TSMC Earthquake Threatens Electronics and Automotive Sectors in Juarez City
Juarez City.- At least one in every 3 formal employees in Ciudad Juárez is concentrated in the automotive and electronic sectors, which are currently threatened by the lack of chip supplies as a result of the 7.2 magnitude earthquake that occurred in Taiwan last Tuesday, according to official data.
Taiwanese giant TSMC is the largest contract chipmaker in the world, producing chips for companies such as Apple, Qualcomm, and Nvidia. They make about 50 percent of 5-nanometer (nm) chips and 90 percent of 3nm chips worldwide, essential cutting-edge technologies for modern electronic devices and the automotive industry.
The representative of the Chihuahua automotive cluster in Juárez, Víctor Corella, indicated that evaluations are currently being made on the real impact of the earthquake on the supply chain of automotive and electronic companies.
President of Index, Sergio Iván Colín Chávez, believes that this event should boost the development of chip manufacturing in this region of the world. Both agreed that for now, there has not been an impact because there is inventory to guarantee production for one or two months. However, if the chip factories in Taiwan do not recover in that time, there could be a shortage and an impact on the city’s production lines.
The electronics and automotive industries are the largest in terms of employment in Juárez. According to data from the Mexican Social Security Institute, of the 500,256 jobs in Ciudad Juárez in February of this year, 105,650 are in the electronics industry, which relies on the health of the chip factories. Another 67,725 employees work in factories within the automotive world, an industry that was just beginning to recover from the chip crisis that began with the pandemic.
Reports from the two largest chip manufacturers in Taiwan, TSMC and UMC, indicate that production was stopped for 6 hours after the earthquake, but there is no considerable damage to the infrastructure of both companies. In fact, they have already resumed production in 70 percent of their operations. The crisis in the automotive sector has already caused delays in the delivery of cars, particularly in luxury segments, according to car dealers in the city.