An explosion and fire caused by a liquefied natural gas (LNG) leak broke out at the Hsingda Power Plant in Kaohsiung, one of the largest plants in southern Taiwan, prompting Taiwan Power Co. (TPC) to issue a 10-day emergency alert for a "power system contingency operation notice." As a result, concerns are mounting over potential disruptions to power supply at the Southern Taiwan Science Park, where Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, is located.
According to Taiwan media including China Times on the 11th, the fire occurred around 8 p.m. on the 9th during a trial run of the new Unit 2 at the Hsingda Power Plant. The plant is a large facility that accounts for about 10% of Taiwan's total power generation, and the accident has pushed the reserve margin below 6%, raising fears of an emergency.
To secure a reserve margin, TPC is taking emergency measures such as restarting Unit 5 at the Dalin Power Plant, which retired in 2022, and mobilizing diesel generators at the second and third nuclear power plants whose commercial generation has been completed. However, tensions are rising over the potential impact on local industry as the aging grid intersects with surging power demand from artificial intelligence (AI) and the semiconductor sector.
Taiwan is pursuing a policy of gradually reducing the share of nuclear power and expanding renewable energy. But concerns over the stability of power supply following the recent full shutdown of nuclear plants continue to be raised, and controversy persists, with a recent referendum showing a majority in favor of restarting some reactors.
The power plant fire and production crisis could directly affect advanced semiconductor manufacturing, the core of Taiwan's industrial competitiveness, heightening concerns in both regional and global markets.