What Are the Key Causes of Fab Shutdowns Since 2024?

Article Highlights:

• There are currently only between 260 and 270 fabs in active operation worldwide. As a result, hundreds of thousands of manufacturers all over the world rely on just a few hundred fabs to make the chips that ultimately serve a vital role in their products.
• While fabs in Asia suffered through earthquakes and their aftereffects, U.S.-based facilities contended with issues that were almost entirely internal. Manufacturers like Wolfspeed, NXP Semiconductors, and Microchip Technology shuttered plants from Southern California to North Carolina in an effort to restructure their companies, shift focus to different production lines, or shore up financial fundamentals.
• One variety of disruption that’s very difficult to mitigate is natural disasters—and in particular, earthquakes. This is a major issue for Taiwan, which fabricates 60% of the world’s chips and is one of the most earthquake-prone countries in the world.

As semiconductors become increasingly integral to everything from computers and automobiles to medical devices and data centers, there is immense pressure on the facilities responsible for manufacturing them. Known as fabs—short for fabrication plants—these sites are highly sophisticated factories equipped with some of the world’s most advanced technology and specialized expertise. These facilities require substantial capital investments—often in the billions of dollars—to be built. Because of this, there are currently only between 260 and 270 fabs in active operation worldwide. As a result, hundreds of thousands of manufacturers all over the world rely on just a few hundred fabs to make the chips that ultimately serve a vital role in their products.

Due to the irreplaceable role they play in global supply chains, there’s a powerful incentive for fabs to continue operating 24 hours a day, seven days a week, 365 days a year. To lose any time at one of these plants means compromising production continuity for hundreds or even thousands of manufacturers all over the world—not to mention jeopardizing revenue and profit margins for the foundries that run them. An unforeseen shutdown at any of these facilities, in other words, is a very big deal. 

Below, we share two major takeaways from our analysis of fab disruptions over the past two years, based on internal Z2Data data of temporary and permanent shutdowns dating back to January 2024. In addition, we’ve provided examples of shutdowns as specific fabs that exemplify our top takeaways. 

Key Takeaways for Semiconductor Fab Risk

With less than 270 fabs in active operation worldwide, each wafer plant is a critical node in the global semiconductor manufacturing ecosystem. Because of this, understanding why, when, and how often they shut down can be vital intelligence for the original equipment manufacturers (OEMs) and other businesses that source from them. 

Key Takeaway 1: The Internal Risks of U.S.-Based Fabs

Our data analysis found 10 different closures to fabs based in the U.S. from January 2024 through June 2025. The reasons behind these closures and the shutdowns we analyzed in East Asia—where the majority of the world’s other fabs are located—could not be more different. 

While fabs in countries like Japan and Taiwan suffered through earthquakes and their aftereffects, U.S.-based facilities contended with issues that were almost entirely internal. Manufacturers like Wolfspeed, NXP Semiconductors, and Microchip Technology shuttered plants from Southern California to North Carolina in an effort to restructure their companies, shift focus to different production lines, or shore up financial fundamentals. In every case, it wasn’t an external event like an earthquake, transportation shutdown, or geopolitical conflict that triggered the closure, but rather the foundry’s own strategic decisions. 

Equally interesting, arguably, is that these internal decisions almost always led to permanent closures of the fabs, rather than the temporary shutdowns most often observed in nations like Taiwan, Japan, and South Korea over the past two years. These divergent trends suggest that U.S. chipmakers may be facing greater levels of financial instability, and consequently face a higher risk of shutting down operations to cut costs or pivot to new strategies. 

These divergent trends suggest that U.S. chipmakers may be facing greater levels of financial instability, and consequently face a higher risk of shutting down operations to cut costs or pivot to new strategies. 

Notable U.S. Fabs Closed Due to Internal Decisions Since 2024

Foundry: Microchip Technology

Fab Name: Fab 4

Location: Gresham, Oregon

After absorbing declines in revenue for five consecutive quarters, Microchip Technology opted to put workers on temporary furlough at its Gresham, Oregon fab on two separate occasions in 2024: for two weeks in March and another two weeks in June. Unlike most of the other shutdowns at U.S. fabs, however, Microchip Technology’s Gresham fab resumed operations after both production suspensions. 

Foundry: Wolfspeed

Fab Name: 150mm Silicon Carbide Fab 

Location: Durham, North Carolina

In late 2024, Wolfspeed announced that it would be permanently closing its 150mm silicon carbide plant in Durham, North Carolina. The closure came as part of a larger strategic effort to shift the company’s resources to 200mm silicon carbide production. “This quarter we took action to solidify the capital structure, simplifying our business to accelerate structural profitability and support the build out of our state-of-the-art silicon carbide facilities,” Gregg Lowe, CEO of Wolfspeed, said in November 2024. “The transition to a fully 200mm platform allows us to take further initiatives to streamline our cost structure, including closing our manual Durham 150mm fab, other manufacturing footprint rationalization, and reducing our workforce.”

Wolfspeed’s closure of its 150mm Durham facility was hardly an outlier, but rather representative of the strategic measures taken by a raft of U.S. foundries over the past two years. 

Key Takeaway 2: The Unavoidability of Natural Disasters

In order to remain profitable and satisfy demand from a sprawling marketplace encompassing a myriad of different industries, fabs typically stay open 24 hours a day, 365 days a year. Whether an unforeseen closure shuts a fab down for a few hours or a few days, the foundry loses precious time, production, and revenue in the process. Because of this, chipmakers do everything in their power to ensure that their facilities are insulated from disruptions, including shortages, labor strikes, geopolitical issues, and equipment failures. 

Whether an unforeseen closure shuts a fab down for a few hours or a few days, the foundry loses precious time, production, and revenue in the process.

One variety of disruption that can’t be mitigated, however, is natural disasters—and in particular, earthquakes. This is a major issue for Taiwan, which fabricates 60% of the world’s chips and is one of the most earthquake-prone countries in the world.

Because of Taiwan’s vulnerability to earthquakes, the risks to semiconductor manufacturing might appear inescapable: most OEMs that source semiconductors can’t avoid supply chains that pass through Taiwan, and earthquakes are an inevitability for that country. But there are supply chain risk management (SCRM) measures organizations can take to reduce the impact of these shutdowns, including identifying fab dependencies and utilizing real-time monitoring to get updated on shutdowns as soon as they occur. 

Notable Fabs Shut Down Due to Natural Disasters Since 2024

Foundry: TSMC

Fab Name: Fab 18

Location: Tainan

Taiwan Semiconductor Manufacturing Company’s Fab 18 is located in the Southern Taiwan Science Park in Tainan.  The fabrication plant is one of TSMC’s most productive and is responsible for producing 150,000 12-inch wafers per month. Fab 18 has been temporarily closed five times since the beginning of 2024, experiencing more shutdowns than any other fab in our database. The causes are all related to earthquakes, and the closures were triggered in April 2024, November of 2024, and January 2025. 

Foundry: TSMC

Fab Name: Fab 14

Location: Tainan

As with Fab 18, TSMC’s fab 14 operates within the Southern Taiwan Science Park, in Tainan. Fab 14 currently specializes in 12-inch wafers, with a capacity of over 360,000 wafers produced per month. This critical semiconductor manufacturing node has undergone four shutdowns since the beginning of 2024, all of which were related to earthquakes. The closures were triggered by evacuations and other precautionary measures in November 2024 and January 2025. 

Foundry: TSMC

Fab Name: Fab 6

Location: Tainan

Fab 6 is situated in the same science park as TSMC’s Fabs 18 and 14. This fabrication facility is focused on 8-inch wafers, producing just under 100,000 monthly. Fab 6 has been temporarily shut down three times since January 2024, all closures related to earthquakes that struck Taiwan in November 2024 and January 2025. 

Foundry: United Microelectronics Corporation

Fab Name: Fab 12A

Location: Tainan

Just like TMSC’s impacted fabs, United Microelectronics Corporation’s Fab 12A operates in Tainan, and thus has been similarly impacted by multiple earthquakes. Over the past 20 months, these natural disasters have triggered three shutdowns that temporarily halted the fab’s output of 200,000 wafers a month. 

Applications of This Data

In recent years, some OEMs and other businesses have tried to establish closer ties with the semiconductor manufacturers in their supply chains. Securing this level of communication and visibility into suppliers strengthens supply chain resilience and gives organizations the foresight and flexibility so crucial to proactive risk management. The insights in this article are intended to complement efforts like these, helping sourcing and procurement professionals and their businesses gain a more nuanced understanding of the vulnerabilities underlying the semiconductor manufacturing landscape. 

• Making Sourcing Decisions: The risk landscape is dynamic, constantly evolving from one year to the next. Because of this, seeing the highest-risk fabs over the past 20 months—and what events triggered their shutdowns—can provide clues into what fab risk looks like on the ground in 2025. In addition, understanding the threats associated with specific geographical regions can help teams make more prudent, informed sourcing decisions, setting themselves up to be more vigilant about specific sites and manufacturers. 

• Avoiding Single-Source Dependences: Single-source dependencies occur when an OEM or other company relies on a single country, manufacturer, or site for specific parts or products. It’s exceedingly difficult for businesses to practice dual or multi-sourcing for every commodity and part they source, and thus some degree of single-source dependency is largely unavoidable. The data intelligence found in this article can help firms identify where single-source dependencies post the highest risks, though, and therefore what manufacturers and sites warrant the most attention and risk mitigation. Businesses that source from fabs in regions highly vulnerable to earthquakes, or countries whose businesses are facing significant financial instability, may want to consider developing alternative sourcing measures. 

• Implementing SCRM Measures: Finally, understanding the risk landscape for fabs can help businesses start the process of implementing supply chain risk management measures to mitigate disruption threats. Whether a firm is interested in pursuing multi-sourcing, de-risking, contractual outs, or strategic inventory stockpiling, fab disruption data and the insights gleaned from it can help refine strategy and sharpen SCRM. 

Z2Data Fab Disruption Methodology 

To obtain the data in this article, we searched our databases for all disruptions that impacted fabrication plants between January 2024 through June 2025. Crucially, we only pulled incidents that resulted in a temporary or permanent closure of the facility. Using trusted news agencies, supplier websites, and other high-credibility sources, we also categorized the disruptions based on the nature of the event and its severity. 

Analyze Fab Data With the Z2Data Platform

For many OEMs, fabs are among the single most important nodes in their entire supply chains. Industry-leading SCRM platform Z2Data can map a business’s supply chain multiple tiers down, identifying the fabs it relies on for their production. In addition, Z2Data maintains profiles of fabs all over the world, offering detailed risk assessments for both the operating manufacturers and the sites themselves. Using key criteria like technology node, country of origin (COO), and sourcing status, Z2Data provides businesses with an effective, actionable gauge of the risk posed by individual fabs. 

For businesses that depend on DRAM memory, transistors, MOSFETs, field-programmable gate arrays (FPGAs), and other in-demand semiconductors, these are powerful insights that can inform risk management and strategic decision-making. To learn more about Z2Data and how its fab data and intelligence can help your company assess risk and respond effectively, schedule a free demo with one of our product experts.