TSMC starts to bring in water by tanker amid drought
A spokesperson for TSMC told eeNews Europe: “We have initiated some measures including cutting back water usage and ordering small amounts of water by the truckload for some of our facilities this week as a dry run to get related staff be better prepared for possible future needs.” The spokesperson added: “So far there’s no impact on production and we are closely monitoring the water supply situation.”
The populated western seaboard of Taiwan is facing a drought due to an absence of typhoon rain events in 2020 that would normally fill the country’s reservoirs. Industrial users of water have been told to cut back by 7 to 11 percent on water usage depending on location (see Reports: Samsung, TSMC chip production at risk amid water shortages). Industrial users that do not comply risk having supplies cut off.
The country is now in a dry season that usually lasts until May and weather forecasters have predicted that February and March will be drier than usual.
TSMC is responsible for about 50 percent of the world’s foundry chip supply with most of that produced on the island of Taiwan in clusters of wafer fabs in Hsinchu, Tainan, Taichung and Taoyuan. These are all located in the drought-affected eastern part of the island. United Microelectronics Corp. is another significant foundry based on Taiwan. Taiwan as a whole was responsible for 21.8 percent of global chip supply in 2018, according to IC Insights (see Taiwan retains lead in global IC wafer capacity).
TSMC has few fabs off the island; Shanghai and Nanjing in China and WaferTech LLC in Camas, Washington in the US. The foundry is in the process of building a major fab in Phoenix, Arizona (see US fab part of TSMC capex surge to $28 billion).
Next: Supply chain risk
The drought in Taiwan comes at a time when the IC supply chain is already stretched. Multiple application sectors are now facing chip shortages as production has failed to keep up with booming demand in a bounce back after a year of lockdown due to the Covid-19 pandemic. The automotive sector has been hit particularly hard giving rise to political consideration of the strategic nature of chip supplies (see Germany to boost chipmaking after automotive supply chain failure).
The TSMC spokesperson said the foundry has always maintained contingency plans for each stage of possible water use restriction imposed by the authorities.
TSMC has established various water recycling strategies such as collecting air conditioning condensate water and rainwater to augment its supply and is building water reclamation plants at multiple sites. TSMC’s use of water reclamation is expected to ramp up over the next several years.
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