Taiwan IC suppliers to invest US$210 billion over 5 years: NDC head

Taipei, Nov. 25 (CNA) Taiwan's semiconductor suppliers are expected to invest US$210 billion over the next five years to cement the country's lead over its peers in the global IC market, according to National Development Council (NDC) Minister Kung Ming-hsin (龔明鑫).

At an investment forum on business startups on Friday, Kung said digital transformation in the high-tech sector had become an irreversible international trend, adding that the semiconductor industry along with 5G and artificial intelligence development was expected to serve as the core of the technology upgrade.

Kung said the government would continue to encourage the local semiconductor industry to invest by providing incentives under the Statute for Industrial Innovation.

In addition, Kung said, a restructuring of global supply chains amid escalating trade frictions between the United States and China is expected to lead Taiwanese semiconductor suppliers to move their investments out of the China market.

"It is estimated that the local semiconductor industry will invest US$210 billion globally over the next five years to lay a good foundation for future development," Kung said.

Citing Mark Liu (劉德音), chairman of the world's largest contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), Kung said that the global semiconductor industry would see a golden era over the next one to two decades.

TSMC is investing US$40 billion to build two advanced wafer fabs in the U.S. state of Arizona: one is expected to start commercial production in 2025, and the other is slated to mass produce chips in 2026.

TSMC is also spending 37.8 billion Japanese yen (US$1.60 billion) to build a fab in Japan's Kumamoto through a joint venture, which is scheduled to mass produce chips in 2024, according to the chipmaker.

Meanwhile, the chipmaker's board has approved a plan to form a joint venture to set up a wafer fab in Dresden, Germany.

According to TSMC, it will invest up to 3.499 billion euros (US$3.8167 billion) for a 70 percent stake in the new company, with mass production scheduled to start at the end of 2027.

TSMC's global expansion has prompted its suppliers to follow suit, including Marketech International Corp., a facility monitor control system provider, which said it already has a team in the U.S. and is planning to expand its presence there because of TSMC's project in Arizona.

In addition, automated equipment supplier Mirle Automation Corp. said it wanted to stay geographically close to TSMC to be able to provide it with timely services, while IC packaging and testing services provider ASE Technology Holding Co. is studying possible investments in the U.S. market.

Meanwhile, Taiwan-based GlobalWafers Co., the world's third-largest silicon wafer maker, has begun construction of a 12-inch silicon wafer plant in Texas in late 2022 by investing US$5 billion, with the aim of beginning mass production in 2024.

While more and more Taiwanese semiconductor suppliers are going overseas, Kung said Taiwan companies are expected to develop sophisticated 3 nanometer process or more advanced technologies at home as the official aimed to quell growing concerns that an increase in overseas investments will empty Taiwan's IC industry.

As for mature processes, Kung said Taiwanese semiconductor IC suppliers will take into account the needs of their clients by relocating resources to other countries such as Japan, Singapore and Malaysia as more and more countries have agreed semiconductors have become strategic materials to national security.

"Global expansion by the local semiconductor industry is expected to strengthen its power but 90 percent of Taiwan IC suppliers' production will stay in Taiwan," Kung said.

Kung said the changes in the global supply chains are expected to show the critical status of Taiwan's semiconductor industry in the world and test its resilience.

To tackle rapidly changing global economic conditions, Kung said that the government would continue to attract local and foreign investors to Taiwan and forge closer international cooperation in a bid to push for local growth.