$ 120 Billion for Chip Manufacturing: Taiwan Makes the West Look Old

In 2022 and beyond, Taiwan will invest the equivalent of approximately US $ 120 billion in its semiconductor industry. According to an on-site report from news agency Nikkei Asia, the two Taiwanese contract manufacturers TSMC, the world market leader, and UMC are already building many new chip manufacturing plants.

TSMC has already completed construction of four new semiconductor plants in the industrial park near Tainan. Four more will follow, already designed for the next generation of manufacturing with 3-nanometer structures. Today, these state-of-the-art semiconductor factories cost around $ 10 billion each.

TSMC is likely to have increased the ceiling height of the works to 3nm, in particular, so that new exposure machines with extreme ultraviolet light and a high numerical aperture (high EUV NA) can adapt in the future. Because these systems are taller than previous display machines, they don’t fit old semiconductor plants.

Overall, at least 20 new semiconductor plants are to be built or completed recently across Taiwan. Some of these are made by the chip maker UMC, which produces semiconductor components with structures up to 22nm, and by the memory manufacturer Nanya. According to Nikkei Asia, the semiconductor factories together have a usable area of ​​over 2 square kilometers.

The budget comes from the chip makers themselves on the one hand and the state on the other. TSMC, for example, invests tens of billions of dollars annually in researching new manufacturing processes and expanding its capacity.

Taiwan is also likely to pursue geopolitical motives: the more the Western world depends on the island’s semiconductor technology, the less it will accept an ever-threatening invasion from China. TSMC manufactures all processors (Ryzen, Epyc) and graphics chips (Radeon, Instinct) for AMD, GPUs for Intel and all Systems-on-Chip (SoC) for Apple.

According to Knometa Research, Taiwan’s semiconductor plants accounted for approximately 21% of global manufacturing capacity at the end of 2021. The equivalent of 21.6 million 200mm wafers were being processed each month at this point. is lower as all modern manufacturing processes use 300mm wafers). With a 23% share, South Korea has just overtaken Taiwan, thanks in particular to memory production from Samsung and SK Hynix. Taiwan, South Korea, China and Japan have achieved a global production share of 75%.

Asian countries produced the most semiconductor devices at the end of 2021. South Korea recently overtook Taiwan.

(Image: Knometa Research)

Semi’s market research team estimates that chip makers will spend more than $ 100 billion on display machines for the first time in 2022. It is expected to be around US $ 109 billion – more is apparently not possible due to the manufacturing capabilities of suppliers such as ASML.

In line with the Nikkei Asia report, the largest investments come from Taiwan: Taiwanese companies will spend 34 billion US dollars on new display machines in 2022, 52% more than in 2021. South Korea reaches 25.5 billions of US dollars, about half the amount.

By comparison, Western spending looks manageable: Europe is estimated to be spending $ 9.3 billion – a local record and a 176 percent increase – while US companies like Intel and Globalfoundries are spending $ 8.2 billion. China was defeated by Western sanctions: Chinese companies cannot buy modern EUV systems from the EUV monopolist ASML.


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