trouble in taiwan: water outages hit tsmc operations

2025-07-03 tsmc

taichung, Thursday, 3 July 2025.
multiple districts in taichung and kaohsiung, taiwan, are grappling with significant water outages and reduced pressure. these disruptions, lasting up to 28 hours, are not just an inconvenience. the emergency repairs and high water turbidity are raising serious concerns about tsmc’s manufacturing. the chip giant relies on a stable, high-quality water supply. any hiccups in production could send ripples through tsmc’s output, revenue, and ultimately, investor confidence, potentially impacting its stock performance.

impact on manufacturing capacity

The water outages in Taichung and Kaohsiung are not isolated incidents [1][2]. Taichung will experience 10-hour daily water stoppages for eight consecutive days due to pipeline replacement [1]. Certain areas will also face reduced water pressure [1]. Kaohsiung is also implementing water pressure reductions for nine hours and complete stoppages for 11 hours on July 7, affecting industrial zones [2][4]. These disruptions could significantly hamper TSMC’s production lines, potentially leading to delays and reduced output [8]. TSMC relies on vast amounts of ultra-pure water for cleaning silicon wafers and other critical processes [GPT].

geopolitical risks and supply chain concerns

These water shortages exacerbate existing geopolitical risks [7]. The US and its trade partners are actively reshaping global supply chains, with tariff deadlines approaching on July 9 [7]. China has warned of retaliation against any country sacrificing its interests for tax reduction agreements [7]. These tensions, combined with production vulnerabilities caused by water scarcity, could further fragment the semiconductor supply chain [alert! ‘impact on TSMC not explicitly stated in source, but logically inferred’]. The Blue Camp in Taiwan has criticized the idea of ‘giving TSMC to the United States’, highlighting the sensitivity surrounding the company’s strategic importance [8].

market leadership and stock performance

Despite these challenges, TSMC maintains a strong market position [9]. Fictitious online conversations have circulated, falsely attributing statements to TSMC executives about the difficulty of replicating the company’s success due to its unique ecosystem and culture of trust [6]. On July 3, 2025, TSMC’s stock price closed at NT$1090, a NT$5 increase, with a market capitalization of NT$28.26 trillion [5]. The Taiwan Stock Exchange index also rose by 135.23 points on the same day [5]. This suggests that investors, while aware of the risks, still hold confidence in TSMC’s long-term prospects [alert! ‘causal link between stock performance and water outages not explicitly stated, but inferred’]. TSMC employees in Taiwan are also scheduled to receive their quarterly bonuses this week [5].

tsmc’s response and mitigation efforts

TSMC is actively working to mitigate the impact of the water outages [8]. The company is implementing contingency plans, including the use of water tankers and optimization of water usage [8]. A TSMC spokesperson stated that they are closely monitoring the situation and taking all necessary measures to minimize any impact on production [8]. Furthermore, TSMC plans to expand its water recycling capacity at its Taichung facility by the end of 2025 [8]. These efforts demonstrate TSMC’s commitment to ensuring business continuity despite the ongoing water challenges [alert! ‘effectiveness of mitigation efforts cannot be determined from source’].

Bronnen

water outage tsmc operations