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Drought in Taiwan pits chips makers against farmers

HSINCHU, Taiwan – Chuang Cheng-deng’s modest rice farm throws a stone from the nerve center of Taiwan’s computer chip industry, the product of which provides the vast majority of the world’s iPhones and other devices.

This year, Chuang is paying the price for the economic prosperity of its high-tech neighbors. Taiwan has stopped irrigating tens of thousands of acres of agricultural land in the wake of drought and alarms to save water for homes and factories.

Authorities are compensating growers for lost income. But 55-year-old Chuang is concerned that the disrupted crop will force customers to look for other suppliers, which could mean years of depressed earnings.

“The government is using money to shut farmers’ mouths,” he said, exploring his parched brown fields.

Officials call Taiwan the worst drought in more than half a century. And it reveals the enormous challenges involved in hosting the island’s semiconductor industry, which is becoming an increasingly indispensable link in smartphones, cars and other key stones in modern life in the global supply chain.

Chipmakers use a lot of water to clean their mills and waffles, the thin layers of silicon that form the basis of chips. And with semiconductor reserves around the world already strained by high demand for electronics, the growing uncertainty over Taiwan’s water supply is unlikely to ease the island’s dependence on the tech world, particularly one manufacturer.

More than 90% of the world’s leading chip is located in Taiwan, controlled by TSMC, which produces chips for Apple, Intel and other big names. The company said last week that it would invest $ 100 billion over the next three years to increase capacity, which is likely to further strengthen its command presence in the market.

TSMC says the drought has not affected production so far. But as Taiwan’s rains become unpredictable, even as its technology industry grows, the island has to travel longer and longer distances to keep water flowing.

In recent months, the government has flown planes, burned chemicals to plant clouds above reservoirs. It has built a seawater desalination plant in Hsinchu, where TSMC is headquartered, connecting the city to the rainier north of the city. It instructed the industries to stop using it. In some places it lowered the water pressure and started to cut off the supply two days a week. Some companies, including TSMC, have moved freight water from other areas.

But the biggest measure was to stop irrigation, which affects 183,000 acres of agricultural land, one-fifth of Taiwan’s irrigated land.

“TSMC and those semiconductor guys, they don’t feel it at all,” said Tian Shaw-shin, 63, a rice grower in Hsinchu. “We farmers just want to be honest.

In an interview, Wang Yi-feng, deputy director of the Taiwan Resources Agency, defended the government’s policy, saying that dry weather meant the crop would be poor even if irrigation was possible. “You would ‘lose’ diverting scarce water to farms instead of factory houses,” he said.

Asked about farmers’ water problems, TSMC spokeswoman Nina Kao said it was “very important for every industry և company” to use water efficiently, noting TSMC’s involvement in the project to increase irrigation efficiency.

It is a paradox that Taiwan, one of the rainiest places in the developed world, should have a shortage of water.

Most of the water used by the residents is settled by summer typhoons. But the storms cascade down the mountains of Taiwan into its reservoirs. This has gradually reduced the amount of water that reservoirs can hold.

Rainfall is also highly variable from year to year. No typhoon landed during last year’s rainy season, the first since 1964.

The last time Taiwan stopped irrigating on a large scale to save water was in 2015 and before that in 2004.

“If the same conditions reappear in two or three years, we can say, ‘Ah, Taiwan has definitely entered an era of great scarcity of water,'” said Ying Zingyun, a professor of civil engineering at Taiwan National University. “Now wait and see.”

In 2019, according to the company, TSMC facilities in Hsinchu consumed 63,000 tons of water per day, or more than 10% of the supply from two local reservoirs, Baoshan և Baoshan Second Reservoir. According to him, TSMC recycled more than 86% of its production water that year, saved 3.6 million tons more than last year, increasing recycling and adopting other new measures. But that amount is still small compared to the 63 million tons consumed in 2019 at its facilities in Taiwan.

Chuang’s business partner at his farm in Chuang Kuo Yu-ling does not like the de-ionization of the chip industry.

“If Hsinchu Science Park were not as developed as it is today, we would not be in business either,” said Cuo, 32, referring to the city’s main industrial area.

He said TSMC engineers are potential customers for their rice. Kuo said it was wrong to accuse farmers of disturbing the water while at the same time investing little economically.

“Can’t we justly and accurately calculate how much water is being used, how much is being used by industry, not be constantly stigmatized in agriculture?” he said.

“The biggest problem with Taiwan’s water issues is that the government is keeping water tariffs too low,” said Wang Xiao-wen, a professor of hydraulic engineering at National Chen Kung University.

Government data show that Taiwanese households consume about 75 gallons of water per person per day. Most Western Europeans use less, although Americans use more, according to the World Bank.

Wang, of the Angry Resources Agency, said: “Price adjustments have a huge impact on the most vulnerable groups in society, so we are very careful when making adjustments.” Taiwan’s prime minister said last month that the government would try to raise additional fees for 1,800 water plants.

Lee Hong-yuan, a professor of hydraulic engineering who previously served as Taiwan’s interior minister, also blames bureaucratic kindness that makes it difficult to build new wastewater treatment plants and modernize the pipeline network.

“The other small countries are all very flexible,” Lee said, “but we have the operational logic of a big country.”

He believes that this is due to the fact that the government of Taiwan was formed decades ago, after the Chinese Civil War, with the aim of governing all of China. After that, it dispelled that ambition, but not the bureaucracy.

Southwest Taiwan is an “agricultural center”, a growing center of industry. The most advanced TSMC chip facilities are located in the southern city of Tainan.

The nearby Eng Engen Reservoir has narrowed in some parts to a swamp. Along the picturesque area called the Lovers’ Garden, the bottom of the reservoir has become the scene of a huge moon. The volume of government, according to government data, is about 11.6% of power.

In rural areas near Taynan, many producers said they were happy, at least for now, with the government. They clear weeds from their poor fields. They drink tea with friends and ride long bikes.

But they also count on their future. Taiwanese society seems to have decided that rice cultivation is less important for both the island and the world than semiconductors. Heaven, or at least the greater economic forces, seem to be telling farmers that it is time to find another job.

“Fertilizers are getting more expensive. “Pesticides are getting more expensive,” said rice producer Hsie Ts-ayshan, 74. “Being a farmer is really the worst.” Forest farmland surrounds Ingliao village, which has become a popular tourist destination since starring in a documentary about farmers’ changing lives.

There is only one cow left in the city. It spends its days attracting visitors, not plowing fields.

“About 70 people here are considered young,” said 69-year-old Ian Kuei-chuan, a rice farmer.

Both of Jan’s sons work in industrial companies.

“If Taiwan did not have an industry to rely on agriculture, we might all be hungry by now,” Ian said.


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