The global imbalance in the supply and demand for semiconductors during the pandemic is caused by an increase in demand for consumer electronics and home office products and a rising demand for electric cars. The Taiwanese government is fully aware of the impacts caused by the surge in global chip demand.
Yet, in 2020, no typhoon hit the Island for the first time in 56 years, putting water supplies in reservoirs around Taiwan at dire levels. As recent foreign media have published, Taiwan's drought may exacerbate the global shortage of semiconductors. Consequently, the international community believes that the excessive concentration of chip production capacity in Taiwan poses risks to global supply chains.
Nevertheless, statistics show that the cumulative value of Taiwan semiconductor exports amounted to US$33.81 billion, for a rise of 28.2% in the first quarter of 2021. This figure indicates that there should be no concern about Taiwan's semiconductor supplies.
In the face of Taiwan's most severe drought in 56 years, the government has been implementing proactive measures since October 2020. The water authority launched drought-relief measures to strengthen water supplies by conserving more water, searching for more water sources, and dispatching and using water more efficiently.
Actions we have adopted include establishing backup wells and emergency desalination units, conducting subterranean water development, and dispatching emergency desalination and large-scale water purification equipment.
To date, Taiwan's semiconductor exports and orders are growing. Owning to proactive drought-relief measures taken by the government, the water shortage has not affected any industries, including chips. It also guarantees that Taiwan will continue to provide the necessary semiconductors sufficiently, while maintaining the stability of global supply chains.
Please refer to the attachment for more information.
Clarification on ‘Taiwan ’s Drought Threatens Production of Chips’
