Drought in Taiwan, the worst in decades, threatens chip production

Taiwan is struggling with the worst drought in decades. Adverse climatic conditions on the island in the East China Sea thus exacerbate nervousness about the lack of chips. Semiconductor production is an extremely water-intensive industry. Drought problems arose after typhoons avoided Taiwan last year, for the first time in 56 years, so water levels in some reservoirs are very low. Taiwan is home to some of the largest and most technically advanced semiconductor chip plants in the world, which are the foundation of a $ 450 billion (€ 373.57 billion) global industry. At the same time, the pandemic of the new coronavirus has generated a huge global demand for microchips, as sales of computer equipment and electronics have increased during blockades and work and distance learning. Thus, Taiwan's microchip factories had difficulty meeting demand before they were hit by the drought, even though they were running at full capacity. The sudden lack of rain exacerbates the bad situation. Taiwan's semiconductor manufacturer, Taiwan Semiconductor Manufacturing Company (TSMC), announced in early April that it plans to invest $ 100 billion over the next three years to meet growing demand, but that will take some time. The shortage of semiconductors has meanwhile spread to car and consumer electronics manufacturers.