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In drought conditions, Taiwanese authorities deprived farmers of water, saving chip production
09.04.2021 [07:20],
Alexey Razin

As noted earlier, Taiwan’s agriculture consumes more than 70% of the island’s water resources, so in a drought, the interests of this particular industry had to be sacrificed in the first place. Local farmers do not receive water, but live off monetary compensation from the government. This allows TSMC to claim that drought is not hurting semiconductor manufacturing so far.

Image Source: The New York Times

Fresh water supplies in parts of Taiwan are rapidly depleting, and the rainy season will begin only in May. As The New York Times explains, more than 90% of the advanced production of semiconductor components is concentrated on the island; for the entire 2021, the local industry consumed about 63 million tons of water. TSMC reuses about 86% of industrial water, subjecting it to purification, but the need for production in water resources is still great.

In preparation for the drought, TSMC, with government assistance, has already built a desalination plant and a pipeline to the northern part of the island, which is richer in water resources. Attempts were made to induce precipitation using chemicals and aviation, in parts of Taiwan, water was cut off for two days a week, and the pressure in the water supply system was reduced. TSMC and other manufacturers began to order water in tankers from other parts of Taiwan to protect themselves from drought.

The island’s authorities were forced to leave without irrigation about a fifth of all sown areas of Taiwan, which corresponds to 74 thousand. ha. Monetary compensation will be paid to farmers, but the rice crop will inevitably be ruined. In some areas of the island, agriculture and electronics are the most developed sectors of the economy, so the choice was not the easiest. Agricultural market participants are concerned that the island is no longer able to provide itself with the same rice, priority is now given to the production of microcircuits. On the other hand, the growing number of TSMC employees in many areas of Taiwan increased the consumption of rice grown in the vicinity, so it cannot be argued that agriculture only suffered from the industrialization of the area.

Experts also believe that low water tariffs for the population of Taiwan provoke an irresponsible attitude of the inhabitants of the island to the consumption of this resource. If water were more expensive, households would reduce consumption. Experts also argue that Taiwan’s farms in drought conditions would inevitably suffer even without restrictions on water supply, so the authorities chose the right tactic by switching water supplies to the residential and industrial sectors. The infrastructure of the island suffers from another problem — excessive bureaucracy, which prevents the reconstruction of the water supply system in a short time. However, given TSMC’s ambitious plans to expand production in the coming years, local authorities will still have to take appropriate measures to provide the company’s facilities with water resources.

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