Chip Prices Face Possible Surge as Electricity Prices in Taiwan Set to Rise by 30%?

[btarunr]

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.

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[Space Lynx]

RIP zen 5 and rdna4 dreams

 

[Gucky]

Wow 30%...it is still less then half of what I pay...

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.

 

[Broken Processor]

Why is this news unless they are saying here's our latest reason to gouge the price when in reality it's a rounding error compared to wafer cost.

 

[Dimitriman]

You guys are all correct. This is just the latest KY lube before the cartel's giant price batton gets pushed ungently on all the PC consumers to make more headroom for Aaay Ihhhh production.

 

[qlum]

Wow 30%...it is still less then half of what I pay...

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.

It's not just the wafer though, energy prices impact the whole facility. That beong said I don't expect it to be a noteworthy increase.

 

[iameatingjam]

Just to broaden the conversation a bit... its always a good idea to diversify your supply lines. You never want to be caught with your pants down if any one individual country decides they want to make a mockery of you. Look I don't even care if you buy oil from Russia ( okay I do a little bit) but the point is, if the dependence runs so deep that you cannot function without that one supplier without all hell breaking loose... I would say its a problem and time to diversify. And I'm not even going to single out anybody, except Germany. Come Germany, like what are you doing?

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?

 

[Readlight]

Wait for wind.

 

[Melvis]

Gosh! I can only dream of Electricity at that cost compared to 40c which what I pay.

 

[TheLostSwede]

Good thing that TSMC has special electricity contracts and are doing everything they can to become more energy efficient. I wouldn't worry too much about this when it comes to TSMC, worry about other manufacturers instead. Also, electricity has been way too cheap in Taiwan for way too long, same with the water rate.

This is a bit old, but it was the best thing I could find with a quick search.

Climate Change and Energy Management: Green Manufacturing - TSMC Corporate Social Responsibility

More up to date data here

TSMC ESG - Sustainability report, ︀ theme report, ︀ policies and certifications

Sustainable Report, UN SDGs Action Report, Materiality Analysis Report, TCFD Reports, Environmental Profit and Loss Analysis Report and a number of TSMC policies, certifications and verifications.

esg.tsmc.com

 

[beedoo]

Wait for wind.

I've already got wind!

 

[Space Lynx]

Good thing that TSMC has special electricity contracts and are doing everything they can to become more energy efficient. I wouldn't worry too much about this when it comes to TSMC, worry about other manufacturers instead. Also, electricity has been way too cheap in Taiwan for way too long, same with the water rate.

This is a bit old, but it was the best thing I could find with a quick search.

Climate Change and Energy Management: Green Manufacturing - TSMC Corporate Social Responsibility

More up to date data here

TSMC ESG - Sustainability report, ︀ theme report, ︀ policies and certifications

Sustainable Report, UN SDGs Action Report, Materiality Analysis Report, TCFD Reports, Environmental Profit and Loss Analysis Report and a number of TSMC policies, certifications and verifications.

esg.tsmc.com

I'm just glad you are in Sweden now. China's rhetoric is growing more and more disturbing in regards to Taiwan.

 

[theouto]

Oh for fucks sake, last thing we needed, more expensive chips.

 

[Denver]

If you had headlined it "Electricity will be 3 cents more expensive per kwh" in Taiwan, no one would have taken it seriously.

I doubt this will have any major effects on the already absurdly expensive price that TSMC already charges

 

[Wirko]

Just to broaden the conversation a bit... its always a good idea to diversify your supply lines.

Yeah, unless you do diversification Intel's way: make processors from Intel and TSMC parts, so wherever in the world there's a disruption of supply, they have a reason to raise retail prices. Win-win! (we win twice, you lose)

 

[kondamin]

They have the capital to build their own nuclear plants and charge the state for power.

 

[LabRat 891]

If you had headlined it "Electricity will be 3 cents more expensive per kwh" in Taiwan, no one would have taken it seriously.

People have trouble extrapolating scale. TBQH, I'm not-much good @ it, either (at least fields that aren't 'special interests')

I doubt this will have any major effects on the already absurdly expensive price that TSMC already charges

30% is still nearly a 1/3 increase. At the scale of power consumption from Taiwan's chipmaking industries, that's not insignificant.

They have the capital to build their own nuclear plants and charge the state for power.

Capital, yes. Not sure about the space or licensing, however.
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.

Wait for wind.

I've already got wind!

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.

Taiwan chip giant TSMC places world's largest wind power order with Ørsted | Taiwan News | Jul. 8, 2020 19:51

TSMC will buy all energy produced by Greater Changhua 2b and 4 wind farms for 20 years | Jul. 8, 2020 19:51

www.taiwannews.com.tw

 

[Denver]

People have trouble extrapolating scale. TBQH, I'm not-much good @ it, either (at least fields that aren't 'special interests')

30% is still nearly a 1/3 increase. At the scale of power consumption from Taiwan's chipmaking industries, that's not insignificant.

As far as I know, a wafer consumes around 200Kwh throughout the chain, 200 x 0.03 = $6, compared to the cost of a 17,000 5nm wafer. So yes, this is irrelevant, increase it by 10x and it will still be irrelevant.

 

[LabRat 891]

As far as I know, a wafer consumes around 200Kwh throughout the chain, 200 x 0.03 = $6, compared to the cost of a 17,000 5nm wafer. So yes, this is irrelevant, increase it by 10x and it will still be irrelevant.

How many wafers per unit time (on average) are produced though? Last I recall reading, the 'silicon fab industry' ate up the majority of Taiwan's grid capacity.
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 ).
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.

 

[Wirko]

goog("tsmc revenue 2023") / goog("taiwan gdp 2023") = 0.0916

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.

 

[iameatingjam]

Yeah, unless you do diversification Intel's way: make processors from Intel and TSMC parts, so wherever in the world there's a disruption of supply, they have a reason to raise retail prices. Win-win! (we win twice, you lose)

I was just speaking in broad terms, as in, its generally good for a country to diversify is supply lines for essential goods so that one supplier can't throw your whole system into whack.

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.

 

[TheLostSwede]

They have the capital to build their own nuclear plants and charge the state for power.

The Taiwanese population is very "anti-nuke" and the long term goal is to shut down all the nuclear power plants in Taiwan. There's in fact one that was finished and ready to start production on the east coast (in the Gongliao district), but it was never commissioned due to the anti-nuke protests after Fukushima. Admittedly the message in English sounded more like they were against nuclear weapons, but hey...

 

[LabRat 891]

The Taiwanese population is very "anti-nuke" and the long term goal is to shut down all the nuclear power plants in Taiwan. There's in fact one that was finished and ready to start production on the east coast (in the Gongliao district), but it was never commissioned due to the anti-nuke protests after Fukushima. Admittedly the message in English sounded more like they were against nuclear weapons, but hey...

IIRC, France and Germany did similar.
-with, France reversing course on the decision

https://www.reuters.com/world/europ...ter-sees-potential-14-new-reactors-2024-01-07

-and pressuring Germany to follow suit

Lingering nuclear dissent between Paris and Berlin obstacle for EU renewables push

www.cleanenergywire.org

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

So, it's far from apples to apples.

 

[TheLostSwede]

IIRC, France and Germany did similar.
-with, France reversing course on the decision

https://www.reuters.com/world/europ...ter-sees-potential-14-new-reactors-2024-01-07

-and pressuring Germany to follow suit

Lingering nuclear dissent between Paris and Berlin obstacle for EU renewables push

www.cleanenergywire.org

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

So, it's far from apples to apples.

Also, neither country have regular earth quakes or lie next to a major fault line... Or typhoons.

 

[kondamin]

The Taiwanese population is very "anti-nuke" and the long term goal is to shut down all the nuclear power plants in Taiwan. There's in fact one that was finished and ready to start production on the east coast (in the Gongliao district), but it was never commissioned due to the anti-nuke protests after Fukushima. Admittedly the message in English sounded more like they were against nuclear weapons, but hey...

Even Japan got over their nuclear phobia, and Taiwan is in the same boat of being a high tech nation with little to no natural resources.