TAIPEI — Taiwan’s chipmakers, which account for about a quarter of the world’s semiconductor output, are struggling to meet soaring demand just as a drought threatens to crimp their production.
Taiwan President Tsai Ing-wen has called on the island to conserve water and prepare for a drought. It’s Taiwan’s worst water shortage in 56 years, she said in a Facebook post.
The drought comes just as global manufacturers ranging from automakers to smartphone companies say they can’t get enough chips from Taiwan. Those chip customers have been forced to shutter production lines and face billions of dollars of losses.
“TSMC maintains contingency plans for each stage of water restrictions,” the company said in a statement to EE Times. TSMC is “ordering small amounts of water by the truckload for some of our facilities as a dry run. So far, there’s no impact on production.”
TSMC’s smaller rival, United Microelectronics Corp. (UMC) had a similar response.
“UMC has dispatched industrial water trucks,” the company said in an email to EE Times. “Only a small amount of additional water is needed at the moment.”
Taiwan is a place where drought, earthquakes and the threat of invasion by China have at times had an impact on semiconductor production. In September 1999, a 7.6-magnitude earthquake, the largest in the island’s recent history, caused widespread power outages for about a week, suspending production of 10% of the world’s chip supply. Taiwan’s government-run power supplier restored electricity to chipmakers within one day.
In spite of such obstacles, Taiwan has become “indispensable” as a global chip supplier, according to Frank Huang, chairman of Powerchip Semiconductor. Powerchip makes memory chips in Taiwan.
The world has become increasingly dependent on Taiwan for chip supplies since the earthquake more than 20 years ago. TSMC today makes semiconductors for companies ranging from Apple to Xilinx, using the world’s most advanced production technology, currently at the 5nm node.
Both TSMC and UMC say they have been exceeding regulations on water recycling for years. TSMC’s average recycling rate in production processes reached 86.7% in 2019, with the total amount of water recycled by TSMC reaching 133.6 million tons and surpassing annual water conservation targets by 187%, the company said in a statement on its website.
In its three locations at science parks in Taiwan, TSMC during 2019 was consuming 156,000 metric tons of water per day, or about 5.2% of the 2,957,000 metric tons available from nearby reservoirs, according to information from the company. That data includes a TSMC roadmap through 2024 to increase water reclamation.
UMC during 2019 was consuming 31,500 tons of water per day at its two locations in Taiwan’s science parks, according to the company.
TSMC and UMC do most of their production in the Tainan Science Park in the southern part of the island, where rainfall is particularly scarce during the summer. The Tainan Science Park is also a location where other chipmakers and LCD makers have production facilities that use significant amounts of water.