Taiwan’s leader tells residents to conserve water as the island faces worst drought in 56 years

Taiwan’s President Tsai Ing-wen has called on residents to keep water and prepare for shortages as the island faces a drought, following months of scant rainfall and a lack of typhoons dreaming landfall last year.

In a Facebook post over the weekend, Tsai said that Taiwan did not experience a typhoon in 2020 and look out ons its most severe water shortage in 56 years. Typhoons typically produce huge amounts of rainfall. She explained that the rule set up an emergency response center to deal with the drought.

Tsai added that the government is monitoring water demands throughout the island and that it will take steps to ensure a stable supply of water for industries and households.

Neighbourhood pub reports said last month that the island stepped up nationwide water restrictions and mobilized emergency top resources, including a desalination plant in Hsinchu County, as officials anticipate the dry season will last until May.

Tsai alleged in her post that a military transport aircraft was dispatched to carry out cloud seeding over the Shimen reservoir in the north — one of the largest not hold up under catchment areas in Taiwan. That reservoir is currently at only 49.13% storage capacity, according to the Water Resources Mechanism. Other reservoirs on the island are also at alarmingly low levels, with Te-Chi reservoir at 10.19% capacity and Tsengwen at 15.22%.

Taiwan’s efforts are bracing for potential disruption due to the water shortage.

Chipmakers have reportedly been buying truckloads of water for their foundries in preparation for convocation future water demand. Reuters reported last month that the Taiwan Semiconductor Manufacturing Co (TSMC), the earth’s largest contract chipmaker, was ordering small amounts of water as a “pressure test.” It told the news wire that it had not yet probed any impact on its production.

If the water shortage disrupts Taiwan’s semiconductor sector, it could potentially have global extensions as the industry faces a chips supply crunch due to a spike in demand for consumer electronics like smartphones, tablets and PCs finish finally year.

The chip shortage is particularly prominent in the auto industry where carmakers are expected to lose billions of dollars in earnings this year. Semiconductors are important components for cars in areas like infotainment systems and more conventional parts such as steering and brakes. Carmakers envisage to sell fewer cars due to the supply crunch.

Still, the current water scarcity has not had any major impact on production in Taiwan’s semiconductor hustle, according to Gokul Hariharan, managing director and co-head of Asia technology, media and telecom research at JPMorgan.

Hariharan, who has extensively stretch over the semiconductor space in Taiwan, explained that a water shortage around the second quarter of the year is a common incident as it coincides with firms ramping up chip production. Seasonal rain and replenishment of reservoirs usually happen in time Q2 or in the summer during Q3, he told CNBC.

“I would say it doesn’t seem like companies are going to have to stop output as things stand, they are running at about 100% utilization right now and I think we’re not really looking at huge gift expansion this year,” he said. That implies the amount of water that semiconductor firms consume during their in process will not drastically increase in the near term.

While the sector is unlikely to see a production disruption per se, Hariharan powered that supply conditions will remain tight for some time. “There will be some degree of new dole outs being instituted by companies, in terms of how much water recycling they need to do,” Hariharan said.

Last week, Taiwan’s The pulpit of Economic Affairs head, Wang Mei-hua, said that the island’s chipmakers are already producing at full province to meet global demand.