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TSMC abandons plan to build advanced fab in Longtan amid protests

10/17/2023 07:11 PM
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A bird's-eye view of the Longtan section of Hsinchu Science Park. Photo taken from Hsinchu Science Park's website
A bird's-eye view of the Longtan section of Hsinchu Science Park. Photo taken from Hsinchu Science Park's website

Taipei, Oct. 17 (CNA) Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, said on Tuesday that it has decided to abandon plans for an advanced wafer fab in the Longtan section of Hsinchu Science Park, amid opposition from residents over land expropriations.

In a statement, TSMC said despite abandoning the Longtan project, the chipmaker will continue to expand its production and upgrade its technologies by assessing every option with the science park's authorities to find a suitable venue to house the sophisticated fab.

In early December 2022, the Hsinchu Science Park Bureau announced the chipmaker will build a wafer fab using the super sophisticated 1nm process in the Longtan section of the park as the bureau completed a pilot project in mid-November for the third expansion phase of the Longtan section, which is located in Taoyuan, to accommodate the new TSMC plant.

However, the Longtan expansion sparked an outcry among residents in Longtan set to be affected by proposed land expropriations.

Earlier this month, a group of Longtan residents staged a protest in front of the Presidential Office, saying the third phase expansion project in Longtan, which aimed to expropriate about 88 percent of the land it would need from private owners, was expected to affect about 3,000 residents in more than 160 households with some of them having lived there for generations.

In addition, the protesters said the expansion plan will also need to relocate more than 200 students in an elementary school that will be torn down.

According to the Hsinchu Science Park Bureau, the Longtan expansion project covers a 158.59-hectare parcel of land to allow semiconductor firms that develop 2nm or more sophisticated technologies, which is expected to create 5,900 jobs and generate NT$600 billion (US$18.63 billion) to NT$650 billion in production value a year.

In a recent post on social media, the Longtan residents opposing the Longtan expansion project said TSMC had expressed a willingness to abandon the planned expansion at a meeting with residents and representatives from the Hsinchu Science Park Bureau.

However, TSMC did not respond to the social media message from the residents until Tuesday, when it made the formal announcement to give up the plan to build a plant in Longtan.

TSMC said in the statement that it was not appropriate for the company to comment on the land expropriation in the Longtan expansion project as it was the government's job to map out the expansion plan. TSMC added the chipmaker respected the residents' opinions and the government's decision in terms of the Longtan project.

According to the Hsinchu Science Park Bureau, several other semiconductors have expressed their willingness to invest in the planned expansion area in the Longtan section by taking account into a large talent pool, a large semiconductor cluster and convenient transportation links in northern Taiwan.

In a hearing held at the Legislative Yuan Tuesday, Economics Minister Wang Mei-hua (王美花) told lawmakers that the government will provide necessary assistance to TSMC for the company's expansion.

Wang said the Ministry of Economic Affairs (MOEA) will continue to help TSMC to seek land for future investments, while the ministry will assist the chipmaker to secure sufficient water and electricity for its plants' operations.

While TSMC has abandoned the plan to build a high-end fab in Longtan, the MOEA said there is no doubt that the chipmaker's most advanced technologies will stay in Taiwan as the semiconductor industry has become the one with critical strategic meanings and the government will lend full support to it.

The MOEA added the ministry will keep close contact with potential Taiwanese investors in the semiconductor industry and help them to expand in Taiwan and create jobs.

TSMC started mass production of the advanced 3nm process in Tainan, southern Taiwan, at the end of last year to become the first contract chipmaker to roll out chips made on the technology. TSMC is developing the more advanced 2nm process, which is slated to begin commercial production in Hsinchu in 2025, and production is also planned in Kaohsiung.

The chipmaker has been keen to pour money into research and development to upgrade its production technologies in a bid to cement the lead over its peer in the global market.

According to the Taipei-based market information advisory firm TrendForce Corp., TSMC held a 56.4 percent share of the world's pure play foundry business in the second quarter of this year.

According to market estimates, Taiwan produces about 90 percent of high-end chips in the world. TSMC founder Morris Chang (張忠謀) has said the company has been coveted by many countries for the sake of sufficient chip supplies.

On the strong urging from the United States, TSMC is building two fabs in the U.S. state of Arizona. In addition, the company is also building a plant in Japan's Kumamoto in the wake of demand from the Japanese government.

In addition, TSMC's board of directors also approved a project in August that involves the company investing up to 3.499 billion euros (US$3.691 billion) as part of a joint venture to build a semiconductor fab in Dresden, Germany with Bosch, Infineon Technologies and NXP Semiconductors as partners.

(By Chang Chien-chung, Liu Chien-ling, Wang Cheng-chung and Frances Huang)

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