Droughts force TSMC to truck in water

Posted on Thursday, February 25 2021 @ 12:43 CET by Thomas De Maesschalck
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Global chip production just can't seem to get a break. Since last year, shortages have become commonplace in a lot of industries. On one hand, you have exceptionally high demand, and on the other hand, there are issues with scaling up production. These problems are further exacerbated by temporary issues like last week's winter storms in the US, which resulted in shutdowns of chip factories in Texas to conserve electricity.

Typhoon-free summer in Taiwan bad news for chip production

Now 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.

Shortages throughout 2022 too?!

Next, a DigiTimes report claims shortages of various components could last a lot longer than expected. Taiwan-based SSD controller maker Silicon Motion expects capacity constraints at foundry and backend providers will likely cause the global shortage of semiconductors to persist through 2022. The site also picked up news that MOSFET makers will "sharply" increase prices in the coming months.

About the Author

Thomas De Maesschalck

Thomas has been messing with computer since early childhood and firmly believes the Internet is the best thing since sliced bread. Enjoys playing with new tech, is fascinated by science, and passionate about financial markets. When not behind a computer, he can be found with running shoes on or lifting heavy weights in the weight room.

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