TSMC to Establish Two Advanced Packaging Plants in Southwestern Taiwan

"Possibility of Installing Packaging Factories in Japan as Well"

Taiwan's TSMC, the world's largest foundry (semiconductor contract manufacturer), is set to establish two advanced packaging plants in the Taibao area of Zai County in southwestern Taiwan, according to local media including Liberty Times on the 19th.

According to the report, Deputy Premier Cheng Yuan-chan announced this after a meeting on the establishment of the TSMC plants held the previous day at the Zai County government office, attended by Wang Meihua, Minister of Economic Affairs, Wu Cheng-chung, Chairman of the National Science and Technology Council, Su Jen-kang, Director of the Southern Taiwan Science Park Administration, and Zhuang Zishou, Deputy General Manager in charge of TSMC facility operations.

[Image source=Reuters Yonhap News]

Deputy Premier Cheng explained, "The first packaging plant using the advanced manufacturing process called 'Chip on Wafer on Substrate' (CoWoS) will be established in the Zai Science Park," adding, "Construction is expected to start around May and mass production will begin in 2028." He also added, "This plant is expected to create 3,000 to 4,000 jobs in the future." CoWoS is a high-precision technology that stacks chips to increase processing capacity while saving space and reducing power consumption.

Deputy Premier Cheng also emphasized that this project is a strategic move for TSMC's overall industry, representing an important investment combining the development and application of artificial intelligence (AI) chips. An expert analyzed that TSMC's plan is a response to the shortage of GPUs (graphics processing units) and AI chips caused by insufficient TSMC facilities.

Currently, TSMC operates five packaging plants in Taiwan and plans to build a sixth plant in the Tongluo area of Miaoli in the north. Construction of this plant is scheduled to begin at the end of 2024, aiming for mass production in the third quarter of 2027. Recently, foreign media also reported that TSMC is considering establishing CoWoS advanced packaging facilities in Japan.

Yang Rui-lin, Chief Research Officer (CRO) of the Industrial Economics Knowledge Center (IEKC) at Taiwan's Industrial Technology Research Institute (ITRI), commented on this news, saying, "It is possible," and evaluated, "If TSMC's major client Sony requests it and the Japanese government provides substantial support, building a packaging plant in Japan could also be a suitable means to avoid geopolitical risks." However, she noted that it is not yet at a stage of certainty and that TSMC's follow-up projects need to be observed.