Bullets:
Taiwan Semiconductor Manufacturer Corporation is the exclusive supplier of Nvidia’s highest-end CPU’s, and chipsets for Apple’s iPhone.
TSMC also manufacturers 90% of the world’s advanced chips for AI.
But Taiwan is facing a severe energy crunch. It is 97% dependent on foreign sources of energy. Liquefied Natural Gas powers most of its electricity generation, and its Middle East supplies are badly damaged and cut off.
The island has a stockpile of LNG of just 11 days, and officials there are scrambling to secure more supplies on global markets, at the same time everyone else is doing the same.
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Report:
Good morning.
Taiwan Semiconductor Manufacturing Corporation is the sole manufacturer of the highest-end CPU’s for Nvidia. Even before the war against Iran, TSMC was struggling to keep up with demand, and that prompted Nvidia to look for alternative foundries.
Besides Nvidia, TSMC is the sole chipmaker for the iPhone, and 90% of the world’s most advanced chips used in Artificial Intelligence. Silicon Valley has budgeted $650 billion in AI spending and data centers this year, and so lots of people are very motivated to finally wonder where TSMC’s electricity comes from.
Taiwan is highly dependent on LNG for electricity, and for some reason nobody on Taiwan thought that was important enough to have a big stockpile of it. The total LNG reserve is 11 days, plus what energy analysts figure may be another few weeks’ worth of supply on ships on the way right now.
In the opening days of the war, Taiwan was doing “emergency coordination and adjustments”, which they say was sufficient to get them through the month of March.
Overall, Taiwan’s dependency on foreign suppliers for energy is 97%, and 37% of its LNG comes from the Middle East. And unless those ships heading their way are already on the water and have cleared the Gulf of Hormuz, there’s no more coming: Qatar is over a third of Taiwan’s supply. Last week drone and missile attacks took out LNG refineries in Qatar, and destroyed $20 billion per year of LNG supplies going to Europe and Asia. If the war ended today, and repairs begin tomorrow, thirteen million tons of LNG are offline for up to five years.
Energy companies declared Force Majeure to get out of any supply contracts involving Qatari LNG, and everyone on earth who needs natural gas is scrambling around to find more. Europe is similarly dependent on natural gas from the Middle East, and their energy ministers are making phone calls to the anyone who might have some, and will pay any price.
That straight line, from 52 euro to 70—that was one day, last Thursday. Taiwan believes they have “secured” LNG for March and April, and about half of what they will need for May, and are looking for suppliers for the rest of May and then June.
That is summer. And if you’ve ever been in South China in the summertime, the only thing on your mind is getting to a place where the AC is on. Electricity demand on Taiwan will soon go from 23 terawatt hours a month–which is now-- to over 25 terawatts, where it will stay through October.
Nvidia again. Prices are skyrocketing for the raw materials that feed the plants that make electricity, assuming they can be gotten at all. Governments in Asia and Europe are making decisions, right now, how to ration fuel and energy, and if the decision is whether Taiwan will have air conditioning this summer, or Nvidia gets more Blackwell chips, I think I already know the answer.
Be Good.
Resources and links:
Iran War Chokepoints Begin to Cast Doubt on Global Chip Supply
https://www.bloomberg.com/news/articles/2026-03-16/iran-war-chokepoints-begin-to-cast-doubt-on-global-chip-supply
Taiwan Hunting for Alternative LNG Supplies After Qatar Shutdown
https://www.bloomberg.com/news/articles/2026-03-03/taiwan-hunting-for-alternative-lng-supplies-after-qatar-shutdown
The Iran war tests Taiwan’s energy resilience
https://www.atlanticcouncil.org/blogs/energysource/the-iran-war-tests-taiwans-energy-resilience/
Exclusive: Iran attacks wipe out 17% of Qatar’s LNG capacity for up to five years, QatarEnergy CEO says
https://www.reuters.com/business/energy/iran-attack-damage-wipes-out-17-qatars-lng-capacity-three-five-years-qatarenergy-2026-03-19/
Fuel rations and no air con: south-east Asian nations race to conserve energy
https://www.theguardian.com/world/2026/mar/18/south-east-asia-nations-conserve-energy-oil-soaring-costs
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