Waiting for the Monsoon
Drought is a global issue and an outgrowth of global warming. While its impact is usually delineated with pictures of dried up rivers, dead fish, or long lines to get water, it also has a significant economic effect. The semiconductor industry spends about $1b on water and wastewater systems each year and the average semiconductor plant uses between 720,000 and 2.9m gallons of water each day. That is down from higher number in 2017, with more careful use of such resources, but the average integrated circuit still requires ~2.2 gallons of water to produce, of which 1.5 gallons has to be ultra-pure water.
The world’s largest semiconductor company, Taiwan Semiconductor (TSM) has 9 of its 13 fabs in Taiwan, where the country is facing the worst drought in 56 years. The Taiwan government has assured the population that the island has sufficient water to supply both the public and its key tech industry participants wet until late May when the monsoon rains are expected to alleviate the issue. That said, during the next few months precipitation is expected to fall short of historical average levels, and while thus far there have been no water-related issues, TSM fabs are running at or near full capacity to meet demand, especially in automotive semis, where shortages are beginning to affect output of new vehicles.
TSM itself has ordered small amounts of water for some facilities top prepare for possible restrictions, and of course the entire island is implementing a $600m program to build 11 water recycling plants, but the program will not be finished until 2026, leaving Taiwan vulnerable.
With 70% of Taiwan’s water going to agriculture and 10% for residential and commercial use, Taiwan’s industries only gets about 20%, and last year’s below average rainfall in many areas and a lack of typhoons (not one hit land in 2020 vs. 3 to 4 normally) set the stage for a difficult year currently, but the government says that recent conservation measures have saved over 700m tons of water giving the island a cushion until late May with an additional month for good measure. With TSM and other semi fabs allocating production resources due to strong demand, shutting down any foundry line would be a big blow to the industry and to those dependent on their product. Pray for rain!
The world’s largest semiconductor company, Taiwan Semiconductor (TSM) has 9 of its 13 fabs in Taiwan, where the country is facing the worst drought in 56 years. The Taiwan government has assured the population that the island has sufficient water to supply both the public and its key tech industry participants wet until late May when the monsoon rains are expected to alleviate the issue. That said, during the next few months precipitation is expected to fall short of historical average levels, and while thus far there have been no water-related issues, TSM fabs are running at or near full capacity to meet demand, especially in automotive semis, where shortages are beginning to affect output of new vehicles.
TSM itself has ordered small amounts of water for some facilities top prepare for possible restrictions, and of course the entire island is implementing a $600m program to build 11 water recycling plants, but the program will not be finished until 2026, leaving Taiwan vulnerable.
With 70% of Taiwan’s water going to agriculture and 10% for residential and commercial use, Taiwan’s industries only gets about 20%, and last year’s below average rainfall in many areas and a lack of typhoons (not one hit land in 2020 vs. 3 to 4 normally) set the stage for a difficult year currently, but the government says that recent conservation measures have saved over 700m tons of water giving the island a cushion until late May with an additional month for good measure. With TSM and other semi fabs allocating production resources due to strong demand, shutting down any foundry line would be a big blow to the industry and to those dependent on their product. Pray for rain!
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