Powerchip Semiconductor Manufacturing Corp (力積電) yesterday held a groundbreaking ceremony for a NT$278 billion (US$9.72 billion) fab in Miaoli County, to raise capacity as it is struggling to keep up with demand for its chips.
Chip shortages earlier this year suspended operations at some vehicle factories and forced some smartphone makers to phase out lower-end models ahead of schedule.
“All our product lines are fully utilized. We expect that the situation will last through the end of next year at least. So we have to build a new fab,” Powerchip chairman Frank Huang (黃崇仁) said on the sidelines of the ceremony.
Photo: Bloomberg
The severe shortage has led to an increase in chip prices of 30 to 40 percent since the end of last year, Huang said, adding that he expects that prices would increase further, with a new wave of hikes as early as next month.
“I have been working in the semiconductor industry for a long time, but I have never seen any structural shortage like this before,” he said.
The supply-demand disparity comes as almost no investment has over the past few years been made by the world’s major chipmakers in certain high-demand segments, Huang said.
While major chipmakers have invested in advanced technologies, such as 3-nanometer technology developed by Taiwan Semiconductor Manufacturing Co (台積電), they did not invest in less advanced technologies, which are also used in electric vehicles, Internet-of-Things equipment and 5G devices, he said.
Powerchip’s new fab in the Tongluo Science Park (銅鑼科學園區) would from 2023 make chips with 45-nanometer and 50-nanometer technologies, Huang said.
Management ICs, touch sensors, vehicle chips and driver ICs for flat panels would be made at the new fab, he said.
In its first phase, the fab would produce 25,000 12-inch wafers per month, before capacity would be raised to 100,000 wafers per month, Powerchip said.
The fab would create 3,000 new jobs and, when fully utilized, generate NT$60 billion in production value, it said.
Huang said that Taiwan offers the most competitive environment for semiconductor firms, with production costs lower than in other countries, including China.
“For decades, Taiwan has been a trusted manufacturer of semiconductors,” American Institute in Taiwan Director Brent Christensen said at the ceremony.
President Tsai Ing-wen (蔡英文) has identified the semiconductor industry as a strategic priority, not only for economic innovation, but also for national security, Christensen said, adding that the US government agrees with that view.
Last month, as one of his first executive orders, US President Joe Biden launched a review process of supply chains for critical and essential goods to make them more resilient and safe, Christensen said.
Building resilience for the US means increasing domestic production of certain equipment, he said.
However, that would also entail closer cooperation with trusted partners that share the same values as the US, Christensen said, adding that this would ensure that supply chain access cannot be leveraged against the US.
To forge stronger economic ties with Taiwan, as well as ties in fields of cooperation, the two nations last year launched the US-Taiwan Economic Prosperity Partnership Dialogue, Christensen said.
The dialogue is part of a broader coalition to counter China’s unfair economic and investment policies, he said.
Christensen also encouraged investment from Taiwanese semiconductors companies across the entire value chain — design, foundries, assembly and supply.
WALKING AWAY: At one point the world’s No. 3 smartphone brand, LG has fallen from a position as a market leader after a series of software and hardware mishaps South Korea’s LG Electronics Inc is to wind down its loss-making mobile division after failing to find a buyer, a move that would make it the first major smartphone brand to completely withdraw from the market. Its decision to pull out will leave its 10 percent share in North America, where it is the No. 3 brand, to be gobbled up by Samsung Electronics Co and Apple Inc with its domestic rival expected to have the edge. “In the United States, LG has targeted mid-priced — if not ultra-low — models and that means Samsung, which has more mid-priced product lines than
SHORTAGE: The city government said it would install water purification machines to provide drinking water to residents and would close all public swimming pools Officials, residents and businesses in Taichung have been gearing up for water cuts that are to take effect tomorrow as Taiwan deals with a water shortage. The water supply to large parts of Taichung as well as parts of Miaoli, Changhua and Hsinchu counties is to be cut on a rotational basis for two days a week, affecting an estimated 1 million customers, the Water Resources Agency said. It is the most stringent water rationing measure introduced in central Taiwan in nearly 50 years, Taiwan Water Corp (台灣自來水) official Lin Yi-hsiung (林義雄) said. The Taichung City Government said in a statement that
SPECULATION: The integrated house and land transaction income tax has been amended as the real-estate market heats up because of high liquidity and low interest rates Lawmakers across party lines yesterday agreed to July 1 as the provisional date on which a draft amendment to the Income Tax Act (所得稅法) is to come into effect, with the aim of curbing real-estate speculation. The consensus was reached following interparty negotiations at the legislature’s Finance Committee to determine when revisions to the “integrated house and land transaction income tax” would take effect. The committee on Monday last week passed a number of revisions to the act, but failed to agree on when they would take effect. Under the proposed revisions, the tax would be set at 45 percent
TAICHUNG PLANT: An official said that generator No. 3 had been retrofitted and it generates 0.46g of particulate pollution per kilowatt-hour, down from 0.6g to 0.7g A spike in demand for electricity made it necessary to restart the third coal-fired generator at the Taichung Power Plant, Taiwan Power Co (Taipower, 台電) said yesterday as a feud with the Taichung City Government lingers. Taichung Mayor Lu Shiow-yen (盧秀燕) has sought to keep the generator from being used. In 2019, he revoked Taipower’s license to operate the generator. However, the state-run utility has taken the city government to court over the license revocation and won the case in February last year, Taipower manager Chang Ting-shu (張廷抒) said. “We would like to remind the Taichung City Government that operation of the third