Taiwan Says There Is Sufficient Water To Keep Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) Running Until May

Taiwan has given assurances that there is adequate water to keep Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) running until May, when the island will receive monsoon rains to alleviate the current drought.

Water shortage in Taiwan will not impact TSMC’s operations

The government indicated that they will be slightly less rain this year, but there is sufficient water to supply industry and the public until the rains come. The drought being experienced in the island is the worst in 56 years, but this has not impacted companies such as TSMC, according to Economic Affairs Minister Wang Mei-Hua. However, the current drought has been a challenge to water-intensive economic sectors ranging from farms to textile factories and chipmakers.

Interestingly, this growing concern coincides with the global semiconductor shortage that has led automakers such as Volkswagen AG and General Motors Corp (NYSE:GM) to halt output. This has spurred TSMC and other chipmakers to run fabs at almost full capacity as they try to meet demand.

Taiwan’s President Tsai Ing-wen said on her Facebook page on Sunday that the government was doing everything to stabilize supply. It is important to point out that chipmakers usually consume huge quantities of water and power. Japanese, European, and US officials have pleaded with the Taiwanese government to ensure a steady chip supply as automakers delay production and idle plants because of a lack of crucial components.

TSMC reduced the amount of water use at its plants

Interestingly, TSMC cut usage and ordered small quantities of water for some of its facilities in readiness for possible water use restrictions. In the long-term, Taiwan is planning to commit NT$17 billion to the construction of 11 recycling plants by 2026.

The island which spans the Tropic of Cancer in the Pacific Ocean receives copious rainfall amounts, but in 2020 it was uncharacteristically dry. For instance, Hsinchu City, where TSMC is headquartered, received half of the amount of rain it received in 2019. Another major tech manufacturing center, Tainan city, also reported a significant drop in rainfall amounts.