An earthquake that was 6.7 in magnitude occurred off the eastern coast of Taiwan at 9:19 p.m. on December 10. Right after the earthquake had struck, TrendForce immediately began checking the operational statuses of the semiconductor plants in Taiwan and surveying the possible damages resulting from the event. The investigation so far finds that the DRAM fabs on the island have already resumed normal operation following a brief suspension of their production lines. The DRAM fabs in Taiwan are mostly located in the northern and central parts of the island, whereas the epicenter of the earthquake was in the eastern sea of the island. After the tremor had stopped, local DRAM manufacturers temporarily suspended the operation of their production lines to inspect equipment. Currently, they have not reported any significant damages to their plant buildings and equipment. Furthermore, they have all returned to normal production. Hence, the earthquake appears to have not caused any tangible capacity losses for Taiwan’s DRAM industry. Likewise, Taiwanese foundries have not been affected by the earthquake to any meaningful degree.
TrendForce indicates that Taiwan-based facilities account for 21% of the global DRAM production capacity. These local facilities include MTTW (Micron’s Taiwan-based subsidiary), Nanya Technology, and several other fabs that are relatively smaller in scale. On the other hand, Taiwanese foundries, including TSMC, UMC, Vanguard, and PSMC, account for 51% of the global foundry capacity.
As the year draws to a close, the overall DRAM production capacity is gradually shifting towards a shortage situation. Hence, any factor that impacts the supply side can potentially affect the movement of DRAM prices going forward as well. TrendForce expects the overall DRAM ASP in 1Q21 to make a recovery from its previous decline, with a slight chance for rebound, due to the recent power outage at Micron’s MTTW facility. On the whole, the December 10 earthquake has not resulted in a substantial and noticeable impact on Taiwan’s DRAM manufacturing operations. TrendForce therefore will not revise its DRAM price forecast that was released earlier this week.
With respect to the foundry industry, most fabs in Taiwan are now operating at 90-100% capacity utilization rates, owing to high demand for 5G smartphone components, WiFi 6 products, CPUs, GPUs, and DDICs. Wafer capacities for certain nodes are even in extremely short supply. Given the overall capacity shortage across the industry, the earthquake has fortunately not caused damages to foundry production lines. Taking the above into account, TrendForce expects most Taiwanese foundries to maintain above-90% capacity utilization rates in 1H21.