Taiwan Expands Chip Manufacturing with $16.5B TSMC Investment

TLDRs:

• TSMC will invest $16.5 billion in a new Taichung chip fab, targeting production in 2028.
• The 1.4-nanometer plant is expected to create 4,500 jobs in central Taiwan.
• Taiwan’s semiconductor sector grows rapidly, with record revenue projected for 2025.
• Advanced chip production expands amid surging AI and high-performance computing demand.

Taiwan Semiconductor Manufacturing Co. (TSMC) is set to begin construction on a $16.5 billion, state-of-the-art 1.4-nanometer chip fab in Taichung next quarter, according to Taiwan’s Central Taiwan Science Park Bureau.

The facility, expected to commence production by 2028, will mark one of the most advanced semiconductor manufacturing projects globally.

Central Taiwan Science Park Bureau Director-General Hsu Maw-shin confirmed the project remains fully on schedule despite speculation of delays.

The facility, known as Fab 25, represents a significant step forward in the company’s roadmap for high-performance chip production.

Job Creation and Economic Impact

The Taichung fab is projected to generate around 4,500 new jobs, offering a boost to the local economy. Production value is estimated at NT$500 billion (approximately US$16.5 billion), surpassing earlier forecasts.

This aligns with TSMC’s strategy to expand its production of cutting-edge chips to meet increasing global demand, particularly from artificial intelligence (AI) and high-performance computing sectors.

TSMC’s expansion plan extends beyond Taichung. In Hsinchu and Kaohsiung, the company aims to start volume production of 2-nanometer chips next quarter, while 1.6-nanometer chips are scheduled for the second half of next year in Kaohsiung. In Tainan’s Shalun District, TSMC is building another advanced technology facility, further reinforcing Taiwan’s semiconductor manufacturing capabilities.

Semiconductor Industry Drives Growth

Taiwan’s semiconductor sector continues to thrive. According to National Science and Technology Council Minister Wu Cheng-wen, companies in the nation’s three major science parks are expected to generate record revenue of NT$5.5 trillion in 2025, representing a 15.5 percent increase from last year.

Semiconductor firms dominate the growth, contributing 83 percent of total revenue during the first half of the year.

This surge underscores the global importance of Taiwan in the semiconductor supply chain. While computer and peripheral manufacturers experienced a decline in revenue due to production shifts overseas and geopolitical tensions, chipmakers like TSMC have benefited from strong demand for advanced computing technologies.

Advanced Technology Fuels Future Growth

TSMC’s focus on ultra-advanced process technologies, moving beyond the previously planned 2-nanometer process, positions Taiwan at the forefront of semiconductor innovation. Industry leaders emphasized that the company is even attempting to accelerate construction timelines to meet global demand.

Southern Taiwan Science Park Bureau Director-General Cheng Hsiu-jung highlighted ongoing capacity expansions for advanced packaging technology in Chiayi County’s Taibao City. She stressed that all projects are progressing smoothly, dispelling media rumors of sudden halts.

As global reliance on AI, data centers, and high-performance computing continues to expand, Taiwan’s investment in advanced chip manufacturing solidifies its role as a key driver of technological progress. With TSMC leading the charge, the nation is set to remain a critical hub in the semiconductor ecosystem.

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