Drought hits Taiwan chip supply as Biden asks for more

Published
image copyrightGetty Images

Plans to ramp up production of chips in Taiwan have been hampered by droughts, affecting factories' water supplies.

Lockdowns around the world have led to an unusually high demand for technology such as laptops and games consoles.

Meanwhile, demand for cars has stayed low, with factories shut.

But now demand is picking up, carmakers are finding it harder to source chips, a key component as new vehicles can come packed with more than 100 microprocessors.

Executive order

Earlier this month, GM's chief executive said the shortage could take $2bn (£1.4bn) off its profits.

Ford and others said it had affected production of cars and lorries.

US President Joe Biden has signed an executive order calling for a 100-day review to increase domestic production of chips in the long term.

And in a letter sent last weekend, his economics adviser Brian Deese thanked the Taiwanese government for its help addressing the crisis.

Using lorries

The island nation, one of the world's biggest producers of chips, had promised to help the US, Germany and Japan by speeding up manufacture.

But now it faces restrictions on the amount of water that can be used.

And several Taiwanese chip companies, including TSMC and United Microelectronics, have said they will have to start using lorries to supply water.

TSMC said it needed 156,000 tonnes of water per day, even though it reuses more than 85% of it.

More on this story