In brief: Think the global chip shortage crisis couldn't get any worse? Think again. Taiwan's worst drought in decades is showing no signs of abating, leading to authorities introducing further restrictions in areas including two major science parks—home to major semiconductor and display companies such as TSMC.
Taiwan is facing its worst drought in 56 years after a drop in rainfall combined with a lack of typhoons in 2020; it's usually hit by three or four tropical storms annually. Minister of Economic Affairs, Wang Mei-hua, recently said the dry spell has not yet impacted TSMC or other companies, but with a typical semiconductor manufacturing facility using two to four million gallons of ultra-pure water per day, it's a precarious situation.
As the drought worsens, officials have issued Taiwan's first red alert on water supply in six years. Authorities will cut water supplies to industrial users in the central counties of Taichung, Miaoli, and Changhua by 15% from April 6, reports Bloomberg. Additionally, tap water will be suspended in the areas for two days per week, but this won't apply to industries.
"The scope of the water-saving plan does include the science parks in Taichung and Miaoli. We would advise those companies that are within the scope that could face a two-day water-outage to reserve water or mobilize water trucks in advance," said Wang Yi-feng, deputy director-general of Taiwan's Water Resources Agency, told Nikkei Asia.
TSMC and Micron both have operations in Taichung. The former said it would increase the amount of water it uses from tanker trucks and that the restrictions won't affect operations, while the latter declined to comment as it is now in a "quiet period."
AUO, Micron, TSMC, and Winbond have fabs in Taichung. Innolux and GlobalWafers have fabs in Miaoli, and Phison has a factory in the country, reports Tom's Hardware. If the drought does start impacting manufacturing at these plants, it will exacerbate the global chip shortage, further reducing availability and pushing up prices of GPUs and displays.
"Like [Innolux], we also have signed contracts with water truck companies, but we see that as the last resort," said Paul Peng, chairman of AUO. "We are prepared. We have a water storage facility underneath each of our plants in Taiwan. Some of the plants have stored up to 10 days of water supply [for our use]."
Taiwan previously said that its tech industry has enough water to last until May. Let's hope the situation is resolved by then.
Center image credit: Romix Image