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.
Taiwan’s foreign exchange reserves fell below the US$600 billion mark at the end of last month, with the central bank reporting a total of US$596.89 billion — a decline of US$8.6 billion from February — ending a three-month streak of increases. The central bank attributed the drop to a combination of factors such as outflows by foreign institutional investors, currency fluctuations and its own market interventions. “The large-scale outflows disrupted the balance of supply and demand in the foreign exchange market, prompting the central bank to intervene repeatedly by selling US dollars to stabilize the local currency,” Department of Foreign
Intel Corp is joining Elon Musk’s long-shot effort to develop semiconductors for Tesla Inc, Space Exploration Technologies Corp and xAI, marking a surprising twist in the chipmaker’s comeback bid. Intel would help the Terafab project “refactor” the technology in a chip factory, the company said on Tuesday in a post on X, Musk’s social media platform. That is a stage in the development process that typically helps make chips more powerful or reliable. The chipmaker’s shares jumped 4.2 percent to US$52.91 in New York trading on Tuesday. The Terafab project is a grand plan by Musk to eventually manufacture his own chips for
Taiwan Power Co (Taipower, 台電) yesterday said it plans to resume operations at two coal-fired power generators for three months to boost security of electricity supply as liquefied natural gas (LNG) supply risks are running high due to the Middle East conflict. The two coal-fired power generators are at Mailiao Power Plant in Yunlin County’s Mailiao Township (麥寮). The plant, operated by Formosa Plastics Group (台塑集團), supplied electricity to Taipower’s power grid until the end of last year. Taipower’s decision came about one month after Minister of Economic Affairs Kung Ming-hsin (龔明鑫) on March 10 said that the nation had no imminent
Some robotaxi passengers were left stranded in the middle of fast-moving traffic in a major Chinese city after their driverless vehicles stopped running, according to police and media reports on Wednesday. A preliminary investigation indicates more than 100 robotaxis came to a halt because of a “system malfunction,” police in the city of Wuhan said in a statement, without elaborating. No injuries were reported. One passenger told Chinese media that their robotaxi stopped after turning a corner. An instruction on a screen read: “Driving system malfunction. Staff are expected to arrive in 5 minutes.” After no one showed up, the passenger pushed
RSS