TSMC plans to build 5 additional advanced chip packaging plants in the Chiayi Science Park in southern Taiwan to keep pace with the massive demand for AI processors. This expansion aims to make the park the largest global hub for advanced chip assembly.
- Massive expansion plan in Chiayi Science Park
- Explosive demand from major global companies and packaging technology
- Execution phases and environmental and regulatory approvals
- AI island vision and record capital expenditures
- Frequently asked questions
Massive expansion plan in Chiayi Science Park
Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract semiconductor foundry, is moving toward a massive strategic expansion by building 5 additional advanced packaging plants in the Chiayi Science Park located in southern Taiwan. This bold move will raise the total number of the company’s advanced packaging facilities at this strategic location to 10 full plants, cementing the park’s position as the largest advanced assembly center for AI chips on the planet.
Taiwan’s Liberty Times was the first to reveal details of this expanded plan on September 27, drawing on well-informed sources within the semiconductor supply chains. The plan is tied to an official notice issued by Taiwan’s National Science and Technology Council on September 24, inviting public feedback on the future expansion of the Chiayi Science Park—a move local industry circles considered the actual kickoff for the third phase of developing the mega-park.
Explosive demand from major global companies and packaging technology
This unprecedented investment surge is driven by massive and continuous demand from global technology giants, foremost among them Nvidia, AMD, and Apple. These companies rely heavily on TSMC’s advanced packaging technology, known as Chip-on-Wafer-on-Substrate or CoWoS for short. This complex architecture integrates multiple dies and high-performance GPUs with high-bandwidth memory units on a highly efficient unified substrate.
Chip industry experts and analysts confirm that current supply chains face real difficulties in keeping pace with the massive influx of purchase orders for AI data center processors. TSMC currently possesses two advanced packaging facilities under the first phase in the Chiayi park, which began actual commercial production last June, while 3 other plants are planned under the second phase, where a ground-breaking ceremony was held last July with completion and operation targeted before 2031. If the five third-phase plants are completed, the site will house 10 mega-facilities.
Execution phases and environmental and regulatory approvals
The third-phase facilities are scheduled to span a vast area of approximately 198.65 hectares of agricultural land owned by the state-run Taiwan Sugar Corporation near Taibao City in Chiayi County. Following the month-long public survey period, the massive project must pass a long series of rigorous studies and procedures, including technical and economic feasibility studies, executive cabinet approval, comprehensive urban planning reviews, and a detailed environmental impact assessment to ensure sustainability, energy, and water sources before actual construction work begins.
The Taiwanese government plans to leverage this expansion to attract an integrated ecosystem of global and local companies specializing in advanced, vital fields such as smart software, silicon photonics technologies, advanced post-5G and 6G communications, quantum computing, and carbon neutrality solutions. This cluster aims to create an integrated industrial environment that feeds advanced supply chains.
AI island vision and record capital expenditures
This national project aligns completely with the strategic vision put forward by Taiwan’s President Lai Ching-te, aimed at transforming Taiwan into an “AI island” and building an integrated semiconductor corridor connecting the Southern Taiwan Science Park with advanced technology hubs in Hsinchu, Taichung, Tainan, and Kaohsiung. These plans strengthen Taiwan’s geopolitical position at the heart of the global digital revolution.
To keep pace with this expansion, TSMC raised its capital expenditure forecast for 2026 in July to a range between $60 billion and $64 billion, compared to previous estimates ranging from $52 billion to $56 billion. The company currently operates 19 foundries and advanced packaging facilities in Taiwan, and is building and planning 13 additional facilities across the island, according to data from Taiwan’s Ministry of Economic Affairs.
Frequently asked questions
Question: How many advanced packaging plants are planned for construction in the Chiayi park?
Answer: TSMC plans to build 5 new plants under the third phase, raising the total number of facilities in the park to 10 advanced plants.
Question: Which global companies have the highest demand for CoWoS advanced packaging technologies?
Answer: Nvidia, Apple, and AMD top the list of companies relying on packaging technology to integrate processors with ultra-fast memory.
Question: What is the capital expenditure volume allocated for TSMC for 2026?
Answer: The company raised its capital expenditure forecast to range between $60 billion and $64 billion to keep pace with record expansions.
