Yesterday the Taiwan government issued its first water supply red alert in six years, in order to counteract the seriously dwindling reserves of the countries central reservoirs. Many areas of the country have been forced to ration water extensively, including areas that house large wafer manufacturing operations for both Micron Technology Inc., and Taiwan Semiconductor Manufacturing Co. (TSMC).
With the country's water supply levels running dangerously low, non-industrial users across Taichung and Miaoli County will only have access to water for five days each week, from April 6. Both TSMC and Micron operate out of the affected areas and depend on a stable water supply for several steps in the wafer manufacturing process. TSMC's Hsinchu headquarters have not been subject to further restrictions so far though.
What the restrictions could mean for the semiconductor industry is as yet unclear, though it does have the potential to exacerbate a host of already critical global component shortages. Interruptions at this juncture would stunt production efforts, affecting companies like Intel, AMD, Nvidia, Apple, Kingston, and many more.
TSMC has been running drills in order to prepare for the worst-case scenario and is planning to increase its reliance on tankers for water. Last month we saw Tainan go into orange alert, prompting TSMC to run emergency maneuvers (opens in new tab).
There was no word as to whether these operations were successful but, according to Bloomberg (opens in new tab), TSMC claims that "the new restrictions would not affect operations." This reassurance comes from an emailed statement, and the article notes that "a Micron representative in Taiwan declined to comment, saying the company is now in a quiet period."
There is hope on the horizon at least, as the rainy season should be on its way and the water levels should start to see an improvement come early summer. Fingers crossed the semiconductor industry can stay afloat in the time being.