Taiwan’s advanced semiconductor manufacturing plants have for the past few months been struggling to keep up with demand, as they are already operating at full capacity — with demand expected to increase further. Amid these bullish expectations, policymakers should think about what they need to do to ensure that the semiconductor industry can continue to grow.
One boost to the industry would be to repurpose the area around the Fourth Nuclear Power Plant — the Longmen plant in New Taipei City’s Gongliao District (貢寮) — as a central hub for semiconductor manufacturing, the “Longmen Science and Technology Park.” There are several good reasons for doing so:
First, the Longmen area has adequate water and electricity. The greatest drawback of Taiwan’s “semiconductor corridor” — which stretches from the Hsinchu Science Park to the Central Taiwan Science Park and on to the Southern Taiwan Science Park in Kaohsiung’s Lujhu District (路竹) — is that it is situated along the leeward side of the Central Mountain Range, where there is dry weather.
Semiconductor manufacturing requires vast amounts of water, but reservoir supplies are often threatened during the dry season.
For example, in the past few years, dry weather has led to low water levels and shortages at Shihmen Reservoir (石門水庫), Baoshan Reservoir (寶山水庫) and Baoshan Second Reservoir (寶二水庫), which supply the Hsinchu park; Mingde Reservoir (明德水庫) and Liyu Lake Reservoir (鯉魚潭水庫), which supply the central Taiwan park; and Zengwen Reservoir (曾文水庫), Wushantou Reservoir (烏山頭水庫) and Nanhua Reservoir (南化水庫), which supply the Lujhu park.
However, the Longmen park would be on the windward side of the Central Mountain Range, where there is copious rainfall. In particular, northeasterly monsoon winds bring the area heavy rainfall when western Taiwan is in the middle of a dry season.
The Longmen area is only 8km from Feitsui Reservoir (翡翠水庫) and its tributaries, which include the Beishi (北勢), Shuangsi (雙溪) and Fulong (福隆) rivers, can provide water all year round.
Second, if several power generators at the Longmen plant were converted from nuclear into natural gas plants, the power could be directed to the fabs in the science park. If the semiconductor industry goes green, the location would be ideal for developing sustainable power generation from seawater or from the Kuroshio current.
Third, one peculiar aspect of the semiconductor industry is its immovability compared with other industries: Once a chip plant is constructed, it must stay in situ for 20 to 30 years. If the government created a semiconductor manufacturing hub, the greatest challenge would be acquiring the land, but in Longmen, the land has been approved for development.
Fourth, Longmen has sufficient land. The Hsinchu park occupies 686 hectares and is home to six major industries. The Longmen plant occupies 486 hectares, which would be enough to accommodate upstream and midstream suppliers to the industry — potentially fostering the world’s largest semiconductor manufacturing zone.
This could include establishing factories for wafer manufacturing, foundry, IC design, and packaging and testing — allowing Taiwan to provide chips for automobiles, mobile phones, communications, networks, biomedicine, 5G, defense and advanced electronic components. Taiwan would become the world’s leading producer of semiconductors.
Fifth, aside from acquiring enough land, another challenge that new businesses encounter is navigating environmental impact assessments. Fortunately, the assessment for the area in Longmen has been approved.
The assessment would only require a small number of amendments to make it suitable for chip manufacturing: Sewage treatment and water acquisition and discharge would need to meet standards established by the science park to satisfy assessment requirements.
Sixth, the transport links to Longmen are excellent. The project to extend the High-Speed Rail from the Nangang (南港) station to Yilan County has been approved — a branch line could be built to reach the park. Longmen is also close to the Port of Keelung, whose wharf would be ideal for delivering raw materials and exporting finished products.
Seventh, there is an abundant work force. Locating a semiconductor hub in northern Taiwan makes sense as expertise and talent are even more plentiful in the north than in central and southern Taiwan.
The experience gained in setting up the Hsinchu park, along with excellent teamwork and hard work, allowed manufacturers to begin setting up at the central Taiwan park in just 11 months. It should be possible to establish a science park at Longmen in even less time. The investment would bear fruit in a couple of years and have the potential of becoming the world’s leading semiconductor hub.
James Lee is a former director of the Hsinchu Science Park.
Translated by Edward Jones
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