Chip off the old Taiwanese block
earthquake off Taiwan's east coast on Wednesday is unfortunate. It is also an unfortunate reminder of the risk of concentrating an overwhelming proportion of the world's most advanced chip-making capacity in one territory. Taiwan's semiconductor fabrication units are located at some distance from the epicentre of the earthquake and evacuated staff in response to disaster protocols.
Initial reports suggest there is unlikely to be an immediate impact on supply chains feeding all manner of things from cars and cellphones to laptops and satellites. However, chip-making is particularly susceptible to vibration, and Taiwan lies in a zone of heightened seismic activity that also poses a risk to its principal source of power: nuclear energy.
Chipmakers have accelerated plans to diversify beyond Taiwan after the Covid outbreak snarled up supply lines. There is also simmering tension with China that reinforces the need for resilient supply of a critical component in global manufacturing.
The automobile industry is revisiting its underinvestment in chip manufacturing that held up production for the better part of the pandemic. The ensuing 'China plus one' strategy has had an effect on government policy, with the US announcing incentives for chip production at home. India, too, places semiconductors at the core of its manufacturing ambitions.
New Delhi has had a mixed experience as it scaled up its plans to make more advanced semiconductors, aided by a generous scheme of incentives. After initial missteps that saw Foxconn
