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Taiwan drought at 'most critical' phase for chip sector

President Tsai calls for conservation in hard-hit semiconductor hub Taichung

Taiwan Semiconductor Manufacturing Co. consumes nearly 200,000 tons of water a day. (Photo courtesy of TSMC)

TAIPEI -- Taiwanese President Tsai Ing-wen on Tuesday called for more water conservation as the island's chipmaking industry faces the worst drought in nearly 60 years.

"Now is the most critical period for dealing with the drought," Tsai said on a visit to the hard-hit city of Taichung, a production hub for Taiwan Semiconductor Manufacturing Co., the world's largest contract chipmaker, as well as liquid crystal display manufacturers. The two industries consume large amounts of water.

Taichung has suffered the worst of a dry spell that has emerged as a threat to Taiwan's semiconductor device production. A global chip shortage has already taken hold owing to high demand, which has pitted car companies against makers of consumer electronics for output from TSMC, South Korea's Samsung Electronics and small number of other producers.

Tsai described the situation as "very serious."

The volume of water at two major dams in the Taichung area has fallen to around 5% capacity. The Ministry of Economic Affairs instituted a water ration on April 6, which required companies to reduce water usage by 15%.

As an emergency measure, there are plans to dig 58 wells within Taichung by the end of the month, which are supposed to provide 65,000 tons of water a day. Another 30 wells are forthcoming next month, supplying 50,000 tons of water daily. Some households in the city have had their water supply shut off for two days a week.

TSMC and other companies have taken matters into their own hands by transporting water from reservoirs in other parts of the island using tanker trucks. This is the first time TSMC used water tankers since 2015.

But this approach is not sustainable. Each truck carries 20 tons of water, but TSMC uses nearly 200,000 tons of water every day. As a long-term solution, the company is building a water recycling plant in the city of Tainan.

Some hope the rainy season, which normally arrives in May and June, will bring relief. A repeat of last year's dry conditions would put further strain on the chipmaking industry.

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