scorecardresearch

Automakers breathe easy as Taiwan quake spares chip output

TSMC is a contract manufacturer of semiconductor chips, used for powering phones, laptops, cars, medical equipment, telecom towers and many more.

Automakers breathe easy as Taiwan quake spares chip output

The world’s biggest chip manufacturer, Taiwan Semiconductor Manufacturing Company (TSMC), said the 6.9 magnitude earthquake that jolted Taiwan on Sunday, has had no major impact on its business.

TSMC is a contract manufacturer of semiconductor chips, used for powering phones, laptops, cars, medical equipment, telecom towers and many more.

Any disruption in the supply chain of semiconductors would impact production schedules of automakers, who have struggled to increase production since the past several quarters due to restricted supply of such chips.

“There can be some interruption at the Tier-2 level of the supply chain in the manufacturing of the chips because of the quake. But as such we are not expecting any major disruption in supplies (of the chips themselves),” said a senior sales and marketing executive from one of India’s top car makers.

Also read: Apollo Tyres launches Tramplr enduro tyres for premium motorcycles

Over the last few weeks automakers have acknowledged a sharp improvement in availability of chips, which has led to a commensurate jump in vehicle production. However, they have cautioned that the supply chain is not fully out of the woods.

“The (semiconductor) crisis is in control to the extent that if the demand in the market is ‘X’, we might be slightly behind that ‘X’; not like 70% of what is needed,” Shailesh Chandra, managing director, Tata Motors Passenger Vehicles, said recently.

He said the crisis period for the chip market emerged when particular events like the Renesas fire in Japan and the outbreak of Covid-19 in Malaysia occurred.

Also read: Ola Electric to open 200 experience centres by FY23-end

Puneet Gupta, director, S&P Global, said, “There seems to be no direct damage because of the earthquake. But there is some disruption in the foundry and one of the equipment had to be shut down and this is disclosed officially. But they later added that chip production is back to normal. But there will be some indirect impact because of the supply chain.”

Indian automakers across categories are busy increasing output to deliver to customers as much as they can during the upcoming festive season. Sales during the 42-day festive period typically account for as much as 30% of the entire year’s volume.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.