Though investors fled for the exits after a 6.2 Richter scale earthquake struck an hour into yesterday's stock trading session, chipmakers said the temblor did little damage to their production lines.
Yesterday's quake measured about 4 on the Richter scale in Hsinchu -- the heart of the nation's high-tech industry.
"The earthquake didn't really affect us at all," said Mike Liu (
The Taiwan Semiconductor Manufacturing Co (
On the Taiwan Stock Exchange yesterday, TSMC fell NT$1.5, or 1.6 percent, to NT$92.50. UMC fell NT$1, or 1.9 percent, to NT$52.
Typically, work stoppages caused by earthquakes can cause damage to microchips already in production, as the shaking causes sensitive equipment to skip and ruin chips.
Robert Tsao (
Taiwan's chipmakers face two serious threats to profits, one from earthquakes and the other from frequent power outages. Last year, 40 blackouts shut down Hsinchu-based chipmakers, but the only power outage caused by yesterday's quake occurred in a section of downtown Taipei.
Yesterday's quake was also largely responsible for the 1.7 percent drop in the TAIEX, which fell 90.52 points to 5,119.19.
In the minutes after the quake, which came roughly an hour after the market's 9:30am open, trading volume spiked and the index lost 60 points.
According to one analyst, the shake-up sent traders on the stock exchange floor fleeing from the building. But once investors learned how little damage there was from the quake, trading stabilized.
"When the earthquake hit, nobody knew how serious it would be so they sold shares. As soon as they knew how limited the damage was, they bought them back," said Henry Wang (王漢寧), electronics analyst at EnTrust Securities (永昌綜合證券).
Another factor hurting shares yesterday, Wang said, was the decline in US technology shares overnight.
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