MOEA says Taiwan supply chain resilient amid Gelsinger warning

Taipei, July 20 (CNA) The Ministry of Economic Affairs (MOEA) has defended the resilience of Taiwan's semiconductor supply chain, dismissing concerns raised by former Intel Corp. CEO Pat Gelsinger that a disruption to Taiwan's energy supply could devastate the global economy.

In a statement issued Sunday, the MOEA said Taiwan works closely with global semiconductor partners and that Taiwanese manufacturers have repeatedly ramped up production during previous supply shortages to minimize disruptions to global supply chains.

The statement came after Gelsinger said in a recent interview on the All-In Podcast that a disruption to Taiwan's power supply, if China cuts energy supplies due to its blockade, would have an economic impact even greater than the Great Depression.

"Once a fab shuts down [due to a China-induced blackout], it cannot resume operations for 90 days," Gelsinger said. "If Taiwan's power supply is restricted, the impact on the global economy would be more severe than the Great Depression."

The MOEA said Taiwan plays a pivotal role in the global semiconductor and artificial intelligence supply chain, supported by its well-established industrial infrastructure and highly integrated industrial clusters, enabling it to respond effectively to supply disruptions.

The ministry noted that even after major earthquakes, including the magnitude 7.3 quake that struck central Taiwan on Sept. 21, 1999, and another magnitude 7.3 earthquake that hit Hualien on April 3, 2024, nearly all Taiwanese semiconductor companies remained in operation, although some production lines were temporarily affected.

During the COVID-19 pandemic, which disrupted global logistics, Taiwan also continued to meet international demand for semiconductors, the MOEA said.

The ministry added that Taiwan's information and communications technology (ICT) industry benefits from a comprehensive and closely integrated supply chain, enhancing the resilience of Taiwanese technology companies and ensuring stable supplies to global markets.

On energy security, the MOEA said Taiwan has diversified its sources of oil and natural gas to reduce supply risks amid geopolitical tensions in the Middle East. It added that the government has secured stable energy supplies through a combination of long-term contracts and spot-market purchases.

To demonstrate the reliability of Taiwan's power supply, the ministry said state-run Taiwan Power Co. (Taipower) maintained an operating reserve margin of more than 10 percent on 342 days in 2025.

According to Taipower, an operating reserve margin above 10 percent indicates an adequate electricity supply.

Looking ahead, the MOEA said the government has factored in rising electricity demand driven by the AI boom, forecasting average annual growth in power consumption of 2.5 percent between 2026 and 2035.

The ministry added that Taipower will accelerate efforts to strengthen the resilience of the national power grid network, improving its ability to cope with unexpected incidents, extreme weather and other regional risks.