Taiwan Wants AI Data Centres Next to Its Power Plants After Hormuz

Taiwan makes most of the world's advanced AI chips. It has struggled to host the data centres that run them. The Strait of Hormuz disruption has sharpened that tension. On 23 August 2026, the chairman of Taiwan Power Co (Taipower), Tseng Wen-sheng, said the state utility plans to supply artificial intelligence data centres through dedicated lines running directly from power plants, with operators allowed to manage those lines themselves and with their length, costs and timing set by market mechanisms.

"The most stable way to supply electricity is to locate as close to the power source as possible," Tseng said, according to the Taipei Times. The comments came six months into a crisis that has exposed how much of Taiwan's power depends on gas shipped from the Gulf. Taiwan imports around 96 per cent of its energy, with liquefied natural gas (LNG) accounting for roughly half its power generation, according to a Bloomberg report published by the Taipei Times in May.

Not a single shipment from Qatar had docked at the Yongan terminal in Kaohsiung since early March, when the Strait of Hormuz closed, the report said. The International Energy Agency (IEA) says almost 90 per cent of the LNG exported through the Strait in 2025 went to Asia, accounting for more than a quarter of the region's total LNG imports. In July 2026, Taipower said it would support plans by local governments to set up AI data centre zones near power plants in northern Taiwan, subject to checks on local grids and substations.

Tseng said the outlook for northern supply had improved since 2023, because additional gas-fired units at Datan had come online and the redevelopment of the Concord Power Plant in Keelung had cleared its environmental review. Siting data centres next to Datan, Taiwan's largest gas-fired plant, solves a transmission problem. The crisis has also focused attention on what happens if supply fails. Taiwan's response is a version of what grid operators from Texas to Ireland are doing: asking large loads to locate where power already is, and to pay for the connection.