Powerchip Semiconductor Manufacturing Corp (力積電) yesterday held a groundbreaking ceremony for a NT$278 billion (US$9.72 billion) fab in Miaoli County, to raise capacity as it is struggling to keep up with demand for its chips.
Chip shortages earlier this year suspended operations at some vehicle factories and forced some smartphone makers to phase out lower-end models ahead of schedule.
“All our product lines are fully utilized. We expect that the situation will last through the end of next year at least. So we have to build a new fab,” Powerchip chairman Frank Huang (黃崇仁) said on the sidelines of the ceremony.
Photo: Bloomberg
The severe shortage has led to an increase in chip prices of 30 to 40 percent since the end of last year, Huang said, adding that he expects that prices would increase further, with a new wave of hikes as early as next month.
“I have been working in the semiconductor industry for a long time, but I have never seen any structural shortage like this before,” he said.
The supply-demand disparity comes as almost no investment has over the past few years been made by the world’s major chipmakers in certain high-demand segments, Huang said.
While major chipmakers have invested in advanced technologies, such as 3-nanometer technology developed by Taiwan Semiconductor Manufacturing Co (台積電), they did not invest in less advanced technologies, which are also used in electric vehicles, Internet-of-Things equipment and 5G devices, he said.
Powerchip’s new fab in the Tongluo Science Park (銅鑼科學園區) would from 2023 make chips with 45-nanometer and 50-nanometer technologies, Huang said.
Management ICs, touch sensors, vehicle chips and driver ICs for flat panels would be made at the new fab, he said.
In its first phase, the fab would produce 25,000 12-inch wafers per month, before capacity would be raised to 100,000 wafers per month, Powerchip said.
The fab would create 3,000 new jobs and, when fully utilized, generate NT$60 billion in production value, it said.
Huang said that Taiwan offers the most competitive environment for semiconductor firms, with production costs lower than in other countries, including China.
“For decades, Taiwan has been a trusted manufacturer of semiconductors,” American Institute in Taiwan Director Brent Christensen said at the ceremony.
President Tsai Ing-wen (蔡英文) has identified the semiconductor industry as a strategic priority, not only for economic innovation, but also for national security, Christensen said, adding that the US government agrees with that view.
Last month, as one of his first executive orders, US President Joe Biden launched a review process of supply chains for critical and essential goods to make them more resilient and safe, Christensen said.
Building resilience for the US means increasing domestic production of certain equipment, he said.
However, that would also entail closer cooperation with trusted partners that share the same values as the US, Christensen said, adding that this would ensure that supply chain access cannot be leveraged against the US.
To forge stronger economic ties with Taiwan, as well as ties in fields of cooperation, the two nations last year launched the US-Taiwan Economic Prosperity Partnership Dialogue, Christensen said.
The dialogue is part of a broader coalition to counter China’s unfair economic and investment policies, he said.
Christensen also encouraged investment from Taiwanese semiconductors companies across the entire value chain — design, foundries, assembly and supply.
Merida Industry Co (美利達) has seen signs of recovery in the US and European markets this year, as customers are gradually depleting their inventories, the bicycle maker told shareholders yesterday. Given robust growth in new orders at its Taiwanese factory, coupled with its subsidiaries’ improving performance, Merida said it remains confident about the bicycle market’s prospects and expects steady growth in its core business this year. CAUTION ON CHINA However, the company must handle the Chinese market with great caution, as sales of road bikes there have declined significantly, affecting its revenue and profitability, Merida said in a statement, adding that it would
MARKET LEADERSHIP: Investors are flocking to Nvidia, drawn by the company’s long-term fundamntals, dominant position in the AI sector, and pricing and margin power Two years after Nvidia Corp made history by becoming the first chipmaker to achieve a US$1 trillion market capitalization, an even more remarkable milestone is within its grasp: becoming the first company to reach US$4 trillion. After the emergence of China’s DeepSeek (深度求索) sent the stock plunging earlier this year and stoked concerns that outlays on artificial intelligence (AI) infrastructure were set to slow, Nvidia shares have rallied back to a record. The company’s biggest customers remain full steam ahead on spending, much of which is flowing to its computing systems. Microsoft Corp, Meta Platforms Inc, Amazon.com Inc and Alphabet Inc are
RISING: Strong exports, and life insurance companies’ efforts to manage currency risks indicates the NT dollar would eventually pass the 29 level, an expert said The New Taiwan dollar yesterday rallied to its strongest in three years amid inflows to the nation’s stock market and broad-based weakness in the US dollar. Exporter sales of the US currency and a repatriation of funds from local asset managers also played a role, said two traders, who asked not to be identified as they were not authorized to speak publicly. State-owned banks were seen buying the greenback yesterday, but only at a moderate scale, the traders said. The local currency gained 0.77 percent, outperforming almost all of its Asian peers, to close at NT$29.165 per US dollar in Taipei trading yesterday. The
The US overtaking China as Taiwan’s top export destination could boost industrial development and wage growth, given the US is a high-income economy, an economist said yesterday. However, Taiwan still needs to diversify its export markets due to the unpredictability of US President Donald Trump’s administration, said Chiou Jiunn-rong (邱俊榮), an economics professor at National Central University. Taiwan’s exports soared to a record US$51.74 billion last month, driven by strong demand for artificial intelligence (AI) products and continued orders, with information and communication technology (ICT) and audio/video products leading all sectors. The US reclaimed its position as Taiwan’s top export market, accounting for
RSS