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Semiconductors

TSMC tackles Taiwan drought with plant to reuse water for chips

Water shortages are forcing semiconductor sector to take action

Leading contract chipmaker Taiwan Semiconductor Manufacturing Co. has been using water trucks like these to help it weather a severe drought.   © AFP/Jiji

TAIPEI -- Taiwan Semiconductor Manufacturing Co., the world's biggest contract chipmaker, is building a plant capable of treating industrial water so it can be reused to make semiconductors -- part of efforts to tackle Taiwan's crippling water shortage.

TSMC said it would be the world's first such advanced industrial wastewater treatment center and could ultimately meet nearly half of its daily need for water for chip output.

Taiwan is facing its worst drought in more than 50 years. Chipmaking, the island's most important industry, is a voracious user of water -- which has to be of very high quality given the technical demands of advanced semiconductor manufacturing.

The company said the plant in the southern Taiwanese city of Tainan is under construction and will start operating by the end of 2021. It will be for TSMC's sole use, Lora Ho, senior vice president of Europe & Asia sales, said on Thursday.

Tainan is TSMC's most advanced chip production base, making cutting-edge 5 nanometer chips used in the latest Apple iPhones and MacBook processors.

"It will gradually ramp up the treatment capacity of industrial wastewater and by 2024 will be able to generate 67,000 tons of water daily that can go back into to the chipmaking process," said Ho, who is also the chairperson of TSMC's Corporate Social Responsibility Committee.

TSMC currently uses 156,000 tons of water a day, according to the company's latest available sustainability report. The company recycled 133.6 million tons of water in 2019, according to the same report, but only some of it was pure enough to be reused in the chip manufacturing process. 

TSMC CEO C.C. Wei recently said the water supply in Taiwan is tight but his company has long prepared for such a risk. "We are continuing our collaborative efforts with the government as well as with the private sector. ... We do not expect to see any material impact on our operations," he said.

The serious water shortage in Taiwan, one of the most important links in the world's tech supply chain, adds pressure to an industry already struggling with a severe global semiconductor shortage.

This month Taiwan's government started rationing water use by suspending water supplies for two days a week in some cities, including at some science parks -- the heart of the island's tech supply chain. The economic minister said the measure will last at least until the end of next month and will be adjusted as needed depending on rainfall amounts.

The areas affected by this suspension will have to rely on other sources, such as water trucks, local water storage facilities and groundwater.

Taiwan's top chipmakers including TSMC, United Microelectronics and Winbond have already started contingency plans, including mobilizing water trucks.

Several cities have started to drill wells to deal with the drought, in case there is further water rationing.

In the city of Taichung, where TSMC also operates a major plant, the government will drill 88 additional wells, according to the Water Resources agency.

Additional reporting by Lauly Li

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