30 power outages in 2 months! How much does Taiwan’s weak power supply affect semiconductor manufacturers?
The most common causes of these accidents are failures of feeders (cable lines), power transformers and high-voltage cables, which occur when the area is facing high temperatures.
For now, fortunately, these power outages have not affected many chip manufacturers in Hsinchu Science Park, Taiwan, China, including TSMC and Foxconn.However, some experts say it should serve as a warning for the development of Taiwan’s vital technology industry.
1. Sufficient power supply, but obvious warning signs
On August 25, thunderstorms and severe lightning strikes caused power transmission lines to trip, causing a sudden power outage to about 17,000 households in New Taipei City, Taiwan’s most populous city. On the same day, Kaohsiung, Taiwan’s second-largest city, also experienced a massive power outage, with termites biting through electrical cables, affecting about 3,859 households.
Data released by the Taiwan Power Company showed that in the next two days, 7,525 and 8,416 households in Kaohsiung lost power, one of which was caused by termites biting through power lines, and another when squirrels touched the power lines.
▲ Grocery stores affected by power outages
“For Taiwan, the most pressing issue is not whether there is enough power, but the stability of power supply,” said Zhou Guitian, a professor at the Center for Risk Society and Policy Research at National Taiwan University. “It is crucial to improve the overall infrastructure in the future.” The reason is that at present, Taiwan’s backup power capacity is still in sufficient supply.
Steven Chen, head of renewable energy in Taiwan at KPMG, an international accounting firm, said in an interview with Nikkei Asia: “As Taiwan’s energy mix is shifting from traditional electricity supply to a more diverse and Diversified energy sources will require a more resilient and smartly managed grid.”
He explained that the variable nature of renewables means the grid will have to deal with larger and more frequent voltage changes.
So, if Taiwan fails to upgrade its basic power infrastructure, this outage will happen again and again.
2. There were nearly 5,000 power outages in the first half of this year, and electricity demand is expected to rise by 2.3% annually
On March 3 this year, after a large-scale power outage in Taiwan, China affected more than 5 million households, the Taiwan provincial government drafted a plan of NT$100 billion (equivalent to about 22.685 billion yuan) to improve the power grid in the next 10 years. Resilience and stability of power supply.
Recently, the investment amount of this plan has been increased to NT$150 billion (equivalent to about 34.027 billion RMB).
Taipower spokesman Wu Qingzhong revealed in an interview with Nikkei Asia that the number of power outages in Taiwan has actually decreased over the years, from 21,000 in 2012 to 9,000 last year. There were 4,847 outages in the first half of this year, a year-on-year decrease of 11%.
But even with fewer outages, thousands of households are still affected, so the Taiwan Power Company is still working to improve the stability of the power supply.
“At the end of April this year, we submitted a budget to Taiwan’s economic affairs department to strengthen the resilience of the power grid. One of the goals is to reduce the scope and length of future power outages to further prevent the impact of power outages from spreading.” Wu Qingzhong said.
Previously, Tsai Ing-wen had proposed that Taiwan would be carbon neutral by 2050 and planned to phase out nuclear power by 2025.
However, as a technological hub, Taiwan’s demand for electricity should not be underestimated. Electricity demand in the region is expected to grow by at least 2.3% annually through 2028, mainly driven by the development of the semiconductor industry and foreign investment.
3. The power grid is highly concentrated and aging, and the supply of renewable energy is insufficient
In addition, Taiwan’s power grid is highly concentrated and aging, and its more than 10,000 electrical cables, as well as power transformers and other equipment, require frequent maintenance and replacement.
Coupled with the resistance of ordinary people to the construction of large-scale power plants, natural gas terminal equipment or high-voltage transformers, Taipower can only add equipment in areas with existing generators to cope with the increasing demand for electricity, which further makes the power grid more efficient. concentrated.
Not only power resources, but Taiwan’s dependence on imports of many resources also highlights the fragility of its economy. The region relies on imports for 97.8% of its energy supply, including crude oil, natural gas and coal.
At the same time, according to public data in the first half of the year, 42.5% of Taiwan’s main sources of electricity are coal and 38.1% are natural gas. In addition, nuclear power accounts for 8.5% and renewable energy accounts for only 8.1%.
In response to this data, Taiwan plans to increase the share of renewable energy to 20% and natural gas to 50% by 2025.
▲ Distribution of main power sources in Taiwan
Among them, the construction of offshore wind farms is an important way for Taiwan to promote energy self-sufficiency, but this move is affected by geopolitical factors, which makes this plan face obstacles in attracting investment.
“Geopolitical uncertainty may affect the willingness of global wind farm developers and operators to continue building large-scale wind farms locally, as these investments involve hundreds of billions of Taiwan dollars,” said Steven Chen.
Therefore, Zhou Guitian said, “We do need to draft some emergency and backup power supply plans to deal with any potential disruptions.” In the future, geopolitical risk is also a key factor when considering the construction of power infrastructure.
Conclusion: frequent power outages may cause early warning of the impact of semiconductor production
Since the beginning of this year, Taiwanese semiconductor manufacturers have suffered from water shortages, earthquakes, power outages, equipment failures and other accidents. Even though semiconductor manufacturers have early warning and prevention mechanisms for various natural and man-made disasters, such natural and man-made disasters occur frequently and will still be affected in the future. production has a greater impact. Judging from the public data, the frequency of power outages in Taiwan has been greatly reduced, but the impact has not diminished. In the future, if power outages and other events continue to occur frequently, the potential negative impact will be immeasurable.
In addition, due to the instability of power supply and geopolitical risks, investment attraction in the region will also be affected to a certain extent.
Compilation | Cheng Qian
Edit | Panken