TAIPEI/SINGAPORE (June 27): Taiwan’s industrial sector, including the world’s largest contract chipmaker, will be hit with the island’s first power price increase in four years as the state-owned utility grapples with soaring fuel costs.

About 22,000 large industrial users will pay 15% more for high voltage and ultra-high voltage electricity, the Ministry of Economic Affairs said in a press release. A small number of homes that consume large amounts of electricity will also face a 9% hike on a portion of their usage, the ministry said. The adjustments will take effect July 1.

Taiwan relies on imported coal and natural gas for most of its power, and the price of both fuels has soared this year after Russia’s invasion of Ukraine upended global trade flows. At the same time, electricity use in Taiwan has hit new records in recent days amid hot weather and a strong industrial rebound after the pandemic.

State-owned Taiwan Power Co is expected to pay an extra 300 billion Taiwan dollars (US$10 billion) this year for fuel imports, the ministry said.

The island’s large industrial users include Taiwan Semiconductor Manufacturing Co, the most advanced maker of chips for everything from smartphones to automobiles, which said earlier this month it expects revenue to grow about 30% in 2022.

TSMC’s longterm goal is to use 100% renewable energy, and it “actively implements energy-saving and carbon reduction” measures, spokeswoman Nina Kao said in a text. She added the price hike will not affect the company’s longterm financial goals.

The residential increases will only be applied to power in excess of 1,000 kilowatt-hours a month, meaning about 97% of homes will face no increase, the ministry said. The industrial rate hikes won’t affect cinemas, gyms, department stores or businesses in the agriculture, food and catering sectors.