Tuesday, March 12th 2024
Chip Prices Face Possible Surge as Electricity Prices in Taiwan Set to Rise by 30%?
Prices of semiconductors could see a surge as Taiwan is set to charge "super consumers" such as TSMC as much as 30% more for electricity under the country's utilities pricing revision. A super-consumer is any entity that has drawn over 5 billion kWh over the past two years. The power company won't calculate this on the basis of the entire company, but its individual metering units. TSMC is spread across several manufacturing- and R&D facilities that are likely metered separately from each other. Prices for some of the smaller scale industrial consumers are only set to rise by 5% to 10%.
Taiwanese Minister of Economic Affairs Mei-Hua Wang tried to allay fears in the industry, in a recent comment pertaining to TSMC, saying that the foundry has implemented several energy conservation initiatives, is mainly an export-oriented company, and that even with the price hikes, electricity in Taiwan is among the cheapest in the world. Tom's Hardware provided more context. A kWh of electricity costs about 10 cents (USD $0.10) in Taiwan, in comparison to the state of Arizona, where it costs about 15 cents/kWh. Despite this, electricity is a key input cost for the semiconductor industry, and any price increase will have a direct impact on wafer costs. We'll have to wait and see by how much.
Many Thanks to TumbleGeorge for the tip.
Sources:
TrendForce, Tom's Hardware
Taiwanese Minister of Economic Affairs Mei-Hua Wang tried to allay fears in the industry, in a recent comment pertaining to TSMC, saying that the foundry has implemented several energy conservation initiatives, is mainly an export-oriented company, and that even with the price hikes, electricity in Taiwan is among the cheapest in the world. Tom's Hardware provided more context. A kWh of electricity costs about 10 cents (USD $0.10) in Taiwan, in comparison to the state of Arizona, where it costs about 15 cents/kWh. Despite this, electricity is a key input cost for the semiconductor industry, and any price increase will have a direct impact on wafer costs. We'll have to wait and see by how much.
32 Comments on Chip Prices Face Possible Surge as Electricity Prices in Taiwan Set to Rise by 30%?
A quick google search told me that one wafer takes about 500kW, 30% of that would be an increase of 15$ PER wafer... Granted that modern CPU or GPU wafers cost over 10000$, that is almost nothing.
Okay okay, my country Canada aint much better... But geeze we got snowstorms and stuff, barely time to pop our head out of the igloo each year. What more do you want from us?
This is a bit old, but it was the best thing I could find with a quick search.
esg.tsmc.com/en/focus/greenManufacturing/climateChangeAndEnergy.html
More up to date data here
esg.tsmc.com/en-US/resources/ESG-data-hub?tab=reportbuilder
I doubt this will have any major effects on the already absurdly expensive price that TSMC already charges
Not to mention imagined and real risks from earthquakes / tsunamis. I very well doubt anyone in Taiwan, SK, or Japan would be willing to license a new reactor site, after Fukushima.
There are mitigations, etc. but, the imagined risks (if only in public opinion) are a giant roadblock.Amusingly, some Danish company built a huge wind farm off the coast of Changhua County, and (as of ~4ya) TSMC is buying ALL their power production.
www.taiwannews.com.tw/en/news/3962736
Even a penny-per-X increase on mass-produced items, has bean counters and lobbyists searching for corners to cut, customers to gouge, and 'special dispensations' to be had (more than usual :laugh:).
Though it seems insignificant, it will not be looked at that way.
At the very least (from a 'westerner' PoV), these kinds of cost increases in major industries become excuses for more subsidies, etc.
"Never let a crisis (real, or imagined) go to waste" probably came from the Private Sector. :p
It's unlikely that the government would allow a big price rise without consulting the company that contributes 9% to the GDP, and also other large members of industry.
Besides, I'm glad Taiwan is reaping the benefits of their harvest, I really am, they deserve it.
But their prosperity is balancing on a knife's edge. I hope the rest of the world will be there to catch them in light of a natural disaster or geopolitical fallout, but I'm not exactly convinced. A number of things could change the world as we know it, just from the perspective of transistors... Yup.... precarious world we live in.
-with, France reversing course on the decision
www.reuters.com/world/europe/nuclear-debate-nears-french-minister-sees-potential-14-new-reactors-2024-01-07
-and pressuring Germany to follow suit
www.cleanenergywire.org/news/lingering-nuclear-dissent-between-paris-and-berlin-obstacle-eu-renewables-push
Note: Articles provided as copasetic points of reference only. I neither endorse, nor presume total accuracy/integrity of, the articles and their authors.
TBQH though, France has more expertise, experience, and more-advanced reactors (and waste management/mitigation options).
Also, considerably less risk of a giant wave coming and ruining everyone's day :twitch:
So, it's far from apples to apples.
*Which, Japanese and US mil-industrial contractors have made great contributions towards.Sadly, the issue is seemingly less the technology, and more the organizations that run the reactors. As I recall, TEPCO had been found grossly incompetent on multiple fronts (regarding the 2011 disaster).
From what I can gather, that's not an issue limited to Japanese Business Culture and Regulatory ineptitude, either. IIRC, even into recent years, there are USMIL nuclear accidents still being declassified.