Taiwan signals openness to nuclear power amid surging AI demand

TAIPEI – Taiwan is “very open” to using new nuclear technology to meet surging demand from chipmakers devouring electricity in the artificial intelligence (AI) boom, according to Premier Cho Jung-tai – one of the strongest signs yet that the government is rethinking its opposition to reactors.

“As long as there is a consensus within Taiwan on nuclear safety and a good direction and guarantees for handling nuclear waste, with this strong consensus, we can have a public discussion,” Mr Cho said in an interview with Bloomberg News.

“We hope that Taiwan can also catch up with global trends and new nuclear technologies,” Mr Cho said on Oct 17, while reiterating his view that “Taiwan will have no issues with power supply for industries before 2030”.

His comments underscore what appears to be a shift by a government that has opposed using nuclear energy for safety reasons.

Public support for using reactors in Taiwan plunged in 2011 when neighbouring

Japan was struck by an earthquake that wrecked the Fukushima plant,

leading to a crisis Tokyo is still sorting out.

The opposition to nuclear power is getting harder to maintain given the incessant demand that the AI boom is placing on chipmakers like Taiwan Semiconductor Manufacturing Co (TSMC).

Taiwan has raised electricity prices twice in 2024, with the latest being a 12.5 per cent increase for industrial users that began earlier in October.

Still, TSMC chief executive C.C. Wei said during a post-earnings call on Oct 17 that the company has been assured by the government it will have enough electricity, water and land to support expansion.

Taiwan is not alone in taking a closer look at nuclear energy to boost power supply.

Microsoft is helping to revive the shuttered Three Mile Island nuclear plant in Pennsylvania by agreeing to buy all the output.

Meanwhile, Alphabet’s Google and Amazon.com are both investing in next-generation nuclear technology.

The Philippines and South Korea have also agreed to conduct a feasibility study on a possible rehabilitation of the South-east Asian nation’s mothballed nuclear plant.

Taiwan’s rethink also comes as China’s military has staged drills that appear to simulate a blockade of the self-ruled island that is home to 23 million people.

Though there are no signs of imminent conflict, the risk of Taiwan being cut off from important energy supplies is one that officials such as Mr Cho must consider.

Underscoring the interest in some day embracing nuclear power, the 65-year-old said he would ask the state-backed power provider to make sure that personnel from the archipelago’s decommissioned reactors stay in their jobs.

Taiwan is set to close its last nuclear reactor in the spring.

“This is because we need to prepare for future nuclear technology developments and to respond to any potential legal changes in Taiwan,” Mr Cho said.

In addition to boosting power demand, surging global investment in AI has also put Taiwan’s chipmakers, especially TSMC, in the spotlight because they make the vast majority of the world’s most advanced semiconductors.

The US, Japan and other governments have in turn sought to lure TSMC to build chip plants on their soil.

The government of Taiwanese President Lai Ching-te, of which Mr Cho is a member, has been fine with TSMC’s overseas expansion.

In the Oct 17 interview, Mr Cho linked that expansion to Taiwan’s efforts to build stronger ties with like-minded democracies to counter China, which claims the island as its territory and has pledged to eventually bring it under Beijing’s control, by force if necessary.

That said, Mr Cho also hopes companies like Nvidia, Infineon Technologies and Advanced Micro Devices will open research and development facilities in Taiwan.

“Taiwan’s economic resiliency comes from the partnership we have with friendly countries,” he said. “We have a strong, vertically integrated supply chain. This is why we believe Taiwan can play an important role in the democratic supply chain.”

Defence

Of course, Taiwan’s efforts to bolster its security go beyond semiconductors.

The government announced plans in August to

lift defence spending to a record in 2025

– the eighth straight year of increases.

The total figure would account for 2.45 per cent of estimated gross domestic product (GDP) in 2025, in line with recent years and greater than the 2 per cent target for Nato countries.

That has not satisfied everyone.

Former US president Donald Trump recently made comments to a columnist for the Washington Post that suggested Taiwan should boost spending on its armed forces to 10 per cent of GDP.

Mr Cho, a former chairman of the ruling Democratic Progressive Party, said in response: “While we cannot allocate 10 per cent of GDP to defence in one go, we have increased the budget compared with the past.” 

He added: “We also hope that through Taiwan’s efforts, the world will recognise Taiwan’s determination and provide greater support.”

In the interview, he reiterated the government’s desire to expand defence ties with the US and other nations, which are looking to reduce their supply chain links to China.

One example he mentioned was that Taiwan recently hosted a number of executives from overseas drone makers.

If successful, the strategy would create more incentive for those governments to come to Taiwan’s aid in an emergency.

“Because Taiwan understands its role in the democratic supply chain and the world’s reliance on Taiwan, I often say that the more Taiwan is needed, the more important it becomes,” Mr Cho said. “We are continuously moving forward on this path.” BLOOMBERG