---
title: a chip fab still waits for rain
canonical_url: https://ensurance.app/guide/a-chip-fab-still-waits-for-rain
markdown_url: https://ensurance.app/guide/a-chip-fab-still-waits-for-rain.md
subtitle: "the year no typhoon reached Taiwan, and the factories that trucked in water"
category: natural-capital
---

# a chip fab still waits for rain

*the year no typhoon reached Taiwan, and the factories that trucked in water*

**Semiconductor water use** is the water a chip factory needs to make chips. AFP described it as water for cleaning the chips, keeping foundries hyper-sterile and washing away waste chemicals. In 2019 TSMC alone used about 156,000 metric tons of water a day across Taiwan's three science parks, AFP reported. The public supply behind that figure depends on rain.

In 2020, for the first time in 56 years, no typhoon made landfall in Taiwan. In the first three months of 2021 rainfall ran below 40% of the usual rate. By late February the Second Baoshan Reservoir, which serves Hsinchu, where TSMC has its main base, stood at 14.62% of capacity. The world's largest contract chipmaker began ordering water by the truckload.

Production did not stop. The factories kept running on trucks, wells, a new pipeline and their own storage, while the thing they depend on most sat outside every fence: the rain, and the mountains and rivers that help gather it into reservoirs. Those mountains and their rivers helped do that work before the first fab was built, and they do it whether or not anyone pays. The fabs depend on them, and so do the farms and households downhill. What **ensurance** adds is an account for a living place like that, so the ones who depend on it can pay for its keeping. The account is not the mountain, and no account brings a typhoon.

## what happened in 2021

TSMC told Reuters in February 2021 that its first truckloads were a "pressure test" to prepare for future demand, and that it had seen no impact on production. By May 2021, AmCham Taiwan reported, manufacturers in Hsinchu Science Park had been asked to cut their use of the municipal supply by 13%, and water trucks had been rolling in for months.

On 6 April 2021 the government put more than a million households and businesses in central Taiwan on rationing, with taps cut two days a week. Industrial users in Taichung, Miaoli and Changhua were told to cut use by 15%. TSMC said its Taichung operations would not be affected because it would draw more water from tanker trucks, and it ran drills to pump groundwater. By late April, in southern Taiwan, the largest reservoir, Tsengwen, fell below 12% of capacity, and the Baihe reservoir ran dry.

Hsinchu held on with gray works. A pipeline that came online in January 2021 brought more than 20,000 metric tons a day from Taoyuan. An emergency desalination plant and eight emergency wells added more. Then the rain came. On 6 June 2021 the economics minister ended rationing in Taichung, Miaoli and northern Changhua after days of rain.

The drought arrived in the middle of a global chip shortage that had already pushed Ford, Nissan and Volkswagen to scale back car production. The chain was three links long: rain on the mountains, the fabs in the science parks, and the carmakers and device makers waiting on chips.

## what sits beyond the fence

Nobody in this story was careless. TSMC had contingency plans for each stage of water restrictions, and it said so. In a climate disclosure reported in September 2021, the company said it had storage at each fab for at least two days of water use and had sought sources that could supply 20% of its water during the strictest restrictions.

That is serious risk work. Storage, recycling rates, unit water use and a trucking contract are things a plant can measure and control itself. The reservoir level, the rain that fills it and the condition of the slopes above it sit with others: a water agency, a forestry agency, the weather.

> The most advanced factory on earth still waits for rain.

The season is stored upstream, in reservoirs, in groundwater and in the soils of forested catchments that the plant does not own and does not pay for.

## gray sources and natural sources on one desk

The gray sources are billed. The utility bill for city water. The trucking contract. The wells and their pumps. The Taoyuan pipeline and the desalination plant, which AmCham Taiwan lists among the supplies that kept the Baoshan reservoirs from running dry. TSMC's own reclaimed water: in 2022 it opened a reclaimed water plant in the Southern Taiwan Science Park, which it describes as the first private water reclamation plant in Taiwan.

The natural sources are not billed. The typhoon and seasonal rains. The mountain slopes and rivers that carry that rain to the reservoirs. The forests that the national forestry agency's site says cover 60.7% of Taiwan's land and help conserve its water resources.

The two are tied together. A reservoir is gray infrastructure that only works because of the natural catchment above it, and the condition of that catchment shapes how much the reservoir can hold. At Shihmen reservoir in northern Taiwan, a 763 square kilometer watershed of steep slopes and erodible rock feeds the lake. Typhoon rains produced 89% of its sediment inflow between 1963 and 2005. One typhoon in August 2004 dropped 973 millimeters on the watershed in two days and cut the reservoir's volume by 11%. A reservoir that has lost storage to sediment has less to give in the dry year that follows. The rain that fills the lake also brings down the hillside, and the hillside is part of the supply. Shihmen is not one of the reservoirs named in the 2021 reports, and nothing here says sediment caused that year's shortage.

## who else leaned on the same rain

Farmers' fields went without water in central Taiwan. Households lost their taps two days a week.

A natural source serves many properties at once. That is why one dry year reached a whole island at once, and why the cost of keeping the source is one many parties could share. The people a source protects are its [serviceshed](/guide/what-is-a-serviceshed?from=guide).

## what a forest cannot do

No forest makes a typhoon. Keeping the mountain catchments would not have brought rain in 2020, and nothing here says it would have. A consultant interviewed by AmCham Taiwan during the drought said the island remains "relatively blessed" with water. The magazine reported that Taiwan's average annual rainfall had not decreased; the problem is that it swings from year to year.

The claim is narrower. In ordinary years the catchments gather the rain and the reservoirs hold it, and the condition of the slopes shapes how much storage is left for the dry ones. That dependence is real, it is shared, and, in the sources used here, it is not a line on any plant's bill. Gray works kept the fabs running until the rain returned in 2021, and they will be needed again. Keeping the source sits beside them, not in place of them.

:::johnson
**a fab can store days of water. the season is stored upstream.** The catchments, reservoirs and groundwater a plant draws on belong on its risk map, beside the trucks and the tanks.

[Find the accounts on the map →](/explore?from=guide)
:::

## the bill and the source

| line | 2021, Taiwan |
|---|---|
| The property | Chip fabs in Taiwan's science parks, TSMC's among them |
| The source | Typhoon and seasonal rain, gathered in part by mountain catchments into reservoirs such as Second Baoshan, and the groundwater beneath |
| The bill it landed on | Avoided operating cost (trucked water, wells, conservation) and protected earnings (production kept running); see [what ensurance saves you](/guide/what-ensurance-saves-you?from=guide) |
| Who else leaned on it | Over a million households and businesses on rationing, farmers, other chipmakers and display makers, and the carmakers waiting on chips |
| What keeping it looks like | No work to keep the Baoshan catchment is documented in the sources used here. At Shihmen, watershed management is allotted only 0.1 million cubic meters a year of sediment reduction, as most typhoon landslides are in inaccessible mountains. Gray side: the Taoyuan pipeline (January 2021) and TSMC's reclaimed water plant (2022) |

What that dependence is worth paying for, and who should pay how much, is the subject of [what a source is worth paying for](/guide/what-a-source-is-worth-paying-for?from=guide).

## where to start

If you run a plant, write down where its water comes from past the meter: which reservoir, which river, which aquifer, and which mountains feed them. Then ask who else draws on the same source. [What you depend on](/guide/what-you-depend-on?from=guide) walks through that list. Data centers face the same question, told in [data centers drink water](/guide/data-centers-drink-water-ensurance-refills-the-glass?from=guide), and the trucked-water invoice is the subject of [water risk is a bill you can prepay](/guide/water-risk-is-a-bill-you-can-prepay?from=guide).

The [water abundance](/water-abundance.ensurance?from=guide) and [water cycle](/water-cycle.syndicate?from=guide) accounts already exist for purposes wider than one place. If the catchment you depend on has no account of its own, you can [suggest one](/specific/create?mode=suggest&agent=water-abundance.ensurance&name=Baoshan%20reservoirs%20watershed&from=guide) and co-create it. Companies can see how this applies to them on [corporations](/solutions/corporations?from=guide&topic=outside-the-property-line), or [talk it through with us](/contact?from=guide&topic=outside-the-property-line). Ensurance pays no claim and makes no rain; [what ensurance cannot do](/guide/what-ensurance-cannot-do?from=guide) sets out the limits.

## frequently asked questions

### how much water does a chip fab use?

AFP reported that TSMC used about 156,000 metric tons of water a day across Taiwan's three science parks in 2019. The Register put a single manufacturing plant at two to four million gallons a day (about 7,600 to 15,100 metric tons).

### why does semiconductor water use matter?

Because a fab cannot run without a steady supply, and that supply depends on rain held in reservoirs and groundwater the fab does not control. In 2021 TSMC said production was not affected while it ordered water by truck, and other makers also reported trucks, wells and storage. The source sat outside every plant's fence.

### what did Taiwan do in 2021?

It rationed water for more than a million households and businesses in central Taiwan from 6 April, asked industrial users to cut use, brought water to Hsinchu by a new pipeline from Taoyuan, and added emergency wells and desalination. Rationing in central Taiwan ended on 6 June 2021 after days of rain.

## sources

[AFP via IndustryWeek, "Taiwan's worst drought in decades deepens chip shortage jitters," 21 April 2021](https://www.industryweek.com/supply-chain/article/21161812/taiwans-worst-drought-in-decades-deepens-chip-shortage-jitters) — No typhoon landfall in 2020 for the first time in 56 years; first-quarter rainfall below 40% of usual; Tsengwen below 12% and Baihe dry; rationing for over a million households and businesses; TSMC's 156,000 metric tons a day in 2019; TSMC's statement on contingency plans; carmakers scaling back

[The Register, 24 February 2021](https://www.theregister.com/2021/02/24/tsmc_drought/) — Second Baoshan Reservoir, serving Hsinchu, at 14.62% of capacity; TSMC ordering water by the truckload; two to four million gallons a day for a single plant

[Reuters via Investing.com, "Chipmakers in drought-hit Taiwan order water trucks to prepare for the worst," 24 February 2021](https://uk.investing.com/news/stock-market-news/chipmakers-in-droughthit-taiwan-order-water-trucks-to-prepare-for-the-worst-2309490) — TSMC's "pressure test" and no impact on production

[Tom's Hardware, "Taiwan water rationing could hurt GPU, display panel production," 25 March 2021](https://www.tomshardware.com/news/taiwan-water-rationing-hurts-hardware-production) — A 15% cut for industrial users in Taichung, Miaoli and Changhua from 6 April; TSMC's tanker trucks and groundwater drills; AUO and Innolux recycling and storage

[AmCham Taiwan, Taiwan Business TOPICS, "Water shortage threatens Taiwan's tech industry development," May 2021](https://topics.amcham.com.tw/2021/05/water-shortage-threatens-taiwan-tech-industry-development/) — Hsinchu Science Park's 13% cut and water trucks; the Taoyuan pipeline, desalination plant and eight emergency wells; "relatively blessed"; average annual rainfall not decreased

[Focus Taiwan (CNA), "Taiwan announces end to water rationing in central region," 6 June 2021](https://focustaiwan.tw/society/202106060004) — Rationing ended in Taichung, Miaoli and northern Changhua after days of rain

[Taiwan News, "Taiwan's TSMC continues to improve water management," 20 September 2021](https://www.taiwannews.com.tw/en/news/4292388) — Storage for at least two days at each fab; sources for 20% of supply under maximum restrictions

[TSMC 2024 Annual Report, water management](https://investor.tsmc.com/static/annualReports/2024/english/ebook/files/basic-html/page159.html) — Southern Taiwan Science Park reclaimed water plant, launched 2022, first private water reclamation plant in Taiwan

[Forestry and Nature Conservation Agency, "Our vision"](https://www.forest.gov.tw/en/vision) — Forests cover 60.7% of Taiwan's land and help conserve water resources

[International Hydropower Association, Shihmen sediment management case study](https://www.hydropower.org/sediment-management-case-studies/chinese-taipei-shihmen) — Steep, erodible 763.4 km² watershed; 89% of sediment inflow from typhoon rains, 1963 to 2005; Typhoon Aere's 973 mm and 11% volume loss in 2004; only 0.1 million cubic meters a year of sediment reduction allocated to watershed management, limited by inaccessible terrain

## the series

Ten posts on losses that started outside the property line, and the living sources behind them.

1. [the loss started outside the property line](/guide/the-loss-started-outside-the-property-line?from=guide) — **read first:** one flooded factory, and every hospital that depends on it
2. [a hospital cannot store a watershed](/guide/a-hospital-cannot-store-a-watershed?from=guide) — Mission Hospital, Asheville, 2024
3. [a chip fab still waits for rain](/guide/a-chip-fab-still-waits-for-rain?from=guide) — this post
4. [the factory was sound. the floodplain was full](/guide/the-factory-was-sound-the-floodplain-was-full?from=guide) — the 2011 Thailand floods
5. [the office park stands where the marsh was](/guide/the-office-park-stands-where-the-marsh-was?from=guide) — Chennai, 2015
6. [a lot is not a home until the water is promised](/guide/a-lot-is-not-a-home-until-the-water-is-promised?from=guide) — the Phoenix area, 2023
7. [the resort never owned the trees](/guide/the-resort-never-owned-the-trees?from=guide) — Sierra-at-Tahoe and the Caldor Fire, 2021
8. [every ship spends water the forest gathered](/guide/every-ship-spends-water-the-forest-gathered?from=guide) — the Panama Canal, 2023
9. [what a source is worth paying for](/guide/what-a-source-is-worth-paying-for?from=guide) — from avoided loss to the most you should pay
10. [how to map what your property depends on](/guide/how-to-map-what-your-property-depends-on?from=guide) — draw the map one ring wider than the deed