The Supply Chain May Be Interrupted! TSMC Warning

- Apr 27, 2020-

Abstract: According to Taiwan media reports, in view of the current global pandemic of the new crown epidemic, the global chip foundry leader TSMC said that the epidemic may adversely affect the company at all levels, including the interruption of the semiconductor supply chain!


Article reprinted from: China Semiconductor Forum


According to Taiwan media reports, in view of the current global epidemic of the new crown epidemic, the global chip foundry leader TSMC said that the epidemic may have adverse effects on the company at all levels, including the interruption of the semiconductor supply chain!


TSMC warned that the epidemic has caused downward pressure on global customer demand, and the forced closure of factories or offices may lead to potential production delays. The epidemic has prompted TSMC to adjust its business operations and establish an epidemic prevention committee.


Although the foundry leader TSMC has expected the new coronary pneumonia epidemic to be eased in June, the TSMC announced its annual report this year on the 21st. The annual report revealed that the new coronary pneumonia epidemic has not yet been published by the date of the annual report. It has a major impact on operations, but if the epidemic continues and intensifies, it may still have a significant adverse impact on operations. The worst of these is the possibility of disruption of the semiconductor supply chain.


The TSMC annual report pointed out that in response to the recent pandemic of the new coronavirus, it may have a significant adverse impact on TSMC's business and operational performance at the following levels, including but not limited to the following three possible situations: One is to interrupt the global semiconductor supply chain and the supply of TSMC Operators ’operations, including Asia, Europe and North America. The second is the downward pressure on global customer demand, and the third is the potential delay in the production of TSMC products due to the forced closure or partial operation of factories or offices.


TSMC Early Warning! Supply chain or interruption.webp.jpg


TSMC has implemented a number of measures including routine disinfection, independent isolation, hygiene requirements and group work. However, considering the uncertainty surrounding the new coronary pneumonia epidemic, TSMC cannot predict whether the aforementioned measures will limit the spread of the virus in the workplace or whether operations will be severely disrupted by the epidemic. As of the date of publication of the annual report, TSMC's current business and operating performance have not been significantly affected by the epidemic. However, depending on the development trend of the epidemic, TSMC may still face the aforementioned various and other risks.


The annual report mentions that because the epidemic is still ongoing and may increase, there are great uncertainties in its development and impact, including whether the current or continuous spread of the epidemic will lead to slower economic growth or global recession. TSMC is currently unable to predict the epidemic Impact on business and operations.


TSMC said that the recent new pneumonia epidemic has caused TSMC to adjust its business operations, including but not limited to the health management of employees, customers and suppliers, production inventory management and supply chain risk management. TSMC has established a "Preventive Committee" to identify, implement and monitor the actions required for dynamic emergencies caused by epidemics. TSMC cannot ensure that these and other measures are sufficient to mitigate the risks posed by the new coronary pneumonia epidemic, and that TSMC's ability to operate critical functions may be materially and adversely affected.