Drought-stricken Taiwan chipmakers order tanker trucks to prepare for ‘worst’

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In this news, we discuss the Drought-stricken Taiwan chipmakers order tanker trucks to prepare for ‘worst’

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TAIPEI (Reuters) – Taiwanese chipmakers truck in water for some of their smelters as island widens restrictions on water supply amid drought that could exacerbate supply crisis in chips for the global automotive industry.

Some automakers have already been forced to cut production, and Taiwan has received requests for help filling the auto chip shortage from countries like the United States and Germany.

Taiwan, the hub of the global technology supply chain for giants such as Apple Inc, will begin on Thursday to further reduce water supplies to factories in central and southern cities where major science parks are located.

Water levels in several reservoirs in the central and southern region of the island are below 20%, after months of low rainfall and a rare summer without typhoons.

“We have predicted the worst,” Taiwanese Minister of Economy Wang Mei-hua told reporters on Tuesday. “We hope that companies can reduce their water consumption by 7 to 11%.”

With limited rainfall forecasts for the coming months, the Taiwan Water Corporation said this week that the island has entered “the most difficult time.”

Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world’s largest contract chip maker, this week began ordering small amounts of water by truck to supply some of its facilities across the island.

“We are preparing our future demand for water,” TSMC told Reuters, describing the move as a “pressure test.” The chip giant said it had seen no impact on production. Vanguard International Semiconductor Corporation and United Microelectronics Corp signed contracts with tanker trucks and said there was no impact on production.

Vanguard said it has launched a borehole to truck the water to its facilities in the northern city of Hsinchu.

Taiwanese tech companies have long complained about a chronic water shortage, which worsened after factories increased production following a Sino-US trade war.

Reporting by Yimou Lee; additional reporting by Jeanny Kao; Editing by Simon Cameron-Moore

Original © Thomson Reuters

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