Taiwan broke ground Monday on a new advanced semiconductor-packaging industrial park in Kaohsiung, expanding the infrastructure behind one of the most important bottlenecks in the global AI chip supply chain.
The 88.7-hectare Baipu Industrial Park will include 53.6 hectares designated for industrial use and is expected to host facilities from Taiwan Semiconductor Manufacturing Company, including technology-validation laboratories and a semiconductor talent-training center. Operations at TSMC’s facilities are targeted for the fourth quarter of 2029.
Advanced packaging has become increasingly important because modern AI systems combine multiple high-performance processors and memory components rather than relying solely on improvements inside an individual chip.
That has elevated packaging technologies such as TSMC’s CoWoS platform from a relatively specialized manufacturing process into a strategic component of the AI infrastructure supply chain.
TSMC previously said it expects its CoWoS advanced-packaging capacity to grow at a compound annual rate exceeding 80% through 2027, with strong expansion continuing through 2029.
The new Kaohsiung site is intended to accelerate testing and validation of semiconductor equipment and materials while allowing suppliers to work more closely with TSMC.
Taiwan President Lai Ching-te said advanced packaging is increasingly important for artificial intelligence and high-performance computing. The government has also sought to reassure chipmakers that electricity supply will remain adequate as semiconductor capacity expands.
The investment reinforces Taiwan’s effort to preserve its position at the center of the semiconductor supply chain even as chip manufacturing capacity expands in the United States, Japan and Europe.
For markets, the project highlights where the next phase of the AI hardware race is moving. Leading-edge fabrication remains essential, but packaging capacity, memory, power and networking are increasingly determining how quickly advanced processors can actually reach customers.
