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Economy

Taiwan faces stricter water rationing as record drought worsens

Stricter COVID measures extended to entire island as cases surge

Soldiers dredge the Shihmen Reservoir in northern Taiwan on May 3 amid the island's drought. (Photo by Office of the President of Taiwan)

TAIPEI -- On top of a surge in COVID-19 cases and power outages, Taiwan is suffering from its worst drought in 56 years.

The Ministry of Economic Affairs said Wednesday it will further tighten water supplies from June in several cities including Hsinchu, the heart of the nation's semiconductor supply chains, if rainfall is insufficient by the end of May.

More severe water rationing will apply to Hsinchu, Taoyuan, New Taipei, and the southern Taiwanese cities of Tainan and Kaohsiung. Miaoli, Taichung, and northern Changhua will continue their stricter water usage rules.

For Hsinchu, the government plans to suspend the use of water two days a week and reduce daily consumption by 17% compared to normal levels in its science park, where chipmakers of Taiwan Semiconductor Manufacturing Co. and United Microelectronics are based, if the situation worsens toward the end of this month.

The daily water reduction plan in New Taipei and Taoyuan -- home of the island's print circuit board manufacturing hub -- will increase to 15% from 13%. Large industrial water users in Tainan and Kaohsiung will face a cut to 13% from the current 11% from Friday.

The serious water shortage will add pressure to a semiconductor industry that is already suffering an unprecedented chip shortage.

TSMC, UMC and many other manufacturers have been running at full capacity to churn out chips for addressing the huge demand across sectors from smartphones, PCs and servers, to automobiles. Major car making economies like the U.S., Germany, Japan and South Korea have all pressured Taiwan to prioritize auto chips.

The announcement on water restrictions comes as Taiwan on Wednesday raised its COVID-19 alert level for the whole island. Previously it had just been Taipei City and New Taipei under level three restrictions -- one step below a de facto lockdown. The island has also suffered two major blackouts in less than a week as demand spiked amid the drought and a power plant malfunction.

"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 Water Resources Agency said.

An official at the Hsinchu Science Park said most of the companies can achieve the water rationing level of 15%, but it will be "a bit" inadequate for some of the suppliers if the daily reduction level increases to 17%.

"Water trucks will be mobilized to support companies who really need water...There should be no impact on the production [at the science park]," the official said.

Lai Chien-hsin, director of the Water Resources Agency, said the government has been helping to increase the supply of water, such as drilling wells for ground water and building new desalination plants. This could increase supply by more than 500,000 tonnes of water per day by June to minimize any impact on industrial and civilian water use.

May is the traditional monsoon season in Taiwan, and rain this month had been expected to ease the drought. However, this has yet to be the case.

The water reserve rate at Shihmen Reservoir, one of the key reservoirs that supplies New Taipei, Taoyuan, and Hsinchu, dipped to 11% as of noon Wednesday noon. This suggests water supply from the reservoir could last only 21 days without rainfall, according to Taiwanstats, an open site that cites real-time data from the island's Water Resources Agency.

Two reservoirs -- Nanhua Reservoir and the Tsengwen Reservoir, Taiwan's biggest -- are key water sources for the Tainan Science Park where TSMC operates its most advanced chip production sites. They had reserve rates of only 11% and 6% as of Wednesday, the open data showed.

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