According to the Taiwan Research Institute, monthly electricity use by the semiconductor industry in the country reached 4.5TWh for the first time in September. This monthly record was reached riding on the unexpectedly high power demand to meet the needs of the AI industry.
The TRI says that the demand for advanced chips, cutting-edge packaging and other components needed in the AI build-out has driven fabs in the country to consume increasing amounts of electricity as they race to manufacture the needed components to address the global demand.
As a result, electricity consumption resumed double-digit growth, rising 11.55% year over year for the semiconductor manufacturing sector alone. An indicator that monitors electricity demand remained flashing red in the month of September, the 18th month in a row that this has been observed.
Robust production within the cutting-edge technology sector has triggered a spike of investment within other industries. This has boosted exports, corporate investment and production. Economic growth has spiked, with the TRI estimating that the country will record 12.6% economic growth for the month of September 2026.
In total, the TRI forecasts that the total amount of electricity used by the semiconductor industry will be in excess of 50TWh by the end of this year. This will be as a result of the expansion of business opportunities linked to AI, such as production of servers, advanced chips, key components and equipment. This spike in economic activity will lift the country’s entire semiconductor supply chain.
In contrast, the country’s textile and chemical materials industries are showing a blue indicator, signifying that those industries are contracting rather than expanding. The textile industry in the country has been battered by weak demand on global markets, causing production and orders to decline. Price competition from other countries has also weighed on the industry.
On the other hand, the chemical materials industry has faced sluggish recovery in demand on global markets at a time when there is overcapacity by producers around the world. This contrasts sharply with the AI industry that seems to have an insatiable appetite for the inputs needed by tech hyperscalers.
The massive amounts of available capital being deployed by tech companies around the world have led to price increases of the needed products due to competition for the limited supplies, and that has massively boosted the revenues and market valuations of key players like Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM). How long this boom can last is the subject of intense debate among industry analysts.
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