Impact of Power Outage on TSMC Fab14 P7 Still Remaining Under Assessment, with Production of Automotive MCU and CIS Logic Products Hit Hardest
TSMC’s Fab14 P7 in the Southern Taiwan Science Park suffered a power outage on April 14th. The cause of the power outage was an accidental severing of an underground power cable during construction work nearby. According to TrendForce’s latest investigations, the facility accounts for around 4% of TSMC’s total 12-inch wafer foundry capacity and around 2% of the global 12-inch wafer foundry capacity, and TSMC is still assessing the exact figures for the wafers that have to be scrapped and the wafers that can be reworked. According to the latest available information, power was fully restored to the fab site at 7:30 p.m. on April 14th. The diesel uninterruptible power supply (DUPS) of the facility kicked in instantly when the power cable was cut, but there was still a short period of power interruption and voltage drop. As a result, some of the equipment systems in the facility temporarily experienced operational irregularity or malfunction. Based on past experiences with this type of incident, TrendForce believes that it will take 2-7 days to recalibrate the equipment systems so that they can return to normal operation.
For TSMC, this power outage incident has had implications on both revenue and production. With respect to revenue, TrendForce’s own analysis indicates that the disposal of the wafers that are too damaged for rework will bring about a revenue impact of US$10-25 million. This amount represents less than 0.1% of TSMC’s annual total revenue. On the other hand, with respect to production, the Fab14 P7 facilities contain 45/40nm and 16/12nm production lines, and the outage will primarily impair end products including smartphones and automobiles, since automotive chips, which are in extreme shortage at the moment, are manufactured at the 45/40nm nodes, and 45/40nm capacities are among the most insufficient among all foundry capacities.
TrendForce further indicates that clients whose wafer inputs for automotive MCU and CIS logic products (manufactured at the 45/40nm nodes) are bearing the brunt of the outage’s impact mainly include NXP, Renesas, and Sony. In particular, Sony CIS 40nm Logic products are primarily supplied for high-end smartphones. However, as Sony manufactures these products in its in-house facilities as well, even if TSMC were to fully discard this batch of wafers, Sony’s supplies will remain relatively unaffected in the short run.
On the other hand, after the automotive market entered a gradual recovery in 2H20, automotive MCUs have been in shortage due to automakers’ insufficient inventory. Furthermore, a fire broke out at Renesas’ Naka-based 12-inch fab on March 19, and the fab’s cleanrooms were severely damaged as a result. As of now, manufacturing operations at the Naka fab have yet to resume. Since TSMC has been allocating some of its production capacities in Fab14 to these products as a substitute for the Naka fab, TrendForce believes that the power outage incident will likely exacerbate the shortage of automotive MCUs going forward.
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