It has been a little over two weeks since the quake hit Silicon Island and many of you may be wondering what it is like in Taiwan or how the damage might affect the Global IT industry. If you didn't already know it, Taiwan is third in the world in terms of the value of its IT industry just after the USA and Japan. They are major producers of motherboards, CRT monitors, CD-ROM drives, Optical storage discs, keyboards, graphic cards, semiconductors and notebook PCs, to name a few. Looking at photos from your local newspaper or images on CNN or the BBC you might be thinking how could the quake have not affected the global IT industry.

Right after the 921 Quake hit (921 is the official name of the quake now, easy for history students) people were actually saying it wouldn't have much affect on Taiwan's IT industry. The next day after they had an opportunity to assess the damages though, everyone began talking about price rises due to shortages of certain key components. Later everyone discovered the main problem it seems was not so much the structural damage caused to industrial buildings, but the subsequent power outage and rationing that caused even more problems. Presently there are mixed reports about little or no shortages, such as in the case of the little LCD screens on mobile phones and graphics chips from ATI, S3, and Nvidia. While others are reporting of continued shortages of certain components necessary for motherboards and other peripherals and the subsequent price rises. One thing is for sure, DRAM prices continue to rise with demand and this is causing much of the price rise.

A short aside which must be said is that even though damages are not so bad for the IT industry in Northern Taiwan, this is not meant to demean the losses in Central Taiwan at the epicenter where the horror stories and main damage is. In that area some towns had 95% of the buildings destroyed. In total some 13,000 buildings were damaged and over 100,000 people are still left homeless, now living in tent cities on military land. Keep in mind that Taiwan is one of the most densely populated countries in the world, around 573 people per square kilometer with over 22 million people squeezed into valleys and flatlands in this mostly mountainous country less than the size of Maryland and Delaware combined. In the Central Taiwan area not only was the building-scape felled like a house of cards, but also new maps must be made as the landscape was forever altered. Mountains actually fell down, new lakes were created and many downtown areas were either pushed up or sunk down many meters. Hence the horrid injuries, loss of life and property destruction, currently at over 2,300 dead, and over 8,700 injured.

Further North from the epicenter is Hsinchu Science Park, which is home to Taiwan's own version of Silicon Valley, with California style homes, tree-lined streets and bi-lingual schools, all set up to lure the Taiwanese expatriate engineers back from the USA. This is the place where the main semiconductor factories are and although not suffering any serious structural damage, the sensitive equipment used in making semi-conductors was jolted and damaged in the quake. Replacement parts were dramatically flown in from all over the world including Japan and the USA. It is interesting to point out that these semiconductor companies are the foundries for many of the worldwide fabless IC designers such as Nvidia, S3, ATI, VIA, SiS and Ali just to name a few. It took about 10 to 11 days for the two major companies that make these chips, TSMC and UMC to return to pre-quake levels of production as they were with limited or no power for several days following the 921 Quake. One thing worth noting, TSMC was one of the first companies in Taiwan to have power restored, but there was no animosity as everyone knows the crucial role this company plays in the economy. TSMC estimates damages at around $6 million and UMC estimates theirs at $9 million although they both were insured. Hsinchu Science Park has reported recently that they will begin construction soon on a special power station to limit any similar losses in the future. Another side not, although these IT companies were insured, it should be pointed out that less than 1% of Taiwanese home owners have any earthquake insurance, of course lately the demand has been extremely high.