TSMC's New AI Chip Plant Halted by Archaeological Find in Taiwan

The Taiwan Semiconductor Manufacturing Company (TSMC) has significantly delayed expanding its chip packaging capacity after potential archaeological ruins were discovered at the planned site in Chiayi, Taiwan. The construction of two new facilities for AI chip packaging is now uncertain.

TSMC's Expansion Plans for AI Chip Packaging Delayed by Potential Archaeological Discoveries in Chiayi

In response to the robust demand from the artificial intelligence industry, the Taiwan Semiconductor Manufacturing Company (TSMC) has needed to improve its efforts to expand its semiconductor packaging capacity rapidly. This was due to the discovery of potential archaeological ruins at the proposed location of a new plant. TSMC is preparing to construct two Chip on Wafer on Substrate (CoWoS) packaging facilities in Chiayi, Taiwan. Additionally, the National Taiwan University is recruiting trained personnel for archaeological excavations, as reported by the Taiwanese press.

The Taiwanese government issued statements earlier this year indicating that the first plant would be operational in 2028 after its completion of construction in 2026. TSMC intends to construct two CoWoS packaging plants in Chiyai.

In Taiwan, social media reports recently circulated that TSMC encountered a setback during excavations when constructing new packaging facilities to increase the capacity of AI processors. According to Wccftech, the reports indicated that archaeological ruins were discovered at the site. Taiwan Vice Premier Chen Wen-tsan announced TSMC's packaging facilities in Taiwan's Chiyai region in March of this year. This announcement was made a day after Chen met with TSMC's vice president of Operations, Arthur Chuang, Minister Wang Mei-hua, and local government officials in the region.

Chiayi Science Park will be the site of the construction of these facilities, and VP Chen stated that the initial plant will be completed in 2026. According to a Taiwanese press report, social media reports have recently suggested that the architects excavating the site may have discovered archaeological remains nearby. The National Taiwan University is "urgently recruiting" personnel trained in these operations, as removing any such remains is complex and beyond the capabilities of typical builders.

TSMC Considers Temporary Adjustments for AI Chip Packaging Amid Archaeological Delays, Eyes Taichung Facility

According to industry sources, TSMC may need to make temporary adjustments even though the purported remains discovered at Chiyai may not disrupt its long-term plans to expand its packaging capacity. One prospective location is an old facility in Taichung, which could serve as an alternative for the time being.

TSMC has been compelled to expand its operations due to the increased global demand for AI chips, necessitating sophisticated packaging techniques for optimal performance. The company had previously provided back-end packaging as part of a broader variety of services; however, it is now an equally significant component of its product portfolio.

TSMC's packaging capacity is anticipated to increase to 32,000 wafers per month by the end of 2024, range from 50,000 to 55,000 wafers per month in 2025, and reach 65,000 wafers per month in 2026. Wall Street's AI darling, NVIDIA, and its lesser competitor, AMD, utilize TSMC's packaging products.