Taiwan's Drought: Unveiling a Semiconductor Crisis

https://www.ihadnoclue.com/article/1090544435730644993

Taiwan is facing its worst drought in 56 years, creating a global economic threat through its impact on semiconductor manufacturing. Taiwan Semiconductor Manufacturing Company (TSMC), which produces over 50% of the world's contract chips and 90% advanced processors, requires enormous amounts of ultrapure water for chip fabrication—up to 156,000 tons daily for a large facility. With key reservoirs below 15% capacity, water rationing now affects industrial users. The semiconductor manufacturing process is exceptionally water-intensive because silicon wafers must be repeatedly cleaned to remove microscopic contaminants using ultrapure water that's more refined than medical-grade standards.

This crisis comes amid unprecedented chip demand due to pandemic-driven digitalization, 5G rollouts, and AI applications. Even a slight reduction in TSMC's production capacity would create ripple effects across multiple industries, from consumer electronics to automotive manufacturing. The situation highlights the vulnerability created by the geographic concentration of critical technology manufacturing and has accelerated discussions about supply chain diversification. While TSMC has invested heavily in water recycling technology, achieving an 86% recycling rate, the fundamental water requirements of semiconductor production remain enormous, presenting a critical challenge as climate change increases the frequency of extreme weather events globally.