Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) plans to build two new advanced chip packaging fabs in Chiayi County to address a supply scarcity driven by rapidly growing demand for artificial intelligence (AI) chips, Vice Premier Cheng Wen-tsan (鄭文燦) said yesterday in Chiayi County.
TSMC is set to start construction of the first advanced chip-on-wafer-on-substrate (CoWoS) packaging fab at the Chiayi section of the Southern Taiwan Science Park (南部科學園區) in May, Cheng said in Chiayi County.
Construction is expected to be completed in 2026, creating 3,000 jobs, he added.
Photo: CNA
Cheng made the announcement after meeting yesterday with TSMC vice president for operations and facility Arthur Chuang (莊子壽), Minister of Economic Affairs Wang Mei-hua (王美花) and several Chiayi County Government officials, nailing down the investment project.
TSMC and the Southern Taiwan Science Park earlier this month signed a lease for a 12-hectare plot of land, park director-general Su Chen-kang (蘇振綱) said yesterday.
Chiayi County Commissioner Weng Chang-liang (翁章梁) said the county is well-prepared to house TSMC’s new plants and believes the project would pave the way for attracting investments from companies in the supply chain and help it develop more high-value industries.
Earlier yesterday, Reuters reported that TSMC is considering building CoWoS technology capacity in Japan, where the chipmaker has opened a wafer fab in Kumamoto.
“In response to strong market demand for advanced packaging capacity, TSMC is planning to set up advanced packaging capacity in the Chiayi science park,” TSMC confirmed in e-mailed statement, ending months of speculation.
It did not provide financial details about the new investment.
CoWoS demand is “very strong,” TSMC chief executive C.C. Wei (魏哲家) told investors in January.
The world’s largest contract chipmaker counts Nvidia Corp and Advanced Micro Devices Inc among its major AI chip clients.
TSMC plans to double its CoWoS capacity this year from a year earlier, as booming generative AI applications stimulate demand for AI and high-performance computing chips, it said.
The company has been developing advanced packaging technologies for more than 10 years, including CoWoS, 3D chips and system of integrated chips (SoIC). It expects advanced packaging capacity to enjoy a compound annual growth rate of more than 50 percent in the next few years.
“TSMC’s latest CoWoS capacity expansion is crucial for the world and Taiwan, since 100 percent of the advanced AI chips consumed by the world is produced in Taiwan,” Wang said. “TSMC has received massive orders, but insufficient CoWoS capacity has hindered” shipments.
TSMC’s latest investment would help boost the local semiconductor ecosystem and assist local semiconductor equipment and material suppliers to build a greater presence in semiconductor backend processes, Wang said.
Additional reporting by CNA
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