Hualien earthquake and Taiwan's chip plants (2024)
Taiwan's strongest earthquake since 1999 tested the global concentration of advanced chip manufacturing, and showed what plants built for seismic risk are worth.
Production of the most advanced chips is concentrated in a few plants on an island that is both seismic and at the center of a major geopolitical tension. Two risks overlap there: physical risk, which seismic design and automatic machine shutdown limit, and political risk, which no engineering reduces. For the property insurer, the event turns on recovery speed, since wafers in process are lost at every abrupt stop. For the business interruption underwriter of the whole electronics industry, it measures an accumulation: a single site, thousands of insureds who depend on it, with no contractual link between them.
On April 3, 2024, a magnitude 7.4 earthquake struck the Hualien region, the strongest in Taiwan since the 1999 Chi-Chi earthquake; the island's leading foundry evacuated its clean rooms and announced that more than 70% of its plants' equipment was back in operation within ten hours.
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