The Shift That Concerns Tech Giants: Why TSMC May Have to Produce Its Own Energy

Taiwan is preparing a regulatory change that could have significant consequences for companies that consume large amounts of energy, particularly for TSMC, the world's leading semiconductor manufacturer. The Taiwanese government is indeed working on an update to the Energy Management Law, which would require large commercial users to install their own energy production and storage infrastructure.

The proposal will be examined by the Taiwanese parliament on July 22 and would involve all industrial entities with an electricity consumption equal to or greater than 5 MW. This includes over 400 facilities belonging to the semiconductor, optoelectronics, steel, chemicals, and data center sectors dedicated to artificial intelligence.

Currently, renewable energy regulations already require large consumers to offset 10% of their energy usage through renewable sources. However, the new measure would introduce a broader obligation, directly asking companies to equip themselves with autonomous generation and storage systems.

TSMC and the Impact of the New Regulation

TSMC would be the company most affected by this change, being the largest consumer of electricity on the island. According to reported data, in 2024, the company utilized approximately 25.55 billion kWh of energy in its Taiwanese operations, an amount equivalent to about 9% of the entire national electricity consumption.

The potential obligation to power factories through proprietary energy facilities could reduce the economic advantages derived from using the public electricity grid. Currently, TSMC benefits from economies of scale provided by centralized energy distribution, while autonomous production would require investments and a much more complex management process.

The company has several production facilities in Taiwan, including six large 12-inch wafer factories, four dedicated to 8-inch wafers, one 6-inch factory, along with several plants specialized in advanced packaging. The new regulation would still allow for a period of time for companies to establish the necessary infrastructure. In case of non-compliance, moderate economic penalties would be applied.