Taiwan’s dominance in the global electronics and semiconductor industry is facing a growing challenge: the energy demands of its manufacturing sector and the associated public health consequences. The island nation, a critical link in the supply chain for everything from smartphones to artificial intelligence infrastructure, relies heavily on fossil fuels to power its factories. A new study by the Centre for Research on Energy and Clean Air (CREA) highlights the significant air quality impacts of this energy mix, projecting potentially dozens of premature deaths and hundreds of cases of childhood asthma linked to pollution from the electronics manufacturing industry by 2030.
The scale of Taiwan’s role in global tech is immense. According to a 2025 report by TrendForce, four of the world’s top ten wafer foundries are Taiwanese companies, collectively controlling over 70% of the global market. Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest dedicated independent semiconductor foundry, and United Microelectronics Corporation (UMC) are at the forefront. This position is only strengthening as demand surges for the hardware underpinning the rapid expansion of artificial intelligence. But this growth comes at a cost. The production of these advanced semiconductors and server units is extraordinarily electricity-intensive, placing considerable strain on Taiwan’s power grid.
The Fossil Fuel Reliance and its Health Costs
In 2023, Taiwan Power Company (Taipower), the state-owned utility, generated 34% of its electricity from coal and 44% from natural gas. Renewable energy sources accounted for a relatively small portion of the mix. While the government has set ambitious Energy Transition Goals aiming to reduce coal’s share to 20% and increase natural gas to 50% by 2030, renewables are projected to reach only around 30% of the electricity supply. This continued reliance on fossil fuels poses a direct threat to public health.
The CREA study assessed the potential air quality impacts of Taiwan’s electronics manufacturing industry’s electricity demand under various energy scenarios. The findings are stark. Under a “current-mix” scenario – assuming renewable energy procurement remains at 2023 levels – the study estimates that air pollution linked to the industry could result in 90 premature deaths by 2030. 277 children are projected to suffer from asthma, and nearly 19,000 work absences could be attributed to pollution-related illness. The economic damage is estimated at almost USD 500 million.
These impacts are not evenly distributed. The study identifies several highly industrialized and urbanized counties as particularly vulnerable, including Kaohsiung (USD 114 million in health-related economic damages), New Taipei (USD 64 million), Taichung (USD 52 million), Taoyuan (USD 48 million), and Tainan (USD 47 million). These figures represent the estimated costs associated with healthcare, lost productivity, and other health-related expenses.
Renewable Energy Targets Offer a Path to Improvement
The CREA analysis isn’t solely focused on outlining the risks. It too demonstrates the significant benefits of accelerating the transition to renewable energy. Three major Taiwanese semiconductor companies – TSMC, Micron, and UMC – have already established renewable energy procurement targets or made purchases for 2030. If these targets are aggressively pursued, the study estimates that approximately 41 lives could be saved annually, with USD 229 million in associated economic benefits.
Figure 2 – Health and economic impacts of electricity supply scenarios for the EM industry in 2030
TSMC, with the most ambitious renewable electricity target of 60% for 2030, is projected to account for nearly USD 169 million in avoided health damages alone. This underscores the potential for individual companies to drive significant positive change.
Figure 4 – Economic impacts of the EM industry in 2030; under three different renewable energy scenarios.
Policy Recommendations and Protecting Vulnerable Populations
The CREA report outlines several key policy recommendations. Accelerating existing renewable energy targets to achieve 100% renewable energy by 2030 is paramount. This requires a transparent roadmap and consistent year-over-year increases in renewable energy usage. Investing in local renewable energy sources and energy storage solutions is also crucial, not only to reduce pollution but also to ensure a stable and resilient power supply for the growing AI and electronics manufacturing sectors.
The report also emphasizes the need to protect vulnerable populations, particularly children. Children are disproportionately affected by air pollution, experiencing higher rates of asthma and other respiratory illnesses. Policies aimed at reducing nitrogen dioxide (NO₂) emissions and investing in cleaner air should be framed as a matter of children’s rights and public health.
As Taiwan continues to solidify its position as a global technology leader, the choices it makes regarding its energy future will have far-reaching consequences. The transition to clean energy isn’t just an environmental imperative; it’s a public health necessity. The next key milestone will be the review of Taiwan’s energy transition targets, scheduled for later this year, where policymakers will have an opportunity to strengthen commitments and accelerate the shift towards a sustainable future.
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