Earthquake Hits Taiwan Semiconductor Facilities, Revenue Risks Surface

Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) is under renewed scrutiny following a powerful earthquake near Taiwan, which has raised fresh concerns among investors about potential production disruptions. A magnitude 7.0 earthquake struck waters off northeastern Taiwan late on December 27, prompting precautionary measures at several Taiwan Semiconductor facilities. The chipmaker told Reuters on Monday that parts of its Hsinchu Science Park operations reached evacuation thresholds, triggering emergency protocols. Also Read: Japan’s Rapidus Moves To Break Taiwan Semiconductor’s Grip With Cheaper AI Chips Production And Equipment Impact While no structural damage was reported, sensitive manufacturing tools automatically shut down as designed. These included extreme ultraviolet (EUV) lithography systems, which are critical for producing leading-edge chips. Taiwan Semiconductor may need to scrap or re-inspect wafers that were in process during the quake, according to Chosun Biz. In southern Taiwan, the impact at the company’s Tainan site in the Southern Taiwan Science Park was more limited, with reported intensity at level four. However, because the facility operates advanced nodes, such as those utilizing 3-nanometer and 5-nanometer processes, even minor yield disruptions at the site could directly impact revenue, according to local reports. Estimated Financial Exposure National Tsing Hua University visiting professor Zhou Zuo-hui estimated potential losses could reach 100 million New Taiwanese dollars. Separate reports noted the company recorded losses of 5.3 billion New Taiwanese dollars following a magnitude 6.4 earthquake that struck southern Tainan in January. The $1.3 trillion chipmaker is up more than 53% year-to-date. Taiwan Semiconductor has benefited from strong demand as a key supplier to Nvidia Corp. (NASDAQ:NVDA) and Apple Inc. (NASDAQ:AAPL), outperforming the PHLX Semiconductor Index’s 45% gains. U.S. Expansion In Focus Taiwan Semiconductor continues to expand U.S. capacity as demand for advanced chips accelerates. U.S. customers now account for more than 75% of revenue this year, up from 62% in 2018. The company plans to install equipment at its second advanced facility in Arizona by summer 2026, potentially enabling 3-nanometer production in 2027. U.S. officials have stated that the firm’s U.S. investment plan has reached approximately $160 billion and could exceed $200 billion. Investors are also watching for management commentary at Taiwan Semiconductor’s fourth-quarter 2025 earnings briefing scheduled for January 15. TSM Price Action: Taiwan Semiconductor shares were down 0.58% at $301.06 during premarket trading on Monday. The stock is approaching its 52-week high of $313.98, according to Benzinga Pro data. Read Next: Nvidia Fuels Taiwan’s High-Stakes AI Push Image via Shutterstock