Years of intermittent power failures that can cause up to NT$100 million per day in damage and lost production have taught Taiwan's semiconductor manufacturers to prepare for the kind of havoc expected with the arrival of the nation's latest typhoon.
Last year, several power outages struck the nation, the most devastating of which caused shockwaves in stock markets around the world in the aftermath of the 921 earthquake.
Taiwan is responsible for 10 percent of global semiconductor production. The 28 chip companies based in the Hsinchu Science-based Park (
Interruptions to this vital link in the global electronics supply line can cause investors to panic, as they did last year during the 921 quake.
Although the quake caused minimal structural damage to facilities, nationwide power outages stopped work for three to four days in some areas. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) said the temblor and power blackouts cost the company an estimated NT$2.8 billion.
According to TSMC spokesperson Guo Shan-shan, the company has put in place a number of measures to protect against similar work stoppages -- including back up power sources for short-term power outages -- and a modified production process that limits damage to chips during power outages.
Most of the losses incurred by chip manufacturers hit by any kind of power interruption comes from damage to wafers that are on the line, according to Raymond Wu (
"[Taiwan chipmakers] have a lot of good experience on how to minimize damage to the working process," Wu said.
He said that when power stoppages send production lines screeching to a halt, semiconductor wafers can be scraped or otherwise damaged.
In TSMC's case, the earthquake-induced work stoppage resulted in 28,000 scraped wafers.
"Anything on a line when a power outage occurs would normally have to be scrapped," Wu said.
He said that most companies would prepare for a possible power outage caused by Typhoon Bilis by slowing down their manufacturing process to minimize line damage.
"The weather bureau has already warned companies about the typhoon, so they have time to slow down their lines," Wu said. "There is a big difference between having a warning or not."
But TSMC's Guo said that because of the SMIF manufacturing process, her company has continued to run factory lines at full speed.
"We don't have to slow the line for the typhoon because of SMIF," she said. "The process allows us to rework wafers that were in progress during a power outage and minimize losses."
Hsinchu-based DRAM maker Winbond (華邦電子) has prepared for power-related problems as well, said spokesman Mike Liu (劉重光).
The company recently finished building an emergency backup power supply system to ensure that such problems do not crop up in the future.
According to reports, the company spent NT$150 million (US$4.7 million) to install additional emergency power generators that can now supply the entire 29,000 kilowatts that its wafer fabrication plants need.
"We're not worried about the typhoon," Liu said.
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