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.
With an approval rating of just two percent, Peruvian President Dina Boluarte might be the world’s most unpopular leader, according to pollsters. Protests greeted her rise to power 29 months ago, and have marked her entire term — joined by assorted scandals, investigations, controversies and a surge in gang violence. The 63-year-old is the target of a dozen probes, including for her alleged failure to declare gifts of luxury jewels and watches, a scandal inevitably dubbed “Rolexgate.” She is also under the microscope for a two-week undeclared absence for nose surgery — which she insists was medical, not cosmetic — and is
CAUTIOUS RECOVERY: While the manufacturing sector returned to growth amid the US-China trade truce, firms remain wary as uncertainty clouds the outlook, the CIER said The local manufacturing sector returned to expansion last month, as the official purchasing managers’ index (PMI) rose 2.1 points to 51.0, driven by a temporary easing in US-China trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The PMI gauges the health of the manufacturing industry, with readings above 50 indicating expansion and those below 50 signaling contraction. “Firms are not as pessimistic as they were in April, but they remain far from optimistic,” CIER president Lien Hsien-ming (連賢明) said at a news conference. The full impact of US tariff decisions is unlikely to become clear until later this month
GROWING CONCERN: Some senior Trump administration officials opposed the UAE expansion over fears that another TSMC project could jeopardize its US investment Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is evaluating building an advanced production facility in the United Arab Emirates (UAE) and has discussed the possibility with officials in US President Donald Trump’s administration, people familiar with the matter said, in a potentially major bet on the Middle East that would only come to fruition with Washington’s approval. The company has had multiple meetings in the past few months with US Special Envoy to the Middle East Steve Witkoff and officials from MGX, an influential investment vehicle overseen by the UAE president’s brother, the people said. The conversations are a continuation of talks that
CHIP DUTIES: TSMC said it voiced its concerns to Washington about tariffs, telling the US commerce department that it wants ‘fair treatment’ to protect its competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reiterated robust business prospects for this year as strong artificial intelligence (AI) chip demand from Nvidia Corp and other customers would absorb the impacts of US tariffs. “The impact of tariffs would be indirect, as the custom tax is the importers’ responsibility, not the exporters,” TSMC chairman and chief executive officer C.C. Wei (魏哲家) said at the chipmaker’s annual shareholders’ meeting in Hsinchu City. TSMC’s business could be affected if people become reluctant to buy electronics due to inflated prices, Wei said. In addition, the chipmaker has voiced its concern to the US Department of Commerce