[News] Taiwan’s Electricity Prices to Increase in April; Semiconductor Industry Among Top Consumers Facing Largest Hikes

2024-03-11 Semiconductors editor

Taiwan’s residential and industrial electricity prices have long ranked among the lowest globally, but, as per CNA’s report, to stabilize Taiwan Power Company’s finances, electricity price hikes in April are nearly finalized. Among these adjustments, industrial electricity rates will vary based on the specific industry’s consumption patterns.

Under the current plan, residential and general industrial electricity will be categorized into three tiers, each subject to different price adjustments. As for the “super consumers” in the high-voltage category (defined as those with over 5 billion kilowatt-hours consumed annually for two consecutive years), the rate hike could reach up to 30 percent, impacting major consumers in the semiconductor firms like TSMC and Micron.

As per the report from Taiwanese media NowNews, market concerns are mounting over the 24-hour operations of semiconductor fabs. Despite the potential for energy savings through “time-based electricity pricing,” the effectiveness of such measures may be limited. This could significantly escalate operating costs for companies.

Regarding the potential impact of electricity price adjustments on the semiconductor industry, Taiwanese Minister of Economic Affairs Mei-Hua Wang recently stated that even with 24-hour electricity usage, TSMC maintains high energy efficiency. Moreover, semiconductor fabs primarily export their products after manufacturing. Compared to fabs in other countries, Taiwan’s electricity prices are still relatively low.

The definition of high-voltage super consumers entails annual electricity usage exceeding 5 billion kilowatt-hours, with consecutive growth over two years. Different companies will be distinguished within this category. Semiconductor manufacturers, as well as data centers, will be included in the high-voltage super consumer classification.

However, the rate hike of electricity prices for these significant consumers will depend on the subsidy budget allocated by the Executive Yuan. If a subsidy of TWD 100 billion (roughly USD 3.2 billion)  is allocated, the rate hike could exceed 30%. Even with a subsidy of TWD 150 billion (roughly USD 4.8 billion) , the increase would still surpass 20%.

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(Photo credit: TSMC)

Please note that this article cites information from CNANowNews and TechNews.