As Taiwan held a referendum over the past weekend on the future of its energy policy, an anonymous TSMC senior official has also expressed concerns toward its long-term implications for TSMC.
In the summer, Taiwan already faced a severe drought that also triggered an energy crisis, threatening TSMC’s production.
TSMC founder Morris Chang has also drawn attention to TSMC’s energy and water constraints on multiple occasions. In fact, it was revealed that TSMC even considered to build its own power plants in 2015 to support its 5nm fabrication process. The plan was called off after Taiwan Power Company, the state-owned utility provider, guaranteed a stable supply.
As Taiwan’s largest industrial consumer of energy, TSMC alone will account for 8% of Taiwan’s power consumption by 2025. Official estimations indicate that TSMC’s 5nm fab consumes approximately 6GW per year, while its 3nm fab under construction will consume 7GW per year.
Lithography equipment a primary cause
The EUV lithography machines used in TSMC’s advanced fabrication processes are one of the main sources of this high power consumption.
At the 2009 EUV Symposium, South Korea’s SK Hynix reported that an EUV machine was rather inefficient to convert electrical power into optical power. Its conversion efficiency rate at 0.02% means that 1MW of input power would be needed to get 200W at intermediate focus for 100 wafers per hour. For an ArF immersion scanner featuring a 193nm wavelength (EUV has a wavelength of 13.5nm), only 165KW is needed to achieve the same output.
♦ Further reading – To lower 3nm process cost, TSMC launches plan to reduce EUV layers
To address the efficiency issue, TSMC already took steps to maximize the conversion efficiency of its EUV machines.
Discovering that the refraction lenses within an EUV machine had been primarily responsible for the energy loss, TSMC proceeded to redesign the refraction structures, therefore boosting the refraction rate by 3%. In total, TSMC claimed that it had boosted the EUV machine’s power efficiency by 5%.
Further expansion in Japan?
Despite the measures, TSMC still faces a potential energy crisis. Latest speculations suggest that TSMC might consider further expansion in Japan, citing the country’s relatively stable power supply. However, Japan also faced its own energy crisis in early 2021 – its worst electricity crunch since the Fukushima accident in 2011.
Still, industry insiders have revealed that TSMC leadership was impressed by the pace of Japanese bureaucracy: it only took two months to get through the Environmental Impact Assessment (EIA) for the new TSMC fab in Kumamoto, contrary to TSMC’s prior expectation of two years. Furthermore, through the assistance of its local partner Sony and Japanese governmental subsidies, TSMC has realized that the cost structure of setting up a fab on Japan is similar to that of Taiwan, paving the way to further opportunities in Japan –
At this stage, Japan’s labor shortage has become TSMC’s main hurdle there. Even though the construction of the new fab can take place sooner than expected, thanks to the passed EIA, the scheduled construction date in 2022 coincides with the construction plans of Micron and Kioxia. A fierce competition for labour is expected. Combined with the impact of Omicron, it remains to be seen how TSMC’s fab construction in Japan will proceed.