TSMC consumes almost a tenth of Taiwan’s total electricity consumption

Taiwan’s government is preparing a decisive regulatory tightening that will require major commercial and industrial energy users to deploy their own generation and storage infrastructure for electricity.

The measure, which provides an exemption only for institutions of public importance such as schools and hospitals, aims to ease the pressure on the national grid, but will lead to an inevitable increase in operating costs for large corporate entities.

Among the entities most affected by this decision is TSMC(Taiwan Semiconductor Manufacturing Company), whose vast production network currently accounts for a share close to one tenth of the country’s total energy demand, placing the company in front of a complex and costly reorganization.

TSMC consumes too much electricity, will have to produce it themselves

The Ministry of Economic Affairs of Taiwan is guiding the drafting of an important amendment to the Energy Management Act, with parliamentary debate scheduled for July 22.

Until now, local renewable energy regulations already required large consumers to compensate for 10% of their energy needs through the use of clean sources. The new proposed law, however, goes much further, making mandatory for large companies the direct installation of standalone production and storage systems.

The ministerial provisions aim to include all commercial entities characterized by an electrical load equal to or greater than 5 MW.

This classification will involve more than 400 industrial hubs active in petrochemicals, steelmaking, optoelectronics, and, naturally, semiconductor manufacturing, not to mention the modern data centers necessary for processing artificial intelligence.

The impact on the semiconductor giant

Being by far the island’s biggest electricity consumer, TSMC will bear the biggest impact if the amendment is finally approved.

The group’s nationwide infrastructure is sprawling: it includes six colossal GIGAFAB facilities for 12-inch wafers, four specialized laboratories for 8-inch wafers, a facility dedicated to 6-inch wafers, and multiple hubs for advanced chip assembly and packaging.

During 2024, these production facilities consumed the incredible amount of 25.55 billion kWh. Such a volume is equivalent to about 9% of the country’s total electricity consumption. Forcing a supply chain of this scale to depend on private power plants will cause the company to lose the economies of scale and the advantages guaranteed so far by heavy withdrawals from the national power grid.

Replacing a supply of this magnitude with isolated or dedicated plants represents a huge challenge. Authorities will offer a grace period to allow companies to install the required systems, attaching fines (though small in amount) in cases of non-compliance.

Despite the accelerated timelines, the commitment to hosting generation parks and massive storage batteries will be felt, deeply weighing on the balance sheets of the island’s major industrial players in the coming years.