The epidemic in Taiwan continues to intensify, Taiwan Semiconductor Manufacturing Co Ltd is also unfortunately hit, the global growing chip shortage, and has been cast a shadow.

An engineer from Taiwan Semiconductor Manufacturing Co Ltd diagnosed COVID-19 on May 22, according to local media reports. In response, Taiwan Semiconductor Manufacturing Co Ltd said that the employee has been admitted to hospital for proper treatment, the current symptoms are mild, has stepped up disinfection in the worker's workplace and public areas, this incident does not affect the operation of the company.

In addition to Taiwan Semiconductor Manufacturing Co Ltd, three other companies in Taiwan's semiconductor industry have been diagnosed, including memory manufacturer Yuzhan, South Asia Branch and TSMC's world-advanced foundry, all of which have one employee diagnosed.

Since early May, the COVID-19 epidemic in Taiwan has suddenly heated up. According to overseas network synthesis of Taiwan's "Dongsen News Cloud" and other Taiwan media news, Taiwan's epidemic command center announced on the 23rd that there were 290 new confirmed cases of COVID-19 in Taiwan, of which 287 were local cases, and more than 100 cases have been confirmed for nine consecutive days.

The suddenly rising epidemic has triggered severe turmoil in Taiwan's capital markets. As the epidemic spreads to the semiconductor industry, coupled with the continuing impact of the drought, many analysts are worried that the current chip crisis in the global electronics industry may worsen.

A double whammy of the epidemic and drought!

Global chip shortages that began to emerge at the end of last year have troubled industries ranging from cars to computer games.

At present, Taiwan is one of the main suppliers of semiconductors in the world. Taiwan Semiconductor Manufacturing Co Ltd, the world's largest wafer foundry and the main producer of 7nm/5nm, currently accounts for 56% of the global chip foundry business, and its main customers include Apple Inc and Qualcomm Inc.

Tony Phoo, senior economist at Standard Chartered Bank, believes that if the number of COVID-19 cases in Taiwan continues to increase and the epidemic spreads to the south of Taipei, where the wafer factories are dense, a large number of factories are bound to be affected and closed, affecting production capacity, which may worsen the problem of insufficient supply of semiconductors worldwide.

If the number of new cases remains high, Taiwan could be forced to impose a full blockade, from retail to exports that Taiwan's economy relies heavily on, according to Bloomberg reported by reference sources. The report also pointed out that Taiwan is the world's main supplier of computer chips, including Taiwan Semiconductor Manufacturing Co Ltd and key suppliers of the automotive industry, which is suffering from a shortage of chips.

In addition, power outages caused by drought have further complicated the situation in Taiwan's chip industry. Affected by the drought, counties and cities such as Miaoli, Taichung and Changhua have implemented water restrictions for five days and two days since April, Chinanews.com reported.

As a result of the dry weather, hydropower stations can only generate electricity with limited capacity, causing power outages in major cities across Taiwan, including the locations where the world's largest computer chip companies operate. According to the Bloomberg report, Taiwan's economy will be hit at present and in the near future, and the epidemic will leave scars on economic growth. Even a short power outage will slow down the production line, so the pressure of chip shortage will be even more serious.

According to CCTV news, the medical community now generally believes that there are two points in Taiwan that are quite worrying. The first is that it has more than 23 million people on the island, and the current vaccination rate is less than 1%. The second is the universal screening, because the authorities have always believed that if the universal screening is blind, it is not very beneficial to the defense.

Taiwan's semiconductor advantage is under threat

The chip crisis may weaken Taiwan's dominant position in the global chip industry.

Production disruptions in various industries caused by chip shortages since last year have made governments aware of the importance of chips as "new era oil". At present, all countries are increasing their investment in the chip industry, which may weaken Taiwan's competitive advantage in semiconductors in the long run.

"We are already too dependent on Taiwan and South Korea, which is the key, and we need a more balanced global supply chain," Pat Gelsinger, chief executive of Intel Corp, the world's largest chipmaker, said in a recent media interview.

At present, global chipmakers are expanding their investment, Barclays said in a report. Bills for semiconductor equipment in north America totaled $3.27 billion in march, up 47.9% from a year earlier and an all-time high.