The TSMC logo is displayed on the outer wall of the company's factory at Hsinchu Science Park in northern Taiwan. [Getty Images]
The TSMC logo is displayed on the outer wall of the company's factory at Hsinchu Science Park in northern Taiwan. [Getty Images]

TSMC, the world's largest contract chipmaker, is pushing to build five additional advanced packaging factories in Taiwan.

Local media outlets including Liberty Times reported Monday, citing sources, that Taiwan's National Science and Technology Council posted an online public consultation Thursday on its website regarding a Phase 2 expansion plan for the Chiayi campus under the Southern Taiwan Science Park Administration.

Sources interpreted the announcement as the effective starting point for a Phase 3 plan for the Chiayi Science Park. The plan will undergo a month-long public comment period and review by the Executive Yuan before moving on to an environmental impact assessment. Under the Phase 3 plan, the site would use 198.65 hectares of farmland owned by state-run Taiwan Sugar Corp., located near the Chiayi Science Park in Taibao City, Chiayi County in southwestern Taiwan. If construction proceeds as planned, the Chiayi Science Park would house a total of 10 advanced packaging factories. The core goal of the Phase 3 plan is to develop the campus into the world's largest advanced packaging hub — an "advanced packaging capital." Once complete, the park is expected to form the world's most comprehensive AI and semiconductor industry corridor alongside the Southern Taiwan Science Park, Central Taiwan Science Park and Hsinchu Science Park in the north.

Another source said TSMC's decision to expand was driven by surging customer demand that supply can no longer keep pace with, and that the company acted to prevent customers from looking elsewhere. Demand from customers including Nvidia, AMD and Apple for TSMC's chip-on-wafer-on-substrate, or CoWoS, advanced packaging technology has grown explosively, with supply falling well short of demand in recent months.

The Phase 3 site is also set to attract companies and research in AI, heterogeneous packaging, silicon photonics, Beyond 5G and 6G ultra-high-speed broadband networks, quantum technology and carbon neutrality. The initiative aligns with Taiwanese President Lai Ching-te's vision of turning Taiwan into an "AI island" while also aiming to promote balanced regional development across the country.

According to the Southern Taiwan Science Park Administration, TSMC's first packaging plant at the Chiayi Science Park, P1, has begun mass production, while P2 has entered the equipment installation phase. Three additional plants — P3 through P5 — are planned for the roughly 90-hectare Phase 2 expansion site, where a groundbreaking ceremony was held in July. TSMC aims to complete P3 through P5 before 2031.

According to Taiwan's Ministry of Economic Affairs, TSMC operates a combined 19 fabs and advanced packaging plants in Taiwan, in addition to its investments in the United States, Germany and Japan. The company is building or planning 13 more fabs and packaging facilities across Hsinchu, Taichung, Chiayi, Tainan and Kaohsiung.

Meanwhile, President Lai last year unveiled an "AI New Ten Builds" initiative, pledging to generate 15 trillion Taiwan dollars in industrial output and create 500,000 AI jobs by 2040. He said at the time that he aimed to build a complete AI ecosystem and establish Taiwan as one of the world's top five computing powers and an "AI island."


kate01@heraldcorp.com