Joining silicon shortages and limited factory capacity in delaying Taiwanese chip production, more mundane resource shortages such as a lack of water in Taiwan are also threatening to slow chipmakers' pace, although the companies have a plan to compensate for the island's recent drought.
DigiTimes today reported that TSMC, UMC, and other chipmakers in Taiwan plan to purchase water by the truckload to minimize a regional water shortage’s effect on their already strained production capabilities. The chipmakers' reportedly plan to purchase a combined 3,600 metric tons of water this week, and more could follow.
Reuters reported that ”water levels in several reservoirs in the island’s central and southern region stand at below 20%,” leading Taiwan Economy Minister Wang Mei-hua to say the government has “planned for the worst,” and that it hopes “companies can reduce water usage by 7% to 11%” in response to the shortages.
Taiwan is no stranger to water shortages. The BBC reported in 2015 that up to 3 million people could go without water as the country faced record droughts. Those issues persisted, and Taiwan News said in January that 2020 was “particularly dry” because a typhoon didn’t strike during the flood season for the first time since 1964.
The combined 3,600 metric tons purchased by TSMC and UMC pales in comparison to the amount of water used by companies at the Southern Taiwan Science Park. DigitTimes reported that companies in the park use a combined 175,000 metric tons of water every day; the 3,600 being trucked in represent just 2% of that daily usage.
The companies also recycle a significant amount of their waste water, however, with DigiTimes putting the figure over 85%. Reducing their water usage means they can either improve the efficiency of their processes, recycle even more of their waste water, or experiment with bringing in water from outside the affected reservoirs.
That’s probably why TSMC told Reuters this order was a “pressure test.” Chipmakers might be planning to bring in more water if the initial delivery goes well and the drought continues later into the year. TSMC said right now it’s “making preparations for our future water demand.” Those preparations could change over time.
One thing that won’t change: demand for TSMC and UMC’s chips. Their semiconductors remain in short supply due to the availability of raw materials, the COVID-19 pandemic’s effect on production, and other companies’ desire to use the latest processes in their own products. There just aren’t enough chips to go around.