TSMC to Build Five More Packaging Plants at Chiayi Science Park

CoWoS Demand From Global Chip Buyers

Surging orders for chip-on-wafer-on-substrate packaging from Nvidia, Advanced Micro Devices and Apple serve as the primary commercial engine behind the Chiayi project. Advanced packaging binds multiple silicon dies onto a single substrate, giving AI accelerators and mobile processors the memory bandwidth required for high-density computing workloads without relying solely on smaller nanometer lithography.

For hardware manufacturers and consumer electronics brands, packaging bottlenecks have dictated device delivery schedules for more than two years. Concentrating 10 packaging plants in Chiayi addresses that supply constraint directly, giving key enterprise and consumer hardware clients guaranteed assembly allocations through the end of the decade. The concentration of advanced packaging on the island also raises the operational stakes for global electronics supply chains, which remain heavily dependent on Taiwan’s local power grid, water supplies and regional transport networks.

Taiwan Infrastructure and Regional Competition

While TSMC expands fabrication operations overseas in the United States, Japan and Germany, its most advanced packaging processes remain anchored in Taiwan. Packaging clusters require tight proximity to the leading-edge wafer fabs that produce raw silicon slices, making domestic expansion far more cost-effective than duplicating complex multi-die assembly networks abroad.

Competitors such as Intel and Samsung continue to build out proprietary advanced packaging services to win third-party foundry clients. TSMC’s accelerated buildout in Chiayi prevents rivals from capturing unmet packaging demand from top-tier chip designers who cannot secure sufficient domestic capacity elsewhere.

What Comes Next in the Planning Process

Capital spending supports the speed of the expansion. In July, TSMC lifted its full-year capital expenditure forecast to a band between US$60 billion and US$64 billion, up from an earlier estimate of US$52 billion to US$56 billion announced in April. The Ministry of Economic Affairs reports that TSMC operates 19 advanced wafer fabs and packaging plants across Taiwan, with 13 additional facilities under construction in Hsinchu, Taichung, Chiayi, Tainan and Kaohsiung.

Following the conclusion of the public comment window for the Chiayi expansion, the National Science and Technology Council will complete a formal feasibility study for submission to the Executive Yuan. Once the central government approves the plan, the project will advance to statutory urban planning reviews and environmental impact assessments before Phase III construction contracts are awarded.