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Taiwan chipmakers suspend some production for inspections

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Halts to disrupt supply chain, analysts say

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Electronics manufacturers may face price pressures

(Updates with TSMC statement in paragraph 6)

By Yelin Mo and Brenda Goh

BEIJING, April 3 (Reuters) - Taiwan's biggest earthquake

since 1999 is likely to cause some disruption across Asia's

semiconductor supply chain, analysts said, after chipmakers from

TSMC to UMC halted some operations to inspect facilities and

relocate employees.

The powerful 7.2-magnitude earthquake struck Taiwan's

eastern coast near Hualien County on Wednesday morning, killing

nine people and injuring 800.

The island plays an outsized role in the global chip supply

chain as it is home to the world's largest chipmaker Taiwan

Semiconductor Manufacturing Co ( TSM ), which supplies chips

to Apple ( AAPL ) and Nvidia ( NVDA ).

The country also houses smaller chipmakers, including UMC

, Vanguard International Semiconductor, and

Powerchip Semiconductor Manufacturing.

While most of their facilities are not close to the

earthquake's epicenter, many of the firms said they had

evacuated some of their manufacturing plants and shut down some

facilities for inspections.

TSMC said on Wednesday work at its construction sites, which

has been halted, will resume after inspections, while impacted

facilities are expected to restart production throughout the

night.

The chipmaker, whose facilities in Hsinchu, Tainan and

Taichung have experienced varying degrees of disruptions, may

have to delay some shipments and increase wafer input to

compensate for this, consultancy Isaiah Research said in a note.

"Mitigating the impacts of the earthquake necessitates

careful measures and time to restore production and uphold

quality standards, presenting additional implications and

obstacles," they said.

TSMC's Tainan operations for advanced process nodes, such as

4/5nm and 3nm, were temporarily suspended, they said. In

addition, the extreme ultraviolet (EUV) lithography equipment

crucial for these advanced nodes was halted at the site for a

period of 8-to-15 hours.

Barclays analysts said some highly sophisticated

semiconductor fabs need to operate seamlessly 24/7 in a vacuum

state for several weeks and the halts would disrupt the process,

pushing up pricing pressure in the sector.

This could spillover to cause a "short-term hiccup" to

electronics manufacturing in economies focused on upstream

products, such as Japan and Korea, as well as economies focused

on downstream products, such as China and Vietnam, they said

However, the report noted that lower inventory levels among

customers could allow Taiwanese and Korean chipmakers to raise

prices.

(Reporting by Liam Mo and Brenda Goh; Additional reporting by

Sarah Wu and Utkarsh Shetti; Editing by Sharon Singleton and

Arun Koyyur)