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Sep 16
DIGITIMES Insight: Taiwan can power its AI chip boom — but not with green energy
DIGITIMES Intelligence observes that discussions at the semiconductor sustainability and energy forum during SEMICON Taiwan 2026 centered on two questions: whether Taiwan will have enough electricity to support continued semiconductor expansion driven by AI, and whether that electricity will come from renewable sources.

Taiwan is developing an emissions trading scheme (ETS) alongside its carbon fee system, with the Ministry of Environment planning to issue a pilot-plan draft by the end of 2026 and targeting a pilot launch in 2028 to align with international systems. Minister Chi-Ming Peng said the pilot will cover 20 companies and 126 factories, and participation will be voluntary.

Taiwan will launch a pilot emissions trading scheme (ETS) by the end of 2026 to help semiconductor and technology manufacturers align with international systems. Ministry of Environment adviser and former deputy environment minister Wen-Chen Shih said the ETS design must address three key areas.

The EU's Packaging and Packaging Waste Regulation (PPWR, Regulation (EU) 2025/40) has been in force since Aug. 12, 2026, underscoring the rising importance of circular materials as sustainability pressures intensify. Hsu Hsiang-jui, deputy general manager of the Plastic Industry Development Center, said the circular economy is driving five major trends: reduction and recycling, reuse, mechanical recycling, chemical recycling and circular materials.

Slowing EV growth in North America, tariffs, and policy restrictions are pushing automakers and battery suppliers to repurpose idle capacity. At the same time, surging power demand and grid volatility from generative AI data centers are lifting demand for battery energy storage systems (BESS), making energy storage a key diversification market alongside defense, drones, and humanoid robots.

Panasonic Energy, the battery unit of Panasonic Holdings, is betting big on energy storage for AI data centers as demand for backup batteries from AI data centers surges. The company said it will keep energy storage systems (ESS) as a core growth driver and flex investment plans to match market demand.

Australia introduced a liquefied natural gas reserve policy aimed at prioritizing domestic supply, while producers warned the rules could pressure prices if the market becomes oversupplied. The changes, scheduled to take effect on January 1, 2028, were reported by Bloomberg and Reuters as the government moved to secure gas for local buyers in the world's second-largest LNG exporting nation after Qatar.
Electricity demand from AI data centers and other high-tech industries is pushing governments and large cloud service providers to focus more on grid stability and backup supply. In Taiwan, amendments to the Energy Management Act marked the first major overhaul in nearly 10 years and added requirements that could reshape how enterprises plan new plants, expansions, and power infrastructure.
A worldwide nuclear comeback, fueled by artificial intelligence data centers and semiconductor demand, is tightening supply chains and labor markets just as Taiwan considers restarting idle reactors.
The US Commerce Department on September 11 issued final affirmative determinations in its anti-dumping and countervailing duty investigations of crystalline silicon photovoltaic cells and modules from India, Indonesia, and Laos, setting dumping margins of up to 123.04% and subsidy rates as high as 173.70%, according to the department's International Trade Administration.

Shihlin Electric is bullish on continued growth in heavy electrical equipment and energy-related businesses as demand rises for Taiwan Power grid reinforcement, energy transition projects, and AI data center (AIDC) build-outs. The company said its planned T4 plant is scheduled to start production in September 2027, while orders on hand have already topped NT$60 billion (approx. US$1.9 billion) and are extending into 2030.

China's energy storage industry has expanded at breakneck speed since the launch of the 14th Five-Year Plan, growing 50-fold in just five years. The government is now applying the brakes, as local government support has helped spawn large numbers of speculative "energy storage cockroaches"—companies that secure project rights without actually building the projects—causing planned capacity on paper to soar while actual construction lags far behind.