Taiwan's energy crunch could ‘throw a wrench' into the global semiconductor industry

Taiwan has endured three major outages in the last seven years, accompanied by a slew of smaller disruptions in the past year.

"Concerns over potential power shortages and the deterioration of power quality and reliability could pose operational risks for the semiconductor industry," Chen Jong-Shun, assistant research fellow at Chung-Hua Institution for Economic Research, told CNBC."Taiwan has both an energy crunch and, even more importantly, an electricity crunch," said Joseph Webster, senior fellow at the Atlantic Council's Global Energy Center., and come primarily from coal and gas.

For one, with electricity prices rising for semiconductor firms, the higher costs are expected to be passed on to consumers, according to Brophy.Taiwan's industrial consumers accounted for over 55% of its electricity consumption in 2023, according to the Atlantic Council's Webster. These consumers, including semiconductor firms, often require constant and reliable access to electricity.

"The global electricity industry has been surprised by the pace and scale of electricity demand from artificial intelligence's data centers," said Webster, adding that Taiwan's future electricity consumption is subject to"considerable uncertainty."

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