Taiwan cuts Taipower subsidy, raising electricity cost concerns

Taiwan has slashed its 2025 budget for Taiwan Power (Taipower) by T$100 billion ($3.1 billion), sparking fears of electricity price hikes that could affect industries, including global semiconductor manufacturers, Bloomberg reported.

The Democratic Progressive Party (DPP), led by President Lai Ching-te, lost its parliamentary majority in 2024, allowing the opposition Kuomintang (KMT) and Taiwan People’s Party to propose significant budget cuts. These include a record T$214.7 billion ($6.55 billion) reduction across various allocations.

Taipower warned the subsidy cut will hamper its ability to maintain power prices and modernize infrastructure. Facing accumulated losses of T$420 billion ($12.8 billion) as of 2024, the utility stated it will present its financial status to the power price review committee. Premier Cho Jung-tai remarked, “We don’t want to pass on the costs either, as it’ll impact people’s livelihood too much.”

The move could challenge Taiwan’s energy security as the island transitions away from nuclear energy. Higher electricity costs may raise operational expenses for energy-intensive industries like semiconductors, potentially impacting some of the world’s largest chipmakers, as noted by Bloomberg.