Drought-hit Taiwan has water reserves to keep chip makers running till May

The country is facing one of its worst droughts in decades

Taiwan has assured the international tech community that it has enough water reserves to keep its local chip makers running till late May, as the country suffers under its worst drought in years.

According to Bloomberg, Taiwan's Minister of Economic Affairs, Wang Mei-hua, told reporters on Monday that the drought has not yet impacted Taiwan Semiconductor Manufacturing Company (TSMC) - the world's largest contract chipmaker - or others manufacturers in the country. A chip-making facility typically uses two to four million gallons of water each day.

"We have planned for the worst," Wang said.

"We hope companies can reduce water usage by 7 per cent to 11 per cent," she added.

Taiwan has been facing one of the worst droughts in decades, with people waiting for monsoon rains to alleviate the situation. The country usually experiences three or four tropical storms each year, but saw no typhoons in 2020.

The government has implemented a variety of water conservation measures in recent years that have helped to save more than 700 million tons of water. President Tsai Ing-wen has also urged residents to use water conservatively, to ensure there are ample reserves until the monsoon season starts in May.

In the longer term, Taiwan is setting aside NT$17 billion to construct 11 recycling plants in next five years.

Taiwan's agriculture sector accounts for nearly 70 per cent of the country's water consumption, while industry uses about 20 per cent. The remainder goes toward residential and commercial use.

In a statement to Bloomberg, TSMC spokesperson Nina Kao said that the company has trimmed usage and is also ordering small amounts of water by the truckload for some foundries, in preparation for potential water-use restrictions.

Both United Microelectronics Corp and Vanguard International Semiconductor Corporation have also signed contracts with water trucks, although they have said that there has been no impact on chip production so far.

There is currently a global semiconductor shortage, and analysts believe this situation could last until next year.

The curtailed supply has disturbed the global auto industry, which reduced chip orders at the start of the Covid-19 pandemic and is now struggling to meet demand.

In recent weeks, many automakers have urged Taiwan to do all it can to keep the supply of chips steady.

In May last year, AMD CEO Lisa Su informed customers that the company was taking all necessary steps to mitigate the impact of the pandemic on AMD's global operations and to maintain an uninterrupted supply of processors.

Intel hs also said it is working closely with suppliers to identify 'short-term burst shipping capacity' and share collective resources, planes and trucks.