The earthquake in Taiwan measured 7.6 on the Richter scale and killed more than 1,500 people. It may also mean D-day for Taiwan's DRAM manufacturers, and potential trouble ahead for any company along the PC manufacturing chain that uses something made in Taiwan.
Shares in European and American semiconductor firms spiked up in response to news of the quake, but settled down on news that damage to Taiwan's foundries is still uncertain.
"Shoot first, ask questions later," was the market's strategy, said Carl Johnson, an analyst at Infrastructure, an Austin, Texas-based research firm. "Emotionally the market says, DRAM, fabless companies, the whole PC market could be affected. It could also disrupt the supply of motherboards, and have an interruption on revenue streams."
But the reality is that it's too early to assess the damage to the tech sector.
Most foundries, or semiconductor manufacturers that make chips for third parties, are located in Taiwan. Companies that outsource, such as PMC Sierra Inc. (Nasdaq: PMCS) could be adversely affected, while others, who compete with Taiwanese manufacturers in dynamic random access memory (DRAM) chips, such as Micron Technology, Inc. (NYSE: MU) could get a boost from the disaster.
If indeed foundries have been leveled, "its probably good news for the chip industry - it will probably put upward pressure on chip prices," said Dan Scovel, an analyst at Fahnestock and Company. It's just a scenario at this point, he added, predicting a wait of several days before the toll of the quake is known.
Here's a look at some of the stocks worth watching as the Taiwan damage is assessed:
Taiwan firms account for about five percent of the world DRAM market but their share is closer 12 percent including outsourcing for Japanese and other makers.
DRAM manufacturing would be much more complicated to resume than most other operations, Scovel added. Though he doesn't expect any third quarter problems. The fourth quarter, however, could become an issue.
"If motherboard production is interrupted, it would have a pronounced affect on Intel," Scovel said. Intel gets about 80 percent of revenue from the sales of microprocessors, he added. Intel shares were down 15/16 to 83 1/8.
Reuters contributed to this report.