Concerned about the impact of earthquakes, the market expects memory prices to rise. Nvidia stated: It is expected to have no impact on the supply chain

On April 3, a 7.4 magnitude earthquake struck the waters off Hualien County, Taiwan, the strongest earthquake in 25 years, resulting in 9 deaths and over 900 injuries.

As the hub of global high-end manufacturing, the impact of the earthquake on Taiwan's semiconductor industry has also attracted investors' attention. Preliminary observations suggest that despite the strong earthquake, its impact on wafer supply is relatively limited, to some extent alleviating concerns in the international semiconductor supply chain.

NVIDIA Statement: Earthquake Will Not Affect Chip Supply

Overnight, the stock price of "AI leader" NVIDIA fell slightly by 0.6% to $889.64. The company stated that it has quickly contacted its major partner TSMC after the earthquake and assessed that the earthquake is not expected to cause any interruptions in its supply.

TSMC's largest production bases in Taiwan are located on the western side of the island, diagonally opposite to the earthquake epicenter. After the earthquake, some factories temporarily halted production and evacuated workers. According to TSMC, despite a brief shutdown after the earthquake, its wafer fabs had resumed to 70% of their previous capacity within 10 hours of the earthquake, while newer fabs had recovered to 80%.

TSMC also mentioned in a statement that only a small amount of equipment was damaged in the earthquake, and key equipment including extreme ultraviolet lithography (EUV) machines were not affected.

Market research firm TrendForce expects the impact of this earthquake on NVIDIA's chip supply to be "negligible".

Citigroup noted in a recent report that the 2016 6.6 magnitude earthquake led to a 1% decrease in Taiwan's semiconductor revenue and a 2% to 3% decline in gross margin. However, it is expected that the impact this time will be minimal. This is because TSMC has implemented strict anti-seismic production measures, including installing dampers in building facilities to enhance structural integrity, and using advanced anti-seismic technology and methods to reduce risks.

Another wafer manufacturer in Taiwan, United Microelectronics Corporation (UMC), also stated that the earthquake had "no substantial impact" on its operations, with only "some wafers" on the production line affected when safety measures were activated.

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However, despite initial signs indicating minimal damage to Taiwanese chip factories from the earthquake, the earthquake occurred at a time when memory demand is rebounding and there is a severe shortage of high-end processors for AI and graphics applications, highlighting the fragility of the global semiconductor industry.

The impact on DRAM memory chip production lines is still being evaluated. TrendForce stated yesterday that the DRAM industry is mostly concentrated in the northern and central regions, with factories undergoing shutdown inspections one after another. Although the inspections are not yet complete, no significant damage to machinery has been found so far.

Citigroup mentioned that Taiwan contributes 15% of global DRAM production capacity. Production interruptions related to the earthquake may shift bargaining power "from customers to memory manufacturers" in current contract price negotiations, leading to a double-digit increase in DRAM prices this quarter compared to the first quarter Memory chip manufacturer Micron Technology, which owns multiple factories in Taiwan, said in a statement that all of its employees in Taiwan have reported to work and are safe. Micron stated that it is "assessing the impact on our operations and supply chain" and will inform customers of any changes to delivery commitments after the assessment is completed