• A powerful earthquake happened in Taiwan on Wednesday morning with a magnitude- 7.4 off the coast of Hualien.

• Taiwan’s tech companies were assessing the impact.

• According to Nikkei Asia, Taiwan Semiconductor Manufacturing Co. (TSMC), the world top chipmaker stated that all personnel were safe but taken precautionary measures to evacuate some of its factories.

• We understand that there is no significant damage to TSMC’s most advanced extreme ultraviolet (UEV) lithography machines that make processors for artificial intelligence and mobile phones.

• TSMC mentioned that more than 80% of chipmaking tools and equipment operations were resumed. To address the short halt in operations, there is an expectation that TSMC’s staff may work over the holidays.

• According to Nikkei Asia, Nvidia also mentioned that it expects no impact to chip supply from Taiwan earthquake.

• For now, we understand that there will not be a significant impact to Malaysia’s semiconductor industry from this disaster given adequate chip inventory in the market.

• We maintain Overweight rating on the sector with Buy calls on Greatech Technolgy, Inari Amertron, Pentamaster, Vitrox and CTOS. Our HOLD calls are Malaysian Pacific Industries and Infomina.

Source: AmInvest Research - 4 Apr 2024