Taiwan’s chipmakers cast doubts over government green energy goals

The chip manufacturing industry in Taiwan has expressed concern about the government’s plan to introduce new sources of green energy. Consequently, chipmakers doubt whether the agency can meet their energy security needs. 

During an event on Thursday, October 23, Taiwan Semiconductor Industry Association Chair Cliff Hou mentioned that the industry is concerned about whether the government can effectively incorporate new supplies as previously pledged. 

“We hope the government will share an updated schedule for green energy supplies for us to review,” added Hou, who also serves as a senior vice president at Taiwan Semiconductor Manufacturing Co. 

Energy analysts raise concerns about Taiwan’s energy supply status

Earlier reports from reliable sources indicated that Taiwan faces significant challenges in accelerating the adoption of renewable energy in the manufacturing industry. To address this, the government had first pledged to ensure 20% of its energy comes from renewable sources by mid-decade. However, they later lowered this target to 15% by 2025.

As of late 2024, data released from Taiwan’s energy administration highlighted that the total percentage of renewables accounted for less than 12% of the overall energy mix.

In May, energy analysts raised concerns about the island’s energy supply status. This was after they released reports stating that the ruling party had closed Taiwan’s last nuclear reactor, eliminating a power source that provided approximately 5% of the nation’s electricity the previous year.

Therefore, since Taiwan lacks a sufficient nuclear power supply, it may be forced to rely more on imported fuels, such as liquefied natural gas, to support industries that require a significant amount of energy, including chip manufacturing. 

The fuel price hikes and investments in renewable energy have created financial strain for Taipower, Taiwan’s major electricity supplier. To keep prices affordable, the state-owned utility has absorbed rising expenses and reported losses surpassing NT$420 billion, equivalent to about $13.6 billion, by the end of last year. 

Taiwan faces significant energy issues amid nuclear vote defeat

Reports dated August this year highlighted that a weekend vote to restore a crucial nuclear plant in Taiwan was defeated. Following this outcome, sources noted that the island’s government is struggling to address energy security challenges and meet the increasing demands of a significant semiconductor industry. 

Regarding the vote conducted, approximately 74% of voters in a recent referendum favored the reopening of the Maanshan nuclear plant, which was closed earlier this year.

This illustrates a big shift from 2021, when voters rejected a proposal to reopen an inactive plant in Lungmen. Still, sources close to the situation mentioned that the supportive votes did not reach the 25% of eligible voters required for the opposition-backed referendum to pass, thereby allowing for a more limited use of nuclear power in Taiwan.

The entire episode also inspired analysts like William Yang from the International Crisis Group to comment on the subject at hand. Yang stated that this result still sends an important message about shifting public opinion.

“It also shows that the public is worried about Taiwan’s energy security and ability to maintain a steady energy supply,” Yang added.

Meanwhile, the semiconductor industry in Taiwan claims it is not affected by China’s new export restrictions on rare earths. Unlike in the electric vehicle and consumer electronics industries, local chipmakers stressed that their production processes do not depend on China’s rare earths.

The newly restricted substances are not used in chip manufacturing, the Taiwan Ministry of Economic Affairs statement said, so there will be no disruption to its semiconductor production.

China recently announced that it would add five more elements to the restricted rare earth list, following Beijing’s intensifying of its grip on critical materials ahead of a planned meeting between Chinese President Xi Jinping and US President Donald Trump.

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