Drought in Taiwan Pits Chip Makers Against Farmers

HSINCHU, Taiwan — Chuang Cheng-deng’s modest rice farm is a stone’s throw from the nerve middle of Taiwan’s laptop chip trade, whose merchandise energy an enormous share of the world’s iPhones and different devices.

This yr, Mr. Chuang is paying the value for his high-tech neighbors’ financial significance. Gripped by drought and scrambling to avoid wasting water for houses and factories, Taiwan has shut off irrigation throughout tens of 1000’s of acres of farmland.

The authorities are compensating growers for the misplaced revenue. But Mr. Chuang, 55, worries that the thwarted harvest will drive clients to hunt out different suppliers, which might imply years of depressed earnings.

“The government is using money to seal farmers’ mouths shut,” he stated, surveying his parched brown fields.

Officials are calling the drought Taiwan’s worst in greater than half a century. And it’s exposing the large challenges concerned in internet hosting the island’s semiconductor trade, which is an more and more indispensable node in the worldwide provide chains for smartphones, automobiles and different keystones of contemporary life.

Chip makers use a lot of water to scrub their factories and wafers, the skinny slices of silicon that type the idea of the chips. And with worldwide semiconductor provides already strained by surging demand for electronics, the added uncertainty about Taiwan’s water provide is just not prone to ease issues in regards to the tech world’s reliance on the island and on one chip maker in explicit: Taiwan Semiconductor Manufacturing Company.

More than 90 p.c of the world’s manufacturing capability for essentially the most superior chips is in Taiwan and run by TSMC, which makes chips for Apple, Intel and different large names. The firm stated final week that it could make investments $100 billion over the following three years to extend capability, which can doubtless additional strengthen its commanding presence in the market.

TSMC says the drought has not affected its manufacturing up to now. But with Taiwan’s rainfall changing into no extra predictable at the same time as its tech trade grows, the island is having to go to larger and larger lengths to maintain the water flowing.

In latest months, the federal government has flown planes and burned chemicals to seed the clouds above reservoirs. It has constructed a seawater desalination plant in Hsinchu, house to TSMC’s headquarters, and a pipeline connecting the town with the rainier north. It has ordered industries to chop use. In some locations it has reduced water pressure and begun shutting off provides for 2 days every week. Some firms, together with TSMC, have hauled in truckloads of water from different areas.

But essentially the most sweeping measure has been the halt on irrigation, which impacts 183,000 acres of farmland, round a fifth of Taiwan’s irrigated land.

“TSMC and those semiconductor guys, they don’t feel any of this at all,” stated Tian Shou-shi, 63, a rice grower in Hsinchu. “We farmers just want to be able to make an honest living.”

In an interview, the deputy director of Taiwan’s Water Resources Agency, Wang Yi-feng, defended the federal government’s insurance policies, saying the dry spell meant that harvests can be unhealthy even with entry to irrigation. Diverting scarce water to farms as a substitute of factories and houses can be “lose-lose,” he stated.

When requested about farmers’ water troubles, a TSMC spokeswoman, Nina Kao, stated it was “very important for each industry and company” to make use of water effectively and pointed to TSMC’s involvement in a project to extend irrigation effectivity.

That Taiwan, one of many developed world’s rainiest locations, ought to lack for water is a paradox verging on tragedy.

Much of the water utilized by residents is deposited by the summer season typhoons. But the storms additionally ship soil cascading from Taiwan’s mountainous terrain into its reservoirs. This has progressively lowered the quantity of water that reservoirs can maintain.

The rains are additionally extremely variable yr to yr. Not a single storm made landfall throughout final yr’s wet season, the primary time that had occurred since 1964.

Taiwan final shut off irrigation on a big scale to avoid wasting water in 2015, and earlier than that in 2004.

“If in another two or three years, the same conditions reappear, then we can say, ‘Ah, Taiwan has definitely entered an era of major water shortages,’” stated You Jiing-yun, a civil engineering professor at National Taiwan University. “Right now, it’s wait and see.”

In 2019, TSMC’s services in Hsinchu consumed 63,000 tons of water a day, according to the company, or greater than 10 p.c of the provision from two native reservoirs, Baoshan and Baoshan Second Reservoir. TSMC recycled greater than 86 p.c of the water from its manufacturing processes that yr, it stated, and conserved 3.6 million tons greater than it did the yr earlier than by growing recycling and adopting different new measures. But that quantity remains to be small subsequent to the 63 million tons it consumed in 2019 throughout its Taiwan services.

Mr. Chuang’s enterprise accomplice on his farm in Hsinchu, Kuo Yu-ling, doesn’t like demonizing the chip trade.

“If Hsinchu Science Park weren’t developed like it is today, we wouldn’t be in business, either,” stated Ms. Kuo, 32, referring to the town’s essential industrial zone. TSMC engineers are necessary clients for his or her rice, she stated.

But it’s also improper, Ms. Kuo stated, to accuse farmers of guzzling water whereas contributing little economically.

“Can’t we take a fair and accurate accounting of how much water farms use and how much water industry uses and not stigmatize agriculture all the time?” she stated.

The “biggest problem” behind Taiwan’s water woes is that the federal government retains water tariffs too low, stated Wang Hsiao-wen, a professor of hydraulic engineering at National Cheng Kung University. This encourages waste.

Households in Taiwan use round 75 gallons of water per individual every day, government figures show. Most Western Europeans use lower than that, although Americans use extra, in line with World Bank data.

Mr. Wang of the Water Resources Agency stated: “Adjusting water prices has a big effect on society’s more vulnerable groups, so when making adjustments, we are extremely cautious.” Taiwan’s premier said last month that the federal government would look into imposing further charges on 1,800 water-intensive factories.

Lee Hong-yuan, a hydraulic engineering professor who beforehand served as Taiwan’s inside minister, additionally blames a bureaucratic morass that makes it onerous to construct new wastewater recycling crops and to modernize the pipeline community.

“Other small countries are all extremely flexible,” Mr. Lee stated, however “we have a big country’s operating logic.” He believes it’s because Taiwan’s authorities was arrange a long time in the past, after the Chinese civil battle, with the objective of ruling the entire of China. It has since shed that ambition, however not the paperwork.

Taiwan’s southwest is each an agricultural heartland and a rising middle of trade. TSMC’s most superior chip services are in the southern metropolis of Tainan.

The close by Tsengwen Reservoir has shrunk to a marshy stream in some components. Along a scenic strip generally known as Lovers’ Park, the ground of the reservoir has turn out to be an enormous moonscape. The water quantity is round 11.6 p.c of capability, in line with government data.

In farming cities close to Tainan, many growers stated they have been content material to be residing on the federal government’s dime, not less than for now. They clear the weeds from their fallowed fields. They drink tea with associates and go on lengthy bike rides.

But they’re additionally reckoning with their futures. The Taiwanese public seems to have determined that rice farming is much less necessary, each for the island and the world, than semiconductors. The heavens — or bigger financial forces, not less than — appear to be telling the farmers it’s time to discover different work.

“Fertilizer is getting more expensive. Pesticide is getting more expensive,” stated Hsieh Tsai-shan, 74, a rice grower. “Being a farmer is truly the worst.”

Serene farmland surrounds the village of Jingliao, which turned a preferred vacationer spot after showing in a documentary about farmers’ altering lives.

There is just one cow left in city. It spends its days pulling guests, not plowing fields.

“Around here, 70 counts as young,” stated Yang Kuei-chuan, 69, a rice farmer.

Both of Mr. Yang’s sons work for industrial firms.

“If Taiwan didn’t have any industry and relied on agriculture, we all might have starved to death by now,” Mr. Yang stated.

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