Tuesday, June 28th 2022

TSMC Expected to be Affected by Increased Electricity Costs in Taiwan

The island of Taiwan is in many ways very much still stuck in an era where the government controls most utilities and where there is little to no competition. For example, the government controls fuel prices, be that for your motor vehicle or for cooking and heating. This also applies to the cost of electricity in most cases and the Ministry of Economic Affairs has announced that the electricity price will increase by up to 15 percent for high usage customers, which translates to the industry. The increase might sound tiny at just over 1.3 cents per kilowatt hour, for a total cost of 10.43 cents per kWh. However, a company like TSMC that uses a lot of electricity, is expected to see an increase in costs of at least US$135 million per year, according to some Taiwanese news sources, while others claim it'll be as much as US$270 million.

TSMC does in all fairness produce some of its own electricity thanks to solar panels on many of its buildings and the company has also invested heavily in renewable energy. In fact, TSMC has bought up almost all available renewable capacity in Taiwan and the company is committed to using 100 percent renewable energy in the long term. Currently a mere 8 percent (based on 2020 estimates) is coming from TSMC's own efforts, but the company should be at somewhere around 12-15 percent overall. Even so, these extra costs are likely to be reflected in future customer pricing. It's the first price hike in four years, but as Taiwan is a manufacturing nation, TSMC is unlikely to be the only company affected, but the price hike is related to global inflation and is targeting high-usage businesses and consumers alike.
Sources: Yahoo News Taiwan, via @dnystedt
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30 Comments on TSMC Expected to be Affected by Increased Electricity Costs in Taiwan

#26
Bomby569
WirkoThey may have restrictions like limited power use at certain hours
not sure if you were specificaly talking about TSM here, but if you are i think they work 24/7, and they need to. They really can't do that.

They also use a lot of water, it's the price of having a large company with lots of employees and generating a lot of money for the country, you can't really have it all.
But i really don't understand this places in Asia, especially a island, why they don't bet on offshore wind farms like we do in Europe?
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#27
R0H1T
Bomby569i think they work 24/7, and they need to. They really can't do that.
Yes they work 24x7 but not everything needs to be done 24x7 or 365 days a year. Like water filtration/purification among other things ~
en.wikipedia.org/wiki/Ultrapure_water
Some of these tasks can be done when electricity consumption isn't that high.
Posted on Reply
#28
Wirko
R0H1TYes they work 24x7 but not everything needs to be done 24x7 or 365 days a year. Like water filtration/purification among other things ~

Some of these tasks can be done when electricity consumption isn't that high.
Yes, that's what I mean. Going by this example, they can build an oversized water purification plant and run it for 16 hours a day instead of 24, just to have flexibility in power usage. Or install 25 ovens to bake the photoresist instead of 20.
Posted on Reply
#30
ratirt
TSMC affected by electricity price. Who is not affected? I had to pay from $200-$400 per month over this half a year period trying to save and cut anything unnecessary. Now it dropped to a $150 when normally I would get $30 bill not even thinking about cutting usage. Funny thing is, some of my friends had to spit out $1000 per month
TheLostSwedeSomeone on Twitter worked out the electricity price hike to end up costing TSMC 0.5-1 percent of its revenue.

that is like nothing and yet companies are looking for a reasons to bump the prices.
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