Taiwan’s water shortage is hitting critical levels, and that could hit TSMC and Micron hard

Chip fabrication is a thirsty business, making water supplies a vital component of any semiconductor manufacturer. Water shortages can limit chip production, and Taiwan’s government has issued the nation’s first water supply red alert in six years. 

Taiwan is currently facing a drought, and the nation’s reservoirs are at historic lows, thanks to minimal rainfall thanks to a typhoon free summer. This has created a national shortage of water, and both TSMC and Micron may soon face water rationing. 

With TSMC’s facilities running at peak capacity, asking the company to use less water is not an easy thing to do, especially given TSMC’s role within the global semiconductor market. Limiting TSMC’s water supply would have global consequences, making Taiwan’s drought a worldwide cause of concern.

On April 6th, non-industrial users across Taichung and Miaoli County will only have access to water for five days each week. While TSMC and Micron appear to be exempt from these restrictions, it may only be a matter of time before both companies will be forced to limit their water usage and chip production. 

Production issues at TSMC would impact AMD, Apple, Nvidia, Qualcomm, Mediatek, Broadcom, Xilinx and Intel, all of whom are customers to TSMC to a greater or lesser extent. There is already a chip shortage within many markets, making now the worst possible time for Taiwan to face a drought of this scale. 

Taiwan’s rainy season is due to start in early summer, replenishing the region’s water reservoirs. That said, Taiwan requires a lot of rainfall to refill its reservoirs, as the nation does not want to suffer similar shortages this time next year. 

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