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[News] TSMC’s Newly Acquired AP8 Facility in Southern Taiwan Rumored to Start Production in 2H25
In mid-August, TSMC had signed a contract with panel manufacturer Innolux to purchase its plant and facilities located in southern Taiwan, eyeing to further expand its advanced packaging capacity. According to a report by China Times, the fab, designated as the AP8 facility, is expected to start production in the second half of 2025.
More importantly, the fab will not only provide foundry services but also the eagerly needed capacity for advanced 3D Chip on Wafer on Substrate (CoWoS) IC packaging services, the report notes.
The move will be critical for TSMC to meet the surging demand for the advanced packaging capacity for AI servers, according to the report. Its future capacity will reportedly be nine times that of AP6, TSMC’s advanced packaging fab in Zhunan.
Outbidding Micron, TSMC secured the plant with a transaction value of NTD 17.14 billion, which is much lower than the rumored market price of over NTD 20 billion. Citing sources from the supply chain, the report suggests that the main reason TSMC acquired Innolux’s fab was to bypass the time-consuming environmental assessment process.
Unlike the advanced packaging fab in Chiayi, central Taiwan, which has to be started from scratch, the newly-acquired facility only requires internal modifications. Within a year, TSMC can finish the job of equipment installation, and begin the production afterwards.
Sources cited by the report note that orders for related equipment manufacturing are already underway, with deliveries expected starting in April next year. While the process of trial production may take an additional quarter, the AP8 facility is expected to start production in the second half of 2025.
During an investor conference in mid-April, TSMC Chairman C.C. Wei stated that he anticipates the company’s CoWoS capacity to more than double in both 2024 and 2025. He noted later in July that TSMC targets to reach the balance between supply and demand by 2026.
According to analysts cited by the report, TSMC’s CoWoS capacity, though still remains in short supply, could exceed 32,000 wafers per month by the end of this year. With the additional outsourced capacity, the total CoWoS capacity may approach 40,000 wafers per month. By the end of 2025, TSMC’s CoWoS monthly capacity is projected to reach around 70,000 wafers.
Citing remarks by Jun He, TSMC Vice President of Operations and Advanced Packaging Technology and Service, TSMC’s CoWoS capacity is expected to achieve a compound annual growth rate (CAGR) of over 50% from 2022 to 2026. The foundry giant will also accelerate its pace on constructing fabs, shortening the typical 3-to-5-year timeline to within 2 years to meet customer demand.
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(Photo credit: TSMC)
