Taiwan has established itself as the primary chip manufacturer globally, housing state-of-the-art fabrication facilities. The island is responsible for over 60 percent of the world’s semiconductors and nearly 90 percent of its most advanced chips. However, the industry faces a significant challenge: water.
Chip production is highly water-intensive. For instance, Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, consumes up to 99,000 tonnes of water daily at its Southern Taiwan Science Park facilities alone, not including other facilities across Taiwan.
Semiconductor foundries rely on water primarily for cooling systems and cleaning residue from silicon wafers. The cleaning process demands “ultrapure” water, which must be extremely clean to prevent damage to chips.
The reliance on water exposes a vulnerability in the global semiconductor industry, particularly considering climate change trends. By 2030 and 2040, a significant percentage of chip plants in operation, under construction, and announced will be in high to extremely high water stress risk areas. Taiwan, in particular, faces potential challenges due to seasonal droughts and existing water supply issues.
While Taiwan receives sufficient rainfall, challenges arise from irregular distribution, terrain, and high demand. The island has limited freshwater availability per capita compared to other countries.
In early 2021, Taiwan experienced a severe drought, impacting chip manufacturers just as global demand surged. To combat water scarcity, manufacturers resorted to temporary solutions like purchasing water and drilling wells.
The water shortage affected chip manufacturing hubs across Taiwan, leading to mandated water consumption reductions. The long-term impact of water stress on the industry is significant, with projections showing a decline in output and increased water consumption in the future.
To address the looming crisis, Taiwan’s chip manufacturers and government are implementing measures like water recycling, desalination plants, and stricter water usage policies. However, experts emphasize the need for a fundamental shift in water management strategies to sustain the industry.
While current reservoir levels are adequate due to recent typhoon activity, Taiwan must remain vigilant and implement comprehensive measures to ensure water supply resilience. The semiconductor industry’s prosperity is crucial for Taiwan’s strategic position on the global stage and must be safeguarded through effective water management.