TAIPEI, June 12 (Reuters) - The head of Taiwan's TSMC

, the world's largest contract chipmaker, said on

Friday that what his company lacks most is talent, while also

worrying about water shortages.

Taiwan produces most of the advanced chips powering the AI

revolution, but the industry has long complained about what

executives call the "five shortages" - water, power, labour,

land and talent.

Speaking at a rain-drenched ceremony for a new science park

in southern Taiwan's Pingtung, TSMC CEO C.C. Wei said he was

happy about the weather.

"Just last month, I was still wondering: What should we do

about water? Should we start using water trucks?" he said in

comments carried live on Taiwan television networks.

Wei said Taiwan President Lai Ching-te, who was present at

the event, had told him of government plans to connect the

island's reservoirs together.

"In that case, in the future I will no longer need to say

that land, water or electricity may be in short supply," Wei

said.

Reservoirs in much drier southern Taiwan generally drop over

the winter, though heavy rain in the past week has helped

replenish them. In 2021, Taiwan imposed widespread water

controls after the worst drought in its history.

"We may face shortages, but what we still lack most is

talent," Wei added, calling on efforts to train more workers and

keep people in largely rural Pingtung.

Lai, speaking after Wei, said the government was close to

completing its plans to link reservoirs.

"Our problem is how to retain water, how to distribute

water, and how to use water efficiently," Lai added.

He also outlined how the government is trying to attract and

retain foreign talent in particular to help the tech industry,

including by easing work permit applications.

While TSMC, a major supplier to Nvidia ( NVDA ), is

investing $165 billion to build factories in the U.S. state of

Arizona, the company has repeatedly said most of its production,

along with research and development, will remain in Taiwan.

Wei said semiconductors have become "inseparable" from

everything, and demand will continue to grow.

"Regarding semiconductors, Taiwan will definitely be the

most important place," he said.