Taiwan Semiconductor Manufacturing Co (TSMC) is set to develop a new facility at the Baipu Industrial Park in Kaohsiung, aiming to accelerate the testing and validation of semiconductor materials and equipment. In collaboration with Taiwan’s Ministry of Economic Affairs and the Kaohsiung City Government, TSMC is spearheading this project, which is poised to enhance validation efficiency by an estimated 25 to 50 percent, according to TSMC Vice President Jun He.

The site, which spans 3 hectares, will house two buildings designed with modular facilities that can be adapted as semiconductor technologies progress. The facility will be equipped with small clean rooms and laboratories dedicated to testing, research, and joint development focusing on advanced packaging technologies, materials, and equipment. Additionally, TSMC aims to use this site to establish a training hub for specialists in advanced packaging, fostering connections between Taiwanese suppliers and the global semiconductor supply chains.

This expansion aligns with the growing demand for advanced packaging, driven largely by the rise of artificial intelligence. TSMC anticipates that its chip-on-wafer-on-substrate advanced packaging capacity will expand at an annual rate exceeding 80 percent through the next year, with robust demand projected to continue through 2029. This development also coincides with a broader expansion in Taiwan’s semiconductor industry, which is expected to generate approximately $300 billion in revenue this year, marking a more than 40 percent increase from the previous year.

According to industry leaders, the surge in AI demand is opening up opportunities across several sectors, including memory, high-bandwidth technologies, advanced packaging, and silicon photonics. However, challenges such as energy supply, the availability of skilled workers, and cybersecurity persist as significant concerns for the industry.