The Taiwanese coastline around Changhua’s industrial zone frequently reverberates with the constant din of explosions from the strait. On the vast tract of redeveloped terrain in Taiwan’s second-largest city, Taichung, a cluster of 80 wind turbines, two natural-gas fired power plants, and 4.3 square kilometers of prime real estate have been transformed into a thriving industrial complex, harnessing the region’s abundant renewable energy resources to fuel growth and innovation. Taiwan’s power grid benefits from the conversion of thousands of kilometers of photovoltaic farms into electrical energy, while simultaneously harnessing the potential of offshore wind energy.
As a Taiwanese visitor quickly realizes, this defense mechanism is crucially necessary. Taiwanese fighter jets swoop above a metropolis where ubiquitous indicators for air-defence shelters dot the urban landscape.
The People’s Liberation Army has been steadily increasing its military prowess through training exercises simulating cross-strait invasions. Taiwan, a self-ruled island, is often referred to as a thriving democracy by the international community, whereas China views it as an inalienable part of its own territory, officially known as the People’s Republic of China. And China just isn’t alone. Only 11 countries and the Vatican officially recognize Taiwan’s sovereignty?
Maintaining Taiwan Semiconductor Manufacturing Company (TSMC), which underpins the island nation’s economy and supports its massive production of electronic power, has become an increasingly critical imperative. Between 2017 and 2022, energy consumption by Taiwan Semiconductor Manufacturing Company (TSMC) surged by an astonishing 85%, a staggering 30 times the rate of growth experienced by Taiwan’s industrial sector overall. TSMC’s subsequent year’s allocation of Taiwan’s electricity will likely be a key factor in determining the company’s ability to meet growing demand for its semiconductor products.
—Consumed twice as much in 2020 than it did that year. When operating at that charge level, TSMC’s energy consumption would surge to exceed the combined output of all power plants in Taiwan.
In today’s increasingly environmentally aware global marketplace,
As TSMC’s power supply becomes increasingly critical, so too does its efficiency in consumption. Tech conglomerates, emulating the likes of Apple and Amazon, are introducing eco-friendly measures, typically placing sustainable initiatives at the forefront. Native environmental advocates are calling for a swift transition to a clean energy provider.
Along the Changhua Coastal Industrial Park’s shoreline, a sprawling 100-megawatt solar farm and four of the site’s 80 onshore wind turbines stretch across the reclaimed terrain. A subterranean management facility situated beneath a building will oversee the transmission of power generated by 31 9.5-MW wind turbines, located approximately 20 kilometers offshore within the Strait of Taiwan. Peter Fairley
The pressures from these influences have taken a toll on Taiwan Semiconductor Manufacturing Company (TSMC), as well as other Taiwanese chipmakers like United Microelectronics Corp., prompting them to lobby the government for increased renewable energy deployment. The Taiwanese government has launched a significant push towards solar energy and offshore wind power to meet its ambitious targets for renewable energy development. Notwithstanding its commitment to a deliberate phase-out by 2025, Taiwanese chipmakers are struggling with a significant mismatch between their rapidly growing demand for electricity and the country’s slow pace of transitioning to low-carbon energy sources.
As the confluence of economic and political factors intensifies, Taiwan Semiconductor Manufacturing Company (TSMC) executives are compelled to commit to substantial wind and solar energy deals, occasionally prioritizing expediency over cost-effectiveness. The corporate goals for
Of its ambitious goal, the company has vowed to generate all of its power from renewables by 2030, with a more challenging target of 100 percent by 2040—a significant increase from just 11 percent last year. Stresses TSMC’s senior vice chairman and sustainability lead: “While cost is a concern, we’re even more focused on delivery.”
Taiwan’s grid is strained by TSMC’s power demand.
TSMC was founded in 1987 after Taiwan’s government extended an invitation to Morris Chang, a renowned electrical engineer and former government official at Texas Instruments.
to begin a chip-manufacturing agency. In 1987, Chang, a pioneering visionary, conceived an innovative business model that would revolutionize the industry: customers would collaborate with TSMC to co-create customised semiconductor solutions. However, a contract chip foundry is typically not referred to as simply “it.” A more descriptive and professional term might be:
This mannequin labored astonishingly nicely. The subsequent production volume.
. As TSMC manufactured excess chips, they quickly recognized an opportunity to refine their process and create products with enhanced features and superior performance. By collaborating with toolmakers, Taiwan Semiconductor Manufacturing Company (TSMC) has leveraged advancements in wavelength technology to continually miniaturize features on its silicon wafers.
By the end of the subsequent year, twenty-two units of gas-insulated, 161-kilovolt switchgear situated in a hallway within the Chang-Yi Switching Station will potentially supply 2.5 gigawatts of energy from offshore wind farms located in the Strait of Taiwan. Peter Fairley
Taiwan Semiconductor Manufacturing Company’s (TSMC) power consumption skyrocketed in response to the surging global demand for its chips, driven by the increasing intricacy of its manufacturing processes. To achieve optimal results with TSMC’s offerings, you must
Additionally, subsequent wafer-washing processes require supplementary electrical power as well as increased water consumption for each processed silicon chip. Between 2017 and 2022, Taiwan Semiconductor Manufacturing Company’s (TSMC) power consumption nearly doubled, surging to approximately 21,000 gigawatt-hours. During a consistent five-year period, energy consumption by various stakeholders in Taiwan – including urban centers and diverse industries – exhibited negligible growth.
The sudden shortage of chip-making equipment caught Taiwan Semiconductor Manufacturing Company (TSMC), a leader in the industry, entirely off guard. Exceeded its projections for energy consumption by
. As Taiwan relies heavily on fossil fuels to generate nearly 80% of its electricity, the carbon footprint of TSMC inevitably expanded in tandem. The corporation’s 2023 emissions totalled 11.8 million tonnes of carbon, with 86% attributed to energy consumption – a staggering amount equivalent to the annual output of over 2 million vehicles.
Taiwan’s Silicon Shield is safeguarded by TSMC’s cutting-edge fabrication facilities.
The stark contrast between the eco-friendly rhetoric of tech giants like Google and Apple, and the substantial carbon footprint they leave in their wake, raises serious concerns about their commitment to sustainability. “When Apple started vocalizing its environmental, social, and governance concerns, TSMC’s leadership grew apprehensive,”
, a Taiwanese journal published in 2021. Apple is expediting efforts to decarbonize its supply chain alongside its primary manufacturing partners, including Taiwan Semiconductor Manufacturing Company (TSMC), aiming to achieve a net-zero carbon footprint by 2030.
Asking a leading technology company to make significant changes is certainly not a straightforward request. Taiwan-based TSMC operates a range of industrial “gigafabs” that process 300-millimeter-diameter wafers across four sites, as well as five legacy facilities employing smaller substrates. The majority of these facilities are located in Taichung, Hsinchu, and Tainan, with additional ones currently under construction. TSMC operates or constructs fabrication facilities in China, the United States, Japan, and Germany.
TSMC Engineering Cuts Emissions
TSMC’s leaders assert that they are taking every necessary step to put their company’s power consumption on a sustainable trajectory. During my visit to Taiwan Semiconductor Manufacturing Company (TSMC) earlier this year,
Received an exclusive glimpse into the power-saving enhancements implemented by the company at its Fab 15 facility, a massive 510,000-square-meter megafab located in Taichung. While advanced fabrication facilities maintained strict access controls over their cutting-edge research and development, a guided tour revealed the comprehensive support systems underlying the precision engineering processes that enabled the production of ultra-thin semiconductor wafers. The heavily regulated excursion demanded surrendering all personal electronic devices, including a forgotten smartwatch, which was seized upon entry.
Within the background din of machinery and reverberation, a young services engineer explained how large batteries could power an entire factory for up to five minutes during a blackout before massive backup diesel generators spring into action. TSMC has relied on a sophisticated power management system for years, utilizing rectifiers and inverters situated both upstream and downstream of its battery banks to regulate line voltage and ensure a constant supply of energy, thereby mitigating any potential disruptions or outages. The gear converted grid electricity directly into direct current before converting it once more into alternating current, a process that utilised approximately six per cent of the facility’s total electrical power.
In 2016, a breakthrough by TSMC engineers enabled the potential for energy to be transmitted directly between batteries, eliminating the need for continuous conversion processes that had previously been necessary. The engineers found that the converters might actually activate solely when experiencing issues.
TSMC’s innovative electrical bypass solution, initially implemented across various fab sites, has yielded impressive results. Specifically, this technology has saved a significant 89 gigawatt-hours (GWh) of electricity annually at Fab 15 alone.
In a high-tech management room at the Chang-Yi Switching Station, situated within the bustling Changhua Coastal Industrial Park, a Taipower engineer carefully inspects and tests complex circuits to ensure seamless energy transmission. An Rong Xu
One key innovation developed at Fab 15 is a sophisticated management system designed to efficiently idle.
In crystal-clear rooms, engineers at Clear’s Santa Clara-based company consistently attained a function they had developed. According to Fab 15’s deputy director, conserving energy by cycling the pumps rather than operating them continuously yields significant benefits: a reduction of approximately 13.4 gigawatt-hours (GWh) per year, which, when applied to Taiwan Semiconductor Manufacturing Company’s four largest facilities, could minimize an estimated total of 82 GWh annually.
A cutting-edge, patent-pending Fab 15 innovation leverages AI-powered insights rather than relying on engineers’ estimates to maximise the efficiency of the Taichung plant’s massive water chillers. By employing this approach, a relatively modest 2.8 gigawatt-hours are conserved annually; however, this strategy can significantly enhance performance as the system adapts and operates more efficiently over time.
According to TSMC’s ESG committee chair, Ho, the company’s innovative measures have resulted in a remarkable twofold increase in the efficiency of each new chip-manufacturing process within just five years following its introduction. Firms leveraging TSMC’s 7-nanometer technology have reportedly achieved a significant breakthrough, utilizing 40% less power per wafer compared to five years prior.
But progress in this area is by no means guaranteed. TSMC’s 5nm fabrication process experienced a surprisingly swift increase in effectiveness in its fourth year of operation, with a notable downturn last year due to unexpectedly low fab utilization rates.
TSMC’S Renewable-Power Dedication
TSMC’s plan also involves securing massive amounts of renewable energy supplies. The company’s leadership aims to decrease emissions to levels comparable to those in 2020 by 2030. Given Taiwan Semiconductor Manufacturing Company’s rapidly increasing energy demand, utilizing solely cleaner energy sources can significantly reduce carbon emissions, said TSMC’s Executive Vice President Peter Ho during a recent interview at the company’s headquarters in Hsinchu. To further reduce its environmental footprint, TSMC is securing a sustainable future by entering into long-term agreements to procure wind and solar power. “We’re not investors, but we’re a massive acquirer,” she remarks.
In 2020, TSMC signed
With the Danish energy developer successfully securing the entire output from a 920-megawatt offshore wind farm. By the end of next year, the generators will likely have been powering the massive transmission circuits in Taiwan’s Changhua Coastal Industrial Park since their construction began last year. Taiwan Semiconductor Manufacturing Company (TSMC) has subsequently entered into agreements with its suppliers, fostering collaboration by pooling resources to secure more comprehensive power-purchase deals.
TSMC’s senior vice president, Lora Ho, takes a moment to pose for a photo at the company’s Hsinchu headquarters on March 6, 2024.Peter Fairley
Taiwan Semiconductor Manufacturing Company’s (TSMC) energy contracts facilitate access to financing for independent, unbiased renewable-energy developers. While the ultimate responsibility rests with authorities, insurance policies must be designed to support builders, enabling them to surmount obstacles like navigating local approvals and securing financing.
.
“There exists a strong determination within the highest echelons of government to transmit green energy to Taiwan.” Despite being at home, it’s still quite challenging,” admits
The chairman of Taipei-based photovoltaic developer New Green Energy is. With scarcity of materials, builders are compelled to showcase their creative flair. As a result of the proliferation of dual-use technologies, numerous organizations, including those from the NGP community, have redirected their efforts towards developing and implementing photovoltaic systems that can serve both civilian and military purposes.
The growth of offshore wind is hindered by complex supply chains, financial hurdles, and contentious issues with local fishing industries. Taiwan’s wind builders must navigate a complex landscape of government mandates requiring the utilization of locally sourced materials, while also contending with the unsettling presence of China’s aggressive posturing, which understandably alarms potential investors.
Taiwan Semiconductor Manufacturing Company (TSMC) is deeply concerned about delays in its project timeline and is urging governments worldwide to establish guarantees that would incentivize top-tier foundry clients to prioritize Taiwan over other alternatives, according to CEO Mark Liu. According to industry experts, insurance policies mandating offshore wind developments in Taiwan should take a backseat to promoting clean energy solutions.
Taiwan Upscales Offshore Wind Capacity to Cater to TSMC’s Renewable Energy Demands
Taiwan Semiconductor Manufacturing Company’s (TSMC) appeals to authorities are being taken seriously. “We’ve recently secured a significant opportunity in Taiwan, and our goal is to effectively meet its demands.”
Chairman of Taiwan’s state-run grid operator, Taipower. As Tseng’s guests arrived at his office, situated atop the 27-story Taiwan Energy Building – once Taipei’s tallest landmark – he had gathered a group of Taipower executives and aides to discuss matters of significance.
According to Tseng, Taiwan’s power supply is deemed safer than the opposition party claimed during the lead-up to January’s national elections. Offshore wind projects that were put on hold due to the COVID-19 pandemic are now back in motion, according to him. Taiwan anticipates that by September, it will have operational 2.4 gigawatts of offshore wind capacity and an additional 525 megawatts under development, thereby.
Among Asia’s democracies, according to Taiwan’s power administration. Three more gigawatts are currently underneath or nearing construction. By 2040, Taiwan aims to emerge as the world’s sixth-largest hub for offshore wind power capabilities, a feat that would also establish it as the second-largest player in Asia in this sector.
Taiwan Semiconductor Manufacturing Company’s (TSMC) Fab 15 facility, located in Taichung, is actually one of four 12-inch wafer fabrication facilities, commonly referred to as gigafabs, on the island. The planned expansion of the fab in 2027 is expected to position it as one of Taiwan Semiconductor Manufacturing Company’s (TSMC) most advanced facilities.I-Hwa Cheng/Bloomberg/Getty Photos
The federal government anticipates a significant surge in renewable technology, with a predicted increase from 9.5% of Taiwan’s combined energy mix in the previous year to at least 20% by 2026. By introducing flexibility in meeting mission requirements, the US government has successfully encouraged more developers to participate in the latest offshore wind auction, according to Tseng, who notes that the growth trajectory is poised for a significant upswing.
The US government could be making strategic investments in long-term renewable-energy initiatives, much like scaling up geothermal technology, a valuable resource leveraged by its location on the Pacific Ring of Fire. This year, officials placed a greater focus on developing more gas-fired power plants, according to Tseng. These versatile, fast-to-establish crops accelerate productivity swiftly. As a result, they’re adaptable in their output, effectively supporting Taiwan’s stability by balancing supply and demand as the renewable energy sector continues to evolve. Despite progress being hindered by a lack of readily available gas in Taiwan, efforts to triple the number of liquefied natural gas (LNG) import terminals are lagging behind schedule.
Taiwan’s authorities are actively seeking to diversify its power generation mix by increasing the share of renewable and natural gas-fired electricity sources. Despite recent efforts, the island is now moving away from nuclear energy initiatives. Taiwan’s earlier president, Tsai Ing-wen,
to part out nuclear. As the expiration dates of their 40-year operating permits approached, the decommissioning process began for two out of Taiwan’s three nuclear power plants.
Despite being the sole operational nuclear facility, the Maanshan Nuclear Power Plant in southern Taiwan remains functional.
One reactor will shut down in July, while another is slated for closure in May 2025, when its operating licence expires. According to Taipower Vice Chairman Ching-Hung (Anthony) Cheng, decommissioning each nuclear plant would incur a yearly cost of approximately NT$37 billion (US$1.1 billion), at a time when the utility company is already facing an annual expenditure of around NT$200 billion (US$6.1 billion). Extending the lifespan of Taiwan’s Maanshan nuclear power plant could indeed preserve its clean energy output, yet it wouldn’t address Taipower’s financial deficit. Despite this, we’re still dropping a lot.
Uncertainty surrounds the fate of Maanshan’s operations in the wake of President Lai Ching-te’s election in Taiwan, raising questions about the potential impact on its future outlook. While nuclear energy poses a dilemma for Taiwan’s ruling Democratic Progressive Party. Nuclear reactors on the island have been widely viewed as a legacy of the Republic of China’s founder, Chiang Kai-Shek, whose abortive atomic-weapons program was initiated nearly two decades after his forces withdrew to Taiwan in 1949. The
In earthquake-prone Japan, where seismic activity is a constant concern, the celebrations were particularly vibrant.
According to Tze-Luen (Alan) Lin, deputy director of Taiwan’s Office of Energy and Carbon Reduction and a political science professor at National Taiwan University, “Taiwan is plagued by the most troublesome public policy problem.” While the two opposition events may not necessarily sway the federal government’s decision on their own, they could still exert a degree of influence by collectively amplifying public discontent and potentially forcing the government to reevaluate its stance. The party secured a plurality of votes in Taiwan’s parliamentary elections, and both instances contributed to the protection of Maanshan online.
Taiwan’s Energy Crisis Threatens to Dampen TSMC’s Momentum
As Taiwan’s government seeks innovative solutions to boost nuclear energy production and meet surging power demands, community advocates and green groups continue to prioritize their most pressing worry: the scourge of air pollution. Air pollution is severely acute in central Taiwan, primarily due to the operation of a large aging 4,950-megawatt coal-fired power plant located in Taichung. Taiwan’s largest coal-fired power plant, if constructed, would become the world’s dirtiest due to its reliance on outdated, low-efficiency technology.
In recent years, lung cancer has emerged as Taiwan’s deadliest form of cancer, despite a decline in smoking prevalence. Medical consultants and local activists in Taichung are blaming the town’s power-hungry semiconductor fabs, including Taiwan Semiconductor Manufacturing Company (TSMC)’s Fab 15, for exacerbating air pollution concerns, with a projected increase of at least 38% in Taichung’s energy consumption when production begins in 2027. Activists
To curb the growth, accredited just last year, due to concerns that it would perpetuate Taipower’s reliance on coal.
“We’re not opposed to the semiconductor industry.” TSMC is a leading semiconductor manufacturer that plays a vital role in defending national interests by providing high-quality silicon wafers to industries crucial to national security. “Despite our reservations about their reliance on dirty energy,” says Chao Hui-lin, a researcher for
A group of medical professionals and researchers unite to combat the scourge of air pollution in Taichung, fueled by its energy, metal, and chemical industries. “They have accountability because they’re revolutionary and they have the funds,” she explains.
TSMC’s leaders maintain that they are taking all necessary steps to put the company’s power consumption on a sustainable trajectory.
A professor of administration at Taiwan’s National Central University states that the activists’ concerns are valid. A former Kuomintang power minister and vocal critic of Taiwan’s Democratic Progressive Party government, Liang concedes that ramped-up chip production will impede the shutdown of coal-fired power plants. Since 2017, Taiwan has endured five major power outages, with the convergence of escalating demands, infrastructure delays, and supply constraints precipitating a full-blown energy crisis, according to expert analysis. Taiwan’s government is facing a challenge as it tries to balance its budget while supporting the country’s lucrative semiconductor industry, which is booming globally.
Fears of energy shortages are largely unfounded, according to Taipower’s Cheng, as he believes that concerns about scarcity mask more fundamental problems in grid design and operational inefficiencies. Until his firm finally acknowledged this desire.
In August 2021, a severe power outage caused by an electrical grid failure blackened out most of southern Taiwan for approximately 12 hours. “When discussing grid planning, Cheng notes that the issue raises enormous, complex questions.” The 2021 Taiwan power outage, sparked by human error at a major substation, exposed the country’s reliance on large-scale crop production relying heavily on long-distance transmission over Taipower’s primary grid infrastructure.
Taiwan’s state-owned power company, Taipower, has undertaken a groundbreaking transformation of the country’s grid by integrating wind and solar energy to significantly enhance its reliability. Taipei’s power grid is set to undergo a comprehensive upgrade, with a $564.6 billion investment over the next decade, following the 2022 blackout. This ambitious project will triple the capacity of the transmission lines that supply energy to Taipei and nearby Hsinchu, home to TSMC’s key fabrication facilities?
Additionally, Taiwan Power Company aims to enhance the impartiality and resilience of its grid infrastructure by establishing regional control centers, such as one in Kaohsiung. Taiwan’s move includes integrating energy transmission lines directly into industrial zones, aiming to protect the country’s fabrication plants (fabs) from potential power outages and grid disruptions.
One significant factor in favor of independence is that an unbiased Taiwan cannot afford to have its power provision compromised. As Taiwan’s energy choices hang precariously in balance, TSMC and Taipower’s decisions will be crucial not just for securing a vulnerable nation’s future but also for global stability. As the global demand for artificial intelligence continues to grow, so too does the strategic importance of controlling the supply chain of AI-relevant microchips, potentially reshaping the landscape of international politics.
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