Taiwan’s Semi-conductor Technology and Typhoon Koinu

Super typhoon

In the eyes of the world, Taiwan is a technological giant, significantly leading in the semi-conductor chip technology industry. Its technological prowess, while remarkable, has found an unexpected adversary - the accelerating winds of climate change, as exemplified by the recent catastrophic Typhoon Koinu. The dance between advanced technology and escalating climatic conditions foretells a compelling narrative of connected risk and adaptative challenges. 

Typhoon Koinu, etching its name in meteorological records, unleashed one of the world’s third-most powerful wind gusts ever yesterday, impacting Taiwan’s Lanyu (Orchid) island with a speed of 342.7 km/h. Such gusts have not only shattered the records of Taiwan's Central Weather Administration but also obliterated the island’s anemometer, a device essential for measuring wind speed. Striking the southern tip of Taiwan, and leaving behind a trail of 200 injuries and colossal disruption in cities and travel, Koinu's trail of destruction mirrors the growing fury and unpredictability of climate patterns. Taiwan, despite its strategic geolocation that serves as an active ground for tropical cyclones, had only witnessed one other typhoon making landfall in the preceding four years, illustrating a notable surge in cyclonic activity. 


Typhoons and Technology Connected Risk

Meanwhile, on the technological front, Taiwan Semiconductor Manufacturing Co (TSMC) has been navigating through its own storms. Amidst rising chip manufacturing costs and geopolitical tensions, the company has aggressively scaled its capacity, introducing an average of six new factories annually in recent years. International strategies have seen TSMC extending its roots across the globe, including significant investments in the United States and Germany, aimed at strengthening its international presence and ensuring the resilience of its chip supply. In the shadows of geopolitical discord, nations including China, Japan, the EU, and the US are making concerted efforts to localize chip manufacturing, highlighting the potential perils that may arise from single points of failure in the event of international conflicts or natural disasters. 

This interplay between technology and meteorological extremism could not be more stark. Cities like Kaohsiung, not just a bustling port city but also a new home to TSMC’s production plants, find themselves at the intersect of these two dynamic forces. While Koinu weakened over Taiwan’s mountains before its encounter with the south of the country, the juxtaposition of these two contrasting yet interconnected stories paints a new picture of our global reality. The swiftness with which storms like Koinu are intensifying – consistently outpacing forecasts and generating surprises – adds a new layer of complexity to geopolitics and international business supply chains, particularly in technology-centric industries. 


Building Resilience In Intertwined Political and Environmental Climates 

The narrative of 2023 is not merely the storms that alter landscapes but the ones that metaphorically loom over our technological advancements and global supply chains. This year, Taiwan finds itself in the spotlight, in a place where cutting-edge technology collides with the accelerating pace of climate change. The story unfurling here is one that compels the global community to grapple with two intertwined crises – adapting our technological advancements to be resilient against the physical and political climates that envelop them. 

As we navigate through this era, where innocuous weather systems rapidly transform into formidable storms, and where technological development is interspersed with challenges from nature and geopolitics, a pressing question emerges: how do we safeguard our technological hubs from the tempests, both political and meteorological, that seek to erode them? The story of Taiwan, TSMC, and Typhoon Koinu serves as a stark reminder that, as we surge forward in technological advancements, we must also protect ourselves against the unpredictable and escalating threats of our changing world. 


Russell: Providing Insights into Trade Disruption 

Russell supports (re)insurers and businesses with their resilience, providing insights into trade disruption and building understanding of how storms interrupt onshore/offshore activities and travel. Our analysis can assess potential outcomes and quantify the potential economic loss for a business. We remain vigilant for more storms, at short notice, as the conditions for quickening storm formation are currently quite favourable, especially with most of the surrounding waters around Taiwan approaching or at their peak warmth, or even record warmth in some areas. As this week’s recent weather reports bear witness, current climate conditions can act like rocket fuel to these storms, with still over 30% of the season to go. 

Post Date: 05/10/2023

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