As we’ve seen recently, the conflict in Iran is putting pressure on the global semiconductor industry due to rising raw material prices. Gallium prices have risen, as have aluminum prices, for that matter. However, the closure of the Strait of Hormuz casts a threatening shadow over Taiwan and TSMC: a disruption in the energy supply!
TSMC and Taiwan under pressure following the closure of the Strait of Hormuz!
Broadly speaking, the Strait of Hormuz is of global strategic importance for the world’s energy supply. If it is closed, Gulf states can no longer export their resources—this applies particularly to oil, gas transported as LNG, and Qatari helium. However, these resources are essential to the semiconductor industry, and Taiwan—as well as TSMC—relies heavily on imports transiting through this strait: approximately 37%, we are told. Furthermore, the island has limited LNG reserves, with a supply that would last only 11 days in the event of a total disruption.
Consequently, this is pushing the Taiwanese government toward a certain… “flexibility” while alternative supply sources must be found. Furthermore, this implies a rise in energy prices, which could in turn affect the final price of components. On the other hand, if prices skyrocket, it is the consumer sector that could suffer, as TSMC could shift its production toward high-margin products such as chips for data centers or theAIsector,in particular.
In short, it must be said that right now, we’re really not getting any help with the supply constraints on memory chips, and with the conflict in Iran driving energy prices up (again), we’re left wondering, “When will this ever end?”
