Cape Argus

Tech giants feel brunt of the drought


TAIWAN chipmakers are buying water by the truckload for some of their foundries as the island widens restrictio­ns on water supply amid a drought that could exacerbate a microchip supply crunch for the global auto industry.

Some car makers have already been forced to trim production, and Taiwan had received requests for help to bridge the shortage of auto chips from countries including the US and Germany.

Taiwan, a key hub in the global technology supply chain for giants such as Apple Inc, yesterday began to further reduce water supply for factories in central and southern cities where major science parks are located.

Water levels in several reservoirs in the island's central and southern region stand at below 20%, following months of scant rainfall and a rare typhoon-free summer.

“We have planned for the worst,” Taiwan Economy Minister Wang Meihua told reporters on Tuesday. “We hope companies can reduce water usage by 7% to 11%.”

With limited rainfall forecast for the months ahead, Taiwan Water Corporatio­n this week said the island had entered the “toughest moment”.

Taiwan Semiconduc­tor Manufactur­ing Co Ltd (TSMC), the world's largest contract chipmaker, this week started ordering small amounts of water by the truckload to supply some of its facilities across the island. “We are making preparatio­ns for our future water demand,” TSMC said, describing the move as a “pressure test”.

Both Vanguard Internatio­nal Semiconduc­tor Corporatio­n and United Microelect­ronics Corp signed contracts with water trucks and said there was no impact on production.

Taiwanese technology companies have long complained about a chronic water shortage, which became more acute after factories expanded production following a Sino-US trade war.

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