Taiwan Scrambles to Restore Power After Widespread Blackouts

(Bloomberg) -- Taiwan saw regional blackouts across the island Thursday in the latest sign its creaking electrical grid is struggling to meet rising demands for power from its technology manufacturers.

A failure at the Hsinta coal-fired power plant in Kaohsiung led to a power outage in southern Taiwan Thursday morning. That triggered blackouts in parts of central and northern Taiwan, including the capital Taipei, according to statements from the state-run Taiwan Power Co. The electricity provider said power supply had been restored to more than 4 million households, over 80% of those affected, as of 3 p.m. but local media reported rolling blackouts were still occurring through the south.

While parts of the chip-making hub of Hsinchu were also impacted, the Hsinchu Science Park said its power supply remained normal. A representative for Taiwan Semiconductor Manufacturing Co. said it had not been affected, while ASE Technology Holding Co. said the impact was limited and that power supplies were gradually resuming. United Microelectronics Corp. said its facilities in southern Taiwan were also coming back online.

Steelmaker China Steel Corp. also halted some production at its Kaohsiung factory due to the blackout, Taipei-based Apple Daily reported, citing the company.

“Initial investigation of the power outage shows that it's due to tripping off of equipment, but it also highlights the dilemma and fragility that northern Taiwan needs to rely on the south for power supply,” said cabinet spokesman Lo Ping-cheng.

He added in a separate statement later that the incident was caused by human error and Minister of Economic Affairs Wang Mei-Hua asked for disciplinary action over the power outage.

The resilience of Taiwan's power grid has become an increasing global concern in recent years. Home to TSMC, the world's largest contract chipmaker, Taiwan plays a key role in the world's supply of computer chips, and a few hours without electricity is enough to disrupt global supply chains. A worldwide shortage of semiconductors has heightened concerns, triggering a scramble among major companies, from consumer electronics brands to automakers, to secure scarce supplies.

The government's aggressive push into renewable energy and phaseout of nuclear power coincides with a surge in demand as more manufacturers build plants at home rather than overseas. The latest power-hungry chipmaking equipment used by the likes of TSMC for their cutting-edge semiconductors are also an increasing burden on the grid.

Human Error and Shaky Grid Spark New Global-Chip Supply Concerns

The aging Hsinta plant was at the center of two outages in the space of a matter of days in May last year. Millions of households and nearly half of Taiwan's industrial parks were affected by insufficient supply and rolling blackouts.

The reliability of power was one of the main concerns raised by companies in the American Chamber of Commerce in Taiwan's business climate survey for 2022 released in January. Energy sufficiency was the No. 1 issue the government should be focusing on, ahead of Covid-19 and cross-strait relations, according to members' responses.