Taiwan Semiconductor Manufacturing Co. (TSM), the world’s leading contract chipmaker, has assured investors that its operations will remain unaffected by Super Typhoon Kong-rey. The company has activated its routine typhoon alert procedures across all factories and construction sites to maintain production continuity despite the approaching storm.
This announcement comes during a period of geopolitical instability for Taiwan Semiconductor. In October, Hurricane Helene disrupted production of high-purity quartz at two major North Carolina mines. Quartz is essential in the semiconductor manufacturing process, and this disruption has raised concerns over supply chain vulnerabilities.
Taiwan Semiconductor is also navigating the complexities of the ongoing US-China trade war. The company has faced pressures from both the US government, concerned about its relationships with Chinese tech giant Huawei, and China, which has imposed export restrictions on Taiwanese chips.
As a result, Taiwan Semiconductor has suspended chip shipments to two developers linked to Huawei. While China is a significant market, accounting for over 10% of Taiwan Semiconductor’s revenue, this figure has decreased since Huawei’s export restrictions were introduced in 2020.
Adding to these geopolitical challenges, Intel Corp (INTC) CEO Pat Gelsinger’s recent comments on Taiwan’s stability have strained relations between Intel and Taiwan Semiconductor. Gelsinger’s remarks led to Taiwan Semiconductor retracting discounts on its advanced 3-nanometer chips for Intel, meaning Intel will now pay full price, which may impact profit margins on future projects.
Despite these challenges, investor confidence remains strong, with Taiwan Semiconductor’s stock rising 92% year-to-date. The company’s resilience in navigating these geopolitical and supply chain issues underscores its strength and adaptability in a rapidly changing global market.
As Taiwan Semiconductor continues to face these hurdles, its ability to maintain production and innovate will be crucial for its future success in the global semiconductor industry.
