for about two-thirds of the world's total foundry-produced IC revenue, according to the Semiconductor Equipment and Materials International (SEMI), a trade organization of semiconductor material and equipment vendors.