By Pai Pei-hwa (白佩華)– Special to the Kaohsiung Times
Over the past two years, Taiwan has experienced several significant earthquakes. As the world’s leading semiconductor foundry, TSMC’s post-disaster response and risk management practices have drawn close scrutiny—not only because they affect the company itself, but because they reverberate across the global semiconductor supply chain.
From the 2024 Hualien earthquake to the January 2025 Chia-Yi (Chia-Nan) earthquake and subsequent seismic events, TSMC’s experience illustrates how a high-tech enterprise balances recovery speed, employee safety, and long-term resilience.
Comparing Earthquake Impacts and Operational Losses
2024 — The Hualien Earthquake
The 2024 earthquake caused limited structural damage to TSMC facilities.
Most production lines resumed within a relatively short period, and the financial impact was mainly tied to temporary shutdowns and delayed output, rather than equipment destruction. Overall, the impact remained manageable.
January 21, 2025 — The Chia-Yi (Chia-Nan) Earthquake
A magnitude 6.4 earthquake centered in Chia-Yi triggered automatic shutdowns and evacuation procedures across multiple science parks.
Key outcomes:
- Work-in-process wafers were damaged and scrapped.
- TSMC estimated earthquake-related losses at roughly NT$53 billion (about US$1.6 billion), net of insurance.
- Certain fabs experienced equipment movement and wafer breakage, particularly in advanced process nodes requiring precise calibration.
In comparison:
The 2025 Chia-Yi earthquake generated greater direct production losses than the 2024 event. Operations resumed quickly, but scrapped wafers, recalibration, and quality control created a meaningful operational burden.
Risk Management and Insurance: Adjusting Under Real Pressure
TSMC combines enterprise risk management, Business Continuity Management (BCM), and heavy engineering investment.
Key elements include:
- Engineering-grade mitigation: floating foundations, vibration control, reinforced cleanrooms, resilient utilities.
- Structured emergency drills: automated shutdown and standardized evacuation procedures.
- Evolving insurance structures: coverage for scrapped wafers, recalibration costs, and supply-chain disruption, alongside potential parametric earthquake insurance and reinsurance partnerships.
Earthquakes are no longer rare shocks; they are recurring strategic risks that reshape how high-value technology assets are protected and insured.
Balancing Rapid Recovery, Employee Safety, and Organizational Resilience
Each major earthquake raises the same question: how fast should operations resume, and at what cost?
TSMC’s experience shows that speed alone is not enough. Safety protocols, staged re-entry, and structural inspections must come first.
Recovery today is precision-led: sensor checks, restart sequencing, and careful calibration to avoid secondary quality failures. At the same time, addressing employee anxiety through communication and flexible arrangements is essential.
True resilience is measured not by speed, but by whether operations remain stable, safe, and sustainable after restart.
From Reaction to Resilience
TSMC’s earthquake experiences demonstrate that real resilience requires more than rapid recovery. Governance, engineering safeguards, disciplined BCM, and adaptive insurance all matter—when balanced with employee safety and long-term operational stability.
Resilience ultimately means restoring operations safely, steadily, and sustainably, protecting both people and corporate value.
About the Author:
Pei-Hwa Pai (白佩華) has over twenty years of experience in risk management and sustainability consulting. Holding dual master’s degrees in communication from U.S. institutions, Ms. Pai also earned a Certificate in Circular Economy and Sustainability Strategies from the University of Cambridge Judge Business School, professional certificates in Strategy Analysis, Management and Leadership, and Business in Society from Harvard Business School, and an ESG Materiality Analysis Certificate from the Wharton School. She further holds certifications in TCFD, CDP, and SBTi training from Taiwan’s Industrial Technology Research Institute (ITRI), along with credentials as a lead auditor for ISO 14064, ISO 14068-1, ISO/IEC 42001, and expertise in ISO 14067 and BS 8001. Trained under the MIC Industry Analyst Program, she brings both academic rigor and industry insight to her consulting practice.
Pai has also established two scholarships dedicated to sustainability and AI, supporting academic research and encouraging young people to enter the field of sustainable development. Over the years, Ms. Pai has guided numerous companies in successfully implementing sustainability transformations. Her columns have been published across numerous media outlets, and she continues to serve as a strategic and sustainability advisor to the industry.
