Taiwan's Economy
Taiwan's Energy Dilemma
How energy-hungry chip fabs strain Taiwan's power supply, why Taiwan phased out nuclear power in 2025, and its reliance on imported LNG.
Taiwan imports almost all its energy.
Demand
- Chip fabs use huge amounts of electricity and water.
- TSMC alone uses a significant share of Taiwan’s power.
Supply
- LNG and coal imports generate most electricity.
- Renewables, especially offshore wind, are growing.
Nuclear phase-out
- Taiwan pursued a nuclear-free homeland policy.
- The last reactor shut in May 2025.
- A referendum in August 2025 on restarting a plant passed by majority but failed to meet the turnout threshold.
Vulnerability
- LNG reserves last only about 11 days.
- A blockade could quickly cause energy shortages.
Water
Chip fabs also need lots of water; a 2021 drought forced water rationing.
Trade-off
Balancing industry, security, climate and public opinion is difficult.
The drought year
During the 2021 drought, trucks delivered water to chip fabs, showing how vulnerable high-tech industry is to resources.
Thinking tech industries need little energy
Chip fabs are very energy- and water-intensive.
Key takeaways
- Taiwan imports almost all its energy.
- Chip fabs use large amounts of power and water.
- Taiwan's last nuclear reactor shut in May 2025.
- LNG reserves last only about 11 days.
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