The U.S. Department of Commerce has initiated the “National Advanced Packaging Manufacturing Program (NAPMP) ,” with materials and substrates being the first subsidized areas. Due to the close collaboration between IC testing and IC substrates, it is not ruled out that the IC substrate industry could be the next recipient of subsidies under the U.S. chip legislation.

However, according to Commercial Times’ report, there is a lack of interest among Taiwanese PCB manufacturers in establishing facilities in the U.S., and there are three main reasons for this. 

Firstly, the PCB industry thrives on economies of scale, and the production costs in the U.S. are too high. Taiwanese manufacturers have recently responded to the China Plus One Strategy by establishing facilities in Southeast Asia, making it unlikely for them to set up operations in the U.S.

Secondly, the U.S. is not particularly welcoming to polluting industries, making pure substrate manufacturers more likely candidates. 

Thirdly, domestic PCB manufacturers in the U.S. are also relocating their production lines. If seeking a partnership is necessary, Japanese manufacturers may present a more viable option.

As for potential subsidy recipients, industry experts speculate that one of the more likely beneficiaries could be TTM Technologies, a major PCB manufacturer in the United States. TTM announced in 2023 the establishment of a new facility in the state of New York dedicated to producing HDI PCBs, primarily for military applications in line with U.S. strategic requirements.

The United States plans to invest USD 3 billion in three main areas: an advanced packaging piloting facility, workforce training programs, and funding for projects. The funding is derived from the CHIPS and Science Act, and detailed information on the subsidy program is expected to be announced in early 2024.

In response to this news, the Taiwan Printed Circuit Association pointed out that the conditions for subsidies under the CHIPS and Science Act are stringent. In the past year, the semiconductor supply chain-related companies, led by foundry outsourcing, have started to establish a production presence in the U.S. This includes not only foundries such as TSMC, Samsung, and Intel but also packaging and testing facilities like Amkor and ASE Group.

The association highlighted that IC substrates are part of the semiconductor supply chain, but the more immediate impact is on packaging and testing facilities. If global packaging and testing facilities also take concrete actions to establish operations in the U.S. following the “whole chip” production mindset, the pressure on IC substrate manufacturing will undoubtedly increase. It is not ruled out that the IC substrate industry could be the next focus of the U.S. government’s attention.

While the production scale of IC substrates (or the overall PCB) in the U.S. may not be significant, once categorized as a strategic material, even small-scale production becomes meaningful.

In other words, establishing operations in the U.S. is not solely about scale but rather about companies having the “capability” to produce locally. Reportedly, the industry should pay attention to the future developments in U.S. policy in this regard.

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(Photo credit: iStock)

TSMC’s trillion-dollar investment plan for a 1nm fab is reportedly set to be established in the science park in Taibao City, Chiayi County, Taiwan. This follows TSMC’s recent announcement of the construction of its third 2nm fab in Kaohsiung, marking yet another strategic choice for advanced processes in southern Taiwan.

According to UDN’s report citing sources, TSMC has submitted a request for 100 hectares (roughly 247.10 acres) of land to the Southern Taiwan Science Park Administration, which oversees the Chiayi Science Park. Of this, 40 hectares (roughly 98.84 acres) are designated for an advanced packaging facility, while the remaining 60 hectares (roughly 148.26 Acres) are earmarked for the construction of a 1nm fab.

As TSMC’s land requirements exceed the initially planned 88 hectares (roughly 217.45 acres) in the first phase of the Chiayi Science Park, there are expectations for an accelerated expansion in the second phase to accommodate TSMC’s needs.

TSMC stated that the selection of the fab site involves various considerations. TSMC considers Taiwan as its primary base but does not rule out any possibilities, and continues to collaborate with the administration to assess suitable semiconductor fab sites. TSMC emphasized that all information should be primarily referred to the company’s official announcements.

As understood, the TSMC fab construction team conducted a site survey in the Chiayi Science Park in August of 2023, before it was incorporated into the jurisdiction of the Southern Taiwan Science Park Administration.

This move came after facing strong opposition during the third-phase expansion in the Longtan Science Park in Taoyuan. Following the intense protests, the TSMC construction team initiated a contingency plan and ultimately decided to abandon the construction project within the Longtan Science Park’s third-phase expansion.

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(Photo credit: TSMC)

TSMC’s 2nm fab, strategically positioned between the Hsinchu Science Park and the Nanzih Technology Industrial Park in Kaohsiung Science Park, is rapidly taking shape.

According to Liberty Times Net, reports from the supply chain suggest that up to five fabs could be constructed in the Nanzih. The first of these fabs, currently under construction, is scheduled to begin its tool-in in January 2025.

Furthermore, there are indications that construction for the second fab may commence in the near future. There is also speculation that the third fab might be designated for the production of 2nm process, although this possibility has not been ruled out.

Chen Chi-Mai, Mayor of Kaohsiung city, mentioned that the progress of the first fab is proceeding as scheduled as expectations. Additionally, miscellaneous permits for the second fab were issued to TSMC in mid-December, 2023

While the semiconductor industry is still undergoing inventory adjustments, TSMC still continues its pursuit of advanced process over Intel and Samsung. Construction is underway for the new 2nm fab, with the steel structure completed for the Baoshan 2nm fab in the Hsinchu Science Park, including the cleanroom, is currently in progress.

According to Wayne Wang, the director-general of the Hsinchu Science Park Bureau, Baoshan Phase 2 will serve as one of TSMC’s production bases for 2nm process. Simultaneously, public construction projects and fab construction are proceeding, with the first plant set to tool-in in April next year, following the completion of workflow inspections.

Nanzih is also a primary production base for TSMC’s 2nm fab. The initial plan for the first fab was to produce chips using the 28nm and 7nm process. However, in response to geopolitical and economic changes, the decision was made to switch to the 2nm process.

Due to the different specifications on each semiconductor equipment, the Nanzih project began earlier this year, and faced challenges. However, the design was subsequently modified right off the bat, and re-started. For now, the progress is halfway through the whole project.

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(Photo credit: TSMC)

According to ChinaTimes’s report, following Taiwan’s implementation of strict control on 22 core key technologies, several Taiwanese lawmakers are urging the country’s Ministry of Economic Affairs to also consider “mild control” for the export of mature semiconductor process equipment and industry talents from Taiwan to China. Furthermore, the Ministry of Economic Affairs emphasized its success in attracting semiconductor giants like AMD and NVIDIA.

Taiwan’s Minister of Economic Affairs, Wang Mei-hua, stated on the December11th that discussions across government departments would be necessary to include mature semiconductor processes and industry talents in the category of “mild export controls.”

The Ministry of Economic Affairs aims to present its view on this matter within three months. She emphasized the importance of ensuring Taiwan’s continued role in critical international supply chains.

Other officials under the ministry added that they are aware of China’s significant efforts to develop mature processes. They plan to conduct an analysis of the expansion of mature processes in China, and any regulatory responses will be based on the results of this analysis.

The officials noted that China aims for competitiveness in terms of price and quantity but emphasized that Taiwan has advantages in certain special semiconductor manufacturing processes. They expressed caution about Chinese IC design firms potentially impacting the lower-end market by placing orders with their compatriot foundries.

The Ministry of Economic Affairs highlighted its success in attracting major AI chip manufacturers, such as AMD and NVIDIA, to establish logistics and operational centers in Taiwan over the past two years.

NVIDIA has chosen to establish its hub warehouse logistics center within the Farglory  Free Trade Zone. NVIDIA’s product applications span both consumer and industrial sectors, with a future focus on investments in 5G, AI, autonomous vehicles, cloud computing, advanced applications, and data centers.

The establishment of a logistics center in Taiwan is expected to further increase the share of OSAT orders in Taiwan, driving development in Taiwan’s advanced IC packaging technology. Additionally, AMD initiated an assessment in 2022 for investing in a “mega” logistics center in Asia.

The Taiwanese Ministry of Economic Affairs held multiple meetings to facilitate communication between the company and the Ministry of Finance, explaining the project’s economic benefits to Taiwan. Finally, with successful coordination, AMD smoothly proceeded with the establishment of its logistics center in Taiwan.

AMD anticipates significant revenue growth from the logistics center, aligning with the demand for high-end AI server orders from the fourth quarter of this year to the next.

(Photo credit: NVIDIA)

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• [News] Taiwan Lists 22 Critical Technologies to Face Strict Controls, Included 14nm Processes and Beyond

In an announcement on December 5th, Taiwan’s National Science and Technology Council(NSTC) has designated 22 technologies, such as IC manufacturing and heterogeneous integration packaging, as national core key technologies. This inaugural list prioritizes technologies with leading advantages and immediate protection requirements.

NSTC, in collaboration with relevant ministries, plans to conduct a comprehensive review three months later, anticipating a second wave of additions or adjustments, as per reported by UDN News.

NSTC emphasized that the theft of classified national core key technologies through economic espionage will prompt legal investigations with enhanced penalties. Moreover, individuals receiving government subsidies exceeding half in national key technology businesses must obtain permission for travel to China.

Highlighting the significance of the semiconductor industry, especially considering Taiwan’s global market share and interconnected supply chain, the listed technologies include IC manufacturing for 14nm process and advanced processes beyond, encompassing critical gases, chemicals, and equipment. Heterogeneous integration packaging technologies, such as wafer and silicon photonics integration packaging, along with their essential materials and equipment, are also covered. Additionally, the list features chip security, post-quantum cryptography protection, and proactive network defense technologies, reflecting their relevance to information security.

NSTC highlighted the ongoing thoroughness of the list to safeguard industries. In this regard, it plans to collaborate with relevant ministries, keeping pace with technological advancements and the industrial development trajectories of nations like the United States and South Korea.

According to CNA’s report, the council will actively seek input from industry, government, academia, and research communities. A second wave of the list is expected to be presented after a comprehensive review three months later.