Taiwan Faces Unprecedented Prolonged Drought... TSMC Responds with 'Order of 100 Water Tanks'

[Asia Economy Reporter Suyeon Woo] Due to an unprecedented drought in Taiwan that has lasted 56 years, the world's leading foundry company, Taiwan's TSMC, has reportedly ordered 100 water tank trucks for water supply. The initial cost is about 200 million yuan, but if the situation prolongs, the cost is expected to increase further.

According to Taiwan's local media Liberty Times Net (LTN) on the 20th, TSMC recently ordered more than 100 water tank trucks to cope with the water shortage crisis. The media estimated the initial cost to be 200 million yuan and projected it could expand up to 500 million yuan in the future.

In semiconductor production, highly purified "ultrapure water" is used in the process. Ultrapure water is a key resource used to wash wafers and semiconductors and in wafer polishing processes. As of 2019, the amount of ultrapure water TSMC used daily reached 156,000 tons.

However, with the unprecedented drought hitting Taiwan, TSMC has been struggling with water supply since February. Normally, Taiwan experiences an average of 3 to 4 typhoons annually, bringing significant rainfall, but last year, almost all typhoons bypassed Taiwan.

As the entire country faced a water shortage crisis, Taiwan President Tsai Ing-wen stepped forward to urge citizens to conserve water. Taiwan's Minister of Economic Affairs Wang Mei-hua stated, "There is enough water for companies to use until the end of May, and this drought does not affect TSMC," but warned that the water consumption reduction rate in major industrial areas could increase from the current 11% to 15%.

However, the industry views the possibility of semiconductor factories such as TSMC and UMC halting operations due to this crisis as low. By purchasing water tank trucks and transporting water from the relatively stable northern regions, operations are expected to continue without disruption for the time being.

Do Hyun-woo, a researcher at NH Investment & Securities, said, "Although the water level of the Hsinchu reservoir adjacent to the TSMC factory is low, the water levels of reservoirs such as Shimen in northern Taiwan are still favorable. TSMC is sending trucks to procure water from the north, and the Taiwan government is supporting semiconductor companies by including them in the priority water supply list."

He added, "Since Taiwan enters the rainy season from April, this is also expected to help resolve the problem. Contrary to media reports, the possibility of TSMC halting factory operations due to water shortage appears low."