[News] TSMC Boosts Investment in Advanced Packaging with NTD 500 Billion Plan to Build Six Plants in Chiayi Science Park

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The Executive Yuan and TSMC have reportedly reached a consensus on the investment project for the new advanced packaging plant at the TSMC Science Park in Chiayi. According to a report from Economic Daily News, six new plant sites will be allocated to TSMC in the Science Park, two more than originally anticipated, with a total investment exceeding NTD 500 billion. The expansion is expected to increase CoWoS advanced packaging capacity and to be announced to the public in early April.

TSMC has refrained from commenting on the matter. Regarding the news, the Executive Yuan actively coordinated with TSMC for the establishment of the advanced packaging plant in the Chiayi Science Park located in Taibao. The related environmental assessments and water and electricity facilities have been processed, with construction expected to commence in April, indirectly confirming the rumors.

As per sources cited by the report, Chiayi Science Park is poised to become a new hub for TSMC’s advanced packaging capacity. Among the six new scheduled plants, construction will begin on two this year, aligning with the Executive Yuan’s statement of construction commencement in April.

TSMC’s extensive expansion is primarily driven by the high demand for advanced packaging. For instance,  in the case of the NVIDIA H100, after integrating components via CoWoS, each wafer yields approximately 28 chips. However, for the upcoming B100, with increased volume and integration, the yield per wafer drops to just 16 chips.

On the other hand, TSMC’s advanced processes, per a previous report from Commercial Times, remained fully utilized, with capacity utilization exceeding 90% in February, driven by sustained AI demand. The same report also noted that NVIDIA’s orders to TSMC are robust, pushing TSMC’s 3 and 4-nanometer production capacity to nearly full utilization.

As each new generation of NVIDIA’s AI chips integrates CoWoS, chip output is halved, yet demand for AI servers continues to soar. With terminal demand skyrocketing while chip output dwindles, there’s a “cliff-like gap” in CoWoS advanced packaging capacity. TSMC must ramp up CoWoS production swiftly to ensure uninterrupted customer supply.

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(Photo credit: TSMC)