At Extreme Investor Network, we strive to provide unique and valuable insights into the world of finance. Today, we take a look at the impact of the strongest quake to hit Taiwan in at least 25 years on the global supply chain.
Taiwan plays a crucial role in the production of chips for global firms, with chipmaker TSMC accounting for about 90% of the island’s production. The recent earthquake has raised concerns about the potential damage to TSMC’s fabrication plants, which are filled with fragile equipment essential for chip production.
TSMC has evacuated some of its plants and confirmed that its safety systems are operating normally. However, any serious damage to these facilities could have ripple effects throughout the world, emphasizing the importance of onshore production as proposed by U.S. President Joe Biden.
The impact of the earthquake was reflected in the stock prices of key players in the supply chain, with TSMC’s shares down 1.4%, Apple supplier Foxconn’s stock falling over 2%, and flat-panel maker Au Optronics dropping 1.7%.
Global markets also experienced some turbulence as investors awaited key data releases and an appearance from U.S. Federal Reserve Chair Jerome Powell. The bond market saw increased selling, pushing benchmark 10-year yields past major resistance levels.
In the foreign exchange market, traders are cautious amid warnings of possible intervention from Japanese authorities. The yen remained steady at 151.55 per dollar.
Looking ahead, European inflation figures are set to be released later in the session, with a slight cooling expected.
Key developments to watch on Wednesday include Eurozone inflation data, U.S. non-manufacturing ISM figures, and ADP employment numbers. Fed Chair Powell is also scheduled to deliver a speech.
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