Hsinchu, Taiwan – A crane bird flies across a silent rice paddy, the water slowly trickling in the background. It is a tranquil and stereotypical image of an East-Asian countryside. Little seems to suggest I am just a few kilometres removed from one of the hearts of the global economy.
This is Hsinchu, a small city close to Taipei in Taiwan. It is what you could literally call the Silicon Valley of the world.
Just a few kilometres from the tranquil rice paddies, gargantuan buildings rise from the ground, air conditioning humming permanently over the bustle of traffic. These are the factories that build the silicon chips or semiconductors that make our smartphones, computers and even artificial intelligence (AI) systems such as ChatGPT work.
Yet these two worlds, tranquil nature and high-tech manufacturing, are increasingly clashing on the island.
Taiwan is the world leader in the production of computer chips.
Taiwan Semiconductor Manufacturing Company Limited (TSMC) is the largest chip manufacturer in Taiwan. By the third quarter of 2024, it had conquered 64 percent of the global semiconductor market, according to research firm Counterpoint.
The second-biggest player, South Korea’s Samsung Foundry, represented only a distant 12 percent.
Chip manufacturing makes up an outsized part of Taiwan’s economy and contributes 25 percent of the gross domestic product (GDP) of the island. In 2020, the market value of TSMC was equal to the size of half of Taiwan’s economy, as per a study at the time.
Few countries seem to be able to outdo the Taiwanese at manufacturing chips. However, this semiconductor success is also raising sustainability issues.
Chip manufacturing consumes large amounts of water and energy, and emits emissions through chemicals. TSMC alone consumes about 8 percent of the island’s electricity, according to a recent report by S&P Global Ratings.
“After the petrochemical industry, the electronics industry is the biggest emitter of Taiwan,” Chia-Wei Chao, the research director at the nonprofit Taiwan Climate Action Network and adjunct assistant professor at the National Taiwan University, told Europepulse.
“Semiconductors are also a rapidly growing industry, which is worrying, to say the least.”
This is even bringing them into conflict with the farmers that Taiwan’s chip factories are located near.
In 2021, during a drought, the Taiwanese government halted irrigation of farms, so the huge chip factories could use the saved water. Today, anxiety is growing over how solar farms, which are needed to power chip manufacturing, might take up farmland.
“There seems to be a lack of systemic analysis on the environmental effects on semiconductor production,” Josh Lepawsky, a professor of geography at Memorial University of Newfoundland in Canada, told Europepulse
