Merck Group on Wednesday said it plans to introduce more key semiconductor materials used in cutting-edge semiconductor manufacturing technologies after a new facility in Kaohsiung’s Lujhu District (路竹) starts operations next year, further boosting the company’s product localization rate.
The company has since 2019 increased local sourcing in Taiwan and relocated production from other countries like the US, Europe and some Asian countries in response to customers’ demand and geopolitical risks.
As of the end of July, more than 50 percent of Merck’s semiconductor products were sourced from local suppliers, Merck Group in Taiwan managing director John Lee (李俊隆) told a media briefing in Taipei.
Photo: Lisa Wang, Taipei Times
Among the broad semiconductor material portfolios, specialty gases had the highest localization rate of 66 percent, followed by thin-film products’ 54 percent, Merck data showed.
The company is stepping up product localization to cope with major semiconductor customers’ shifting to more advanced technologies from 7-nanometer to 5-nanometer and even to 1.6-nanometer process nodes, Lee said.
“We plan to introduce novel materials, which will be in production for the first time in Taiwan, and allocate production of some existing materials from neighboring countries when the new plant is completed,” Lee said.
Those new materials are likely to be used in the thin-film deposition process for the advanced technology nodes, Lee said.
Merck also plans to expand the supply of specialty gases for doping, cleaning and etching in particular, he said.
The new plant is a part of Merck’s “Level Up” program for its electronics business, with investment totaling more than 3 billion euros (US$3.33 billion) by next year. Merck has earmarked an investment of NT$17 billion (US$530 million) in Taiwan.
When asked if the locally made semiconductor materials could address the surging demand for artificial intelligence (AI) chips, Merck KGaA executive vice president Suresh Rajaraman said: “As advanced technologies are used for AI, so you can say the investment we are making is to enable AI.”
Producing AI chips with strong computing power and energy efficiency requires more new and complex materials, Rajaraman said.
Merck has used about 25 percent of elements on the periodic table to invent new materials, Rajaraman said.
Any existing non-radioactive element is “in play,” he said.
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