Taiwan Drought: Microchip Lead Times Soar As Curbs On Water Use Tighten

Near-empty Reservoirs Prompt 17 Percent Cut In Water Consumption

26 May 2021 by OOSKAnews Correspondent
Taipei, Taiwan

Semiconductor chips

Taiwan will tighten water restrictions from 1 June if there is no significant rainfall by the end of May, with the most severe rationing aimed at the regions home to Taiwan's major chipmakers.

On the science park in the city of Hsinchu, where Taiwan Semiconductor Manufacturing Co. (TSMC) and United Microelectronics Co. (UMC) have production facilities, the government plans to introduce a ban on water use for two days a week and reduce daily consumption by 17 Percent.

Other major industrial centres in New Taipei, Taoyuan, Tainan and Kaohsiung face usage restrictions of 13-15 Percent.

Data from Taiwan's Water Resources Agency (WRA) show that reserve rates at Taiwan's two biggest reservoirs, Nanhua and Tsengwen, which supply the Tainan Science Park, currently stand at 9 Percent and 6 Percent respectively. TSMC operates its most advanced chip production sites at that location.

The Shihmen Reservoir, which supplies Hsinchu, New Taipei and Taoyuan, stands at 10 Percent. The WRA says that this is enough for just 21 days without rainfall. An WRA official said: "We are facing the most serious drought ever. The last time we had obvious rainfall across Taiwan was 360 days ago."

An official at the Hsinschu Science Park told Nikkei Asia that manufacturers could just about manage the 15% rationing, but that 17 Percent will be "a bit" inadequate.

Chip manufacturers in Taiwan have been running flat out to fill a severe chip shortage that is impacting several major industries. The worst hit is the global automotive sector, which relies heavily on semiconductors, with many manufacturers having to rearrange lines and even pause production as they face average delivery lead times of 17 weeks. The sector may incur $110 Billion USD in lost sales in 2021 due to component shortages according to analysis by consulting firm AlixPartners.

Nevertheless, Taiwan's chipmakers and government officials insist that the water restrictions will not negatively impact production, despite semiconductor manufacturing being highly water intensive. According to TSMC’s own figures, it needs 156,000 tonnes of water a day, a large proportion of which is Ultra Pure Water (UPW), which is thousands of times purer than drinking water and so clean that it is regarded as an industrial solvent. However, a large proportion of that water is recycled. TSMC says it reused 86.7 Percent of its water in 2019.

Photo credit: Taiwan Semiconductor Manufacturing Co., Ltd.

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