TSMC Plans $2.87 Billion Packaging Fab as German Fab Decision Looms

(Image credit: TSMC)

Although TSMC's revenue in the second quarter dropped by 10% year-over-year, the company is quite optimistic about the rebound of the semiconductor sector in the coming years. This is why it announced its intention to construct a new advanced chip packaging plant that will cost $2.87 billion and be located in Tongluo Science Park. In addition, the company is expected to formally announce its German fab in the coming weeks, according to CNA.

"To meet market needs, TSMC is planning to establish an advanced packaging fab in the Tongluo Science Park," a statement by TSMC reads. "TSMC expects to invest nearly NT$90 billion for the project, and create 1,500 job opportunities. The Science Park Administration has officially agreed to TSMC's application to lease land at the Tongluo Science Park and is arranging for a lease briefing." 

This plan for an additional advanced packaging facility is still in its preliminary phase, and TSMC has yet to hold a groundbreaking ceremony. Taiwanese media speculates that the facility may be up and running in 2027, so it is too early to discuss production capacity and other details.

(Image credit: TSMC)

The new facility in Tongluo will likely bear similarities to TSMC's newly recently inaugurated Advanced Backend Fab 6 that supports both front-end 3D stacking methods like chip-on-wafer (CoW) and wafer-on-wafer (WoW), as well as back-end packaging technologies like integrated fan-out (InFO) and chip-on-wafer-on-substrate (CoWoS).

The anticipated spending of nearly $2.9 billion on the Tonglue packaging facility speaks for itself. It suggests that the project is extensive, likely encompassing an all-inclusive facility that can provide comprehensive integration of 3DFabric front-end to back-end processes and testing services. While the production capacity of the Tongluo facility remains unclear at this point, it is logical to expect it to be bigger than the Advanced Backend Fab 6, considering the increasing importance of advanced packaging.

In addition to announcing plans to build another advanced packaging facility in Taiwan, TSMC is also building its chip production prowess. There are many signs (albeit from unofficial sources) that TSMC will announce its German fab in the coming weeks.

Xu Youge, director of the German Association in Taiwan, a de-facto embassy in Taiwan as analyst Dan Nystedt puts it, said that TSMC could formally announce plans to build a fab near Dresden in the coming weeks, according to CNA. TSMC has officially confirmed that it was negotiating with customers and partners in Europe to assess the possibility of building a fab focusing on chips and microcontrollers for automakers in Germany. The capacity and capabilities of the fab are projected to be determined by such factors as customers' needs and government support.

Anton Shilov
Contributing Writer

Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.