Taiwans power issues are becoming a problem for Apple and

Taiwan’s power issues are becoming a problem for Apple and NVIDIA, among others.

The high concentration of advanced lithography production in Taiwan brings with it some infrastructural problems in addition to political risks. Scarcity of water and energy resources has already highlighted the vulnerability of the local semiconductor industry, and Taiwan’s high reliance on imported fossil fuels could pose a challenge for customers of local companies seeking to pursue a green agenda.

    Image source: Unsplash, Henry & Co

Image source: Unsplash, Henry & Co

How reminiscent BloombergU.S. companies Apple and NVIDIA have committed to switching to renewable electricity throughout their supply chain by 2040, but Taiwan’s energy infrastructure may simply not be ready for such a transition plan. Last year, about 80% of Taiwan’s electricity was generated using natural gas, coal and petroleum products imported to the island. Renewable energy sources accounted for just 8% of Taiwan’s balance, but by 2025 the island’s authorities are asking local energy workers to increase that share to 20%.

Considering that the year before last, nuclear energy covered 9.1% of the island’s needs and is planned to be abandoned in the future, this only exacerbates the problem of industrial restructuring. Local energy company Taipower forecast losses of $6.0 billion for the current year due to rising prices for imported energy resources, while authorities called for a curb on the rise in energy tariffs. In particular, last year Taipower was able to increase electricity prices by 11%, the year before it was limited to an increase of 8.4%, and for residential customers the tariffs did not change at all.

Taiwan’s efforts to develop wind farms are facing delays in equipment delivery and rising costs. Additionally, local authorities require utilities to purchase only Taiwan-made equipment, limiting choice and worsening delays. Taiwan’s reliance on imported energy also increases geopolitical risks surrounding the island. Customers of the Taiwanese company TSMC, the largest contract chip manufacturer, have to reckon with these risks, but there are no specific alternatives in the field of advanced lithography, although Intel and Samsung are ready to use these factors to attract new customers.

About the author

Dylan Harris

Dylan Harris is fascinated by tests and reviews of computer hardware.

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