Taiwan Companies Geared to Face Fresh COVID-19 Wave

  • Taiwan raised its epidemic warning for the whole country to Level 3 on May 19 in response to a rapid increase in local confirmed cases of COVID-19.
  • Major semiconductor and component companies in Taiwan announced a series of steps over the weekend to minimize the pandemic risk, including working in separate teams and working from home (WFH).
  • Counterpoint believes there will be only a limited impact on the semiconductor shortages being faced globally.

After raising its epidemic warning to Level 2 on May 11, the Taiwan Central Epidemic Control Center (CECC) again raised it to Level 3 on May 15 for Taipei City (Taiwan’s capital city) and New Taipei City (Taiwan’s largest city). It further raised the warning level for the rest of the island to Level 3 on May 19, in response to a surge in COVID-19 cases amid an increased risk of community transmission.

Confirmed COVID-19 Cases in Taiwan in 2021 by Week

The new wave of domestic infections started from an outbreak at a major airline in Taiwan. It has already caused hundreds of local confirmed cases, accounting for over 90% of total local transmitted (and confirmed) cases since the beginning of the pandemic in 2020. That said, before this airline outbreak, Taiwan was only reporting zero or single digit confirmed cases per day entering 2021, and most of them were imported cases.

Restrictions on indoor and outdoor activities

The Level 3 restrictions will remain in force until May 28. Taipei City and New Taipei City reported the most confirmed cases recently. Taipei City accounts for 11% of Taiwan’s population and New Taipei City accounts for 17%. According to Taiwan National Statistics, Taipei City and New Taipei City together contribute 43% of Taiwan’s revenue. Therefore, the restrictions imposed on enterprises under Level 3 could trigger certain concerns over Taiwan’s economic momentum.

In general, Level 3 restrictions bar indoor activities involving more than five people or outdoor activities involving more than 10 people. However, such activities can be allowed if the organizers follow government rules and get approvals from the regulatory authority. For example, the government rules for such gatherings require the participants to sit separated by a vacant seat, to wear masks, to record their name and contact information, and not to have food and beverages.

Non-Taiwanese can’t enter Taiwan

Following the CECC announcement, border restrictions were brought on May 17. Under these, only Taiwanese and people who have a resident certificate are allowed to enter or transit through Taiwan. The border restrictions are subject to adjustments on a rolling basis along with epidemic warning.

What Taiwan companies are doing

Based on our research, 55% of leading-edge (10 nm and below) logic IC capacity and 45% of total logic foundry capacity is located in Taiwan. Combined with other key component vendors and ODMs, Taiwan is a major player in the global supply chain. Therefore, the companies based here are more careful on COVID-19.


  1. The company will start working in separate teams and on rotational schedules and WFH from May 19.
  2. TSMC has its major foundry capacities in Hsinchu (Northern Taiwan), Taichung (Central Taiwan) and Tainan (Southern Taiwan).
  3. All non-essential vendors will be restricted from entering TSMC facilities. Face-to-face meetings stand canceled while TSMC staff and vendors have been told to avoid moving across the company’s main production sites.


  1. Mediatek has announced a WFH policy for its employees in Taipei City and New Taipei City for the May 17-May 28 period.
  2. The staff in Hsinchu will begin separate team operations.


  1. Realtek’s WFH policy and separate team operations at its Hsinchu office will remain in force from May 17 to June 8.


  1. UMC announced its separate team operations on May 17. The staff has been asked not to move across its three different operating areas (Taipei, Hsinchu and Tainan) until May 28.
  2. The company says it will follow stricter rules than local governments during epidemic outbreaks. Restrictions have been placed on the entry of non-essential vendors and guests to UMC facilities.


  1. Vanguard’s non-production line employees will enter separate team operations and follow a WFH policy from May 19 to June 15.
  2. Non-essential vendors and guests are not allowed to enter Vanguard’s fab and offices.

Foxconn/Hon Hai

  • Hon Hai, the major iPhone and other smartphone assembler, has announced a WFH policy for its employees for the May 17-May 28 period.

CECC’s Four-tier Epidemic Warnings

CECC’s Four-tier Epidemic Warnings

What if Taiwan raises warning to Level 4

If local cases continue to accumulate in the next few days and hit the 100+ cases per day mark for two weeks, with more than half being of unknown origins, Taiwan will need to impose Level 4 restrictions.

Under Level 4, people can leave home only for essential activities (like buying daily necessities). Besides, all in-person school and work is suspended, and companies and schools must implement WFH and remote education. Last but not least, lockdowns will be activated in cities/towns where outbreaks become severe.

However, according to CECC, the possibility of Taiwan entering Level 4 warning is low. The country is comparatively better placed in dealing with this pandemic due to its experience in tackling the SARS outbreak of 2003 and the first wave of COVID-19 last year.


There is no doubt Taiwan is facing a bigger COVID-19 risk this time. However, companies with larger scales (like those listed above) have already raised their pandemic prevention measures to Level 3 and will manage to limit any negative impact. Therefore, unless Taiwan is forced to raise the epidemic warning to Level 4, we do not see any major concern over capacity constraints.

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