Taiwan Shutdown Adds to Weather Risks Facing Asia’s Trade-Dependent Economies

Taiwan suspended stock trading, closed schools and government offices across several northern and eastern districts Friday as Typhoon Bavi approached, disrupting flights and prompting businesses across Asia to monitor potential effects on semiconductor production, shipping and regional supply chains.

The disruptions underscore Taiwan’s importance as a global technology manufacturing and trade hub. Semiconductor manufacturing, shipping and air travel in the Asia-Pacific can be impacted even by temporary closures due to weather. Temporary closures caused by weather can impact semiconductor manufacturing, shipping and air travel, especially during high typhoon season.

Storm Track and Scale

Typhoon Bavi was tracking northwest toward China’s eastern coast with maximum sustained winds of 157 kph, equivalent to a Category 2 hurricane, according to the U.S. Joint Typhoon Warning Center. Although the storm was not forecast to make direct landfall in Taiwan, forecasters warned that its outer rain bands could trigger widespread flooding across the island.

Taiwan’s Central Weather Administration (CWA) said Bavi has the largest storm radius of any typhoon to approach the island since 1987. CWA forecaster Jason Chang said storms of similar size have been “fairly rare in recent years.”

The China Meteorological Administration predicts Bavi will reach sustained wind speeds of up to 173 kph and will hit Fujian’s coast of China on Saturday night. Authorities predicted rainfall of up to 600 millimeters in Fujian and Zhejiang provinces up to Sunday with up to 350 in parts of Beijing and Hebei.

Schools, Offices and Stock Market Close

Local governments in Taipei, New Taipei, Keelung, Taoyuan, Hsinchu City, Hsinchu County, Miaoli County, Yilan County and Hualien County suspended classes and closed government offices Friday. Taichung City announced similar closures beginning at 6 p.m. Friday through Saturday.

The Taipei City Government said schools and government offices would remain closed because of the approaching typhoon. Separately, the Taiwan Stock Exchange confirmed it had suspended trading for Friday.

More Than 400 Flights Canceled

Travel disruptions spread quickly across the region.

Taiwan’s Civil Aeronautics Administration said 154 domestic flights and 261 international and cross-strait flights had been canceled as of Friday morning.

Taiwan Taoyuan International Airport announced that China Airlines and EVA Air would suspend arrivals and departures between 6 p.m. Friday and 4 a.m. Sunday. Starlux Airlines and Tigerair Taiwan also canceled all Saturday flights.

EVA Air said four long-haul departures from Taoyuan to New York, Toronto, Washington and Dallas would continue operating as scheduled. Singapore Airlines canceled two Taipei-Singapore services scheduled for Saturday.

Over 40 flights by Cathay Pacific Airways, HK Express, Hong Kong Airlines, Greater Bay Airlines and EVA Air were cancelled or delayed in Hong Kong, impacting flights to Taiwan, Okinawa and other regional destinations. The two major airlines, Cathay Pacific and HK Express also waived ticket change fees for affected passengers.

Supply Chains Under Watch

Businesses across Asia are closely monitoring potential disruptions to trade and manufacturing as the storm approaches.

Logistics company Logfret said delays in port operations, manufacturing activity and inland transportation could disrupt export schedules, inventory replenishment and regional distribution across industries including electronics, automotive manufacturing and consumer goods.

The timing has drawn attention to Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker and a key supplier to companies including Nvidia, Apple and AMD. TSMC said the release of its June revenue report had been postponed because of the typhoon and is now scheduled for July 13.

Taiwan is at the heart of the semiconductor sector, manufacturing most of the world’s most advanced semiconductors. Technology firms and manufacturers around the globe are keenly following the island’s manufacturing and logistics disruptions.

Vessel-tracking data from Signal Ocean revealed vessels deviating from the track of Bavi before the storm. There was a risk of disruptions for dry bulk carriers, container and tankers and gas carriers, and some Chinese ports would be operating with reduced cargo volumes for safety reasons, creating shipping congestion.

China Prepares for Landfall

The Chinese government has cautioned that Typhoon Bavi may cause heavy rainfall over the vast area of the country due to the southwest monsoon, especially as there has been heavy rainfall in the country for the past few weeks.

“Remnants and the moisture plume could bring significant inland and northward rains even after the damaging winds fade,” meteorologist Caron said Taipei Times. “That makes flooding possible well north and inland of the eventual landfall point.”

The National Meteorological Center of China has declared an Orange Warning, the second most serious alert on their four-level warning system. The agency predicted Bavi would hit the coast Saturday night between the Xiapu city in Fujian province and the Wenling city in Zhejiang province.

Authorities in both Taiwan and China urged residents to monitor official weather advisories as the storm continued moving toward China’s eastern coast.