JF

Because silicon chips have become ubiquitous in all sorts of products, like cars, a chip shortage presents a hard supply constraint that could raise prices of goods that use chips, causing inflation globally at a particularly sensitive time for many recovering economies.

Some may present the drought as an alleged example of the global perils associated with climate change while others may point to it as further evidence for the need to on-shore crucial supply chains in the context of superpower competition. To me it is fascinating that Taiwan...

, a small nation diplomatically unrecognized by most states, was able to gain high-tech manufacturing supremacy re the chip-making industry. I wonder how exactly this arrangement came into being. How were the US and PRC involved?

In any case, Taiwan's dominance in silicon probably serves it well over the long term re geopolitics and the economy, making its safety and stability imperative to maintain for stronger powers, and leading China and the US to compete for access or power over its tech.

In the short term Taiwan is in dire straits. The US, Japan, Europe & South Korea etc. are pushing it to not cut back water supply to chip making factories to ensure the success off their own auto companies & stave off inflation.

But the water shortage is currently so severe in Taiwan, with reservoirs around or below 10% capacity & the summer monsoon still absent, that the state's water authority has had no choice but to decrease the amount of water factories and municipalities receive.

The monsoon should have arrived in the country's south a couple of weeks ago, bringing rain, but hasn't and doesn't yet seem imminent. The government is trying to procure more water by drilling wells and building desalination capacity, but neither is an adequate or fast solution.

If things continue as they are, what were only moderate cuts in water supply to the chip making (and other) factories will have to be made increasingly severe, exacerbating global fears, and potentially harming Taiwan's strategic & economic position. The alternative would be to