Typhoon-free summer in Taiwan bad news for chip productionNow a new problem rears its head. Reuters reports droughts in Taiwan are forcing chip foundries to truck in water. The island typically has a heavy rain season, but last year's summer was not only typhoon-free but also unusually dry.
Water levels in several reservoirs of Taiwan's central and southern regions have dropped below 20 percent. The situation near Hsinchu, where TSMC has its main operations, is even worse. Water levels at the Second Baoshan Reservoir have fallen to a dangerously low 14.6 percent. As a result, the Taiwanese government has demanded companies to conserve water.
This is a problem for the chip industry as the production of semiconductors requires a lot of water. TSMC reports it's now trucking in small loads of water to supply some of its Taiwanese facilities. Reuters writes Vanguard and UMC have also signed contracts with water truck firms.
“We are making preparations for our future water demand,” TSMC told Reuters, describing the move as a “pressure test”. The chip giant said it has seen no impact on production. Both Vanguard International Semiconductor Corporation and United Microelectronics Corp signed contracts with water trucks and said there was no impact on production.This isn't the first time TSMC has to truck in water, but it definitely comes at a bad moment and could potentially worsen chip shortages and/or result in price increases. At the moment, TSMC says it's not seeing an impact on production.