Taiwan Breaks Ground on TSMC Advanced Packaging Park

Taiwan has broken ground on a new advanced semiconductor packaging industrial park in Kaohsiung, strengthening the island's manufacturing ecosystem for artificial intelligence and high-performance computing chips.

The Baipu Industrial Park covers nearly 89 hectares, with approximately 53.6 hectares designated for industrial use. Taiwan Semiconductor Manufacturing Company, or TSMC, will establish technology-validation and talent-training facilities at the site.

Taiwan's government expects the wider park to generate approximately NT$300 billion, or about US$9.4 billion, in annual output and create more than 4,000 jobs.

Baipu Industrial Park: Key Figures

Indicator	Reported Figure
Location	Kaohsiung, Taiwan
Total park area	Nearly 89 hectares
Industrial land	Approximately 53.6 hectares
Expected annual output	NT$300 billion
Expected employment	More than 4,000 jobs
TSMC site	Approximately 3 hectares
TSMC facilities	Two buildings
TSMC planned opening	Fourth quarter of 2029
Main focus	Advanced packaging equipment and materials validation, R&D and talent training

Construction Begins in Kaohsiung

The groundbreaking ceremony was held on September 21, 2026.

Taiwan President Lai Ching-te described the project as an important addition to southern Taiwan's semiconductor ecosystem and part of the government's broader strategy to develop a stronger technology corridor across the region.

The project brings together the Ministry of Economic Affairs, Kaohsiung City Government and TSMC.

Why Advanced Packaging Has Become Strategically Important

Advanced packaging has become a critical part of modern semiconductor manufacturing because leading AI and high-performance computing systems increasingly combine multiple chips, memory devices and other components into highly integrated packages.

Performance improvements therefore depend not only on shrinking transistor dimensions but also on how processors, memory and interconnects are integrated at the package level.

Technologies such as chiplets, 2.5D integration, 3D integration and high-bandwidth memory have increased the importance of packaging capacity, equipment and materials.

AI Is Driving Advanced Packaging Demand

Demand for AI accelerators has created rapid growth in advanced packaging requirements.

TSMC said earlier in September that demand for its CoWoS advanced packaging technology remains strong and that the company's CoWoS capacity is expected to grow at a compound annual growth rate of more than 80% through 2027, with strong growth expected to continue through 2029.

CoWoS, or Chip-on-Wafer-on-Substrate, is widely used for high-performance computing products that combine advanced logic chips with high-bandwidth memory.

TSMC Plans a 3-Hectare Hub Inside the Park

TSMC plans to develop approximately 3 hectares inside Baipu Industrial Park.

The site is expected to contain two buildings featuring modular facilities that can be adjusted as semiconductor technologies evolve.

Planned facilities include:

Small cleanrooms
Technology-validation laboratories
Joint-development facilities
Advanced packaging equipment testing
Materials testing
Process research and development
Semiconductor talent training

TSMC Facilities Target Q4 2029 Operations

Kaohsiung officials said TSMC's two facilities are expected to begin operations in the fourth quarter of 2029.

The long construction and qualification timeline reflects the specialized infrastructure required for semiconductor laboratories, cleanrooms and advanced packaging technology development.

A New Validation Base for Equipment and Materials Suppliers

One of the most important functions of the park is to provide a dedicated environment where semiconductor equipment and materials companies can develop, test and validate products closer to TSMC's production ecosystem.

Taiwan says the park will become the country's first dedicated testing and verification base for advanced semiconductor equipment and materials.

This can be especially important for local suppliers trying to enter advanced semiconductor supply chains.

TSMC Expects Faster Validation

TSMC Vice President of Advanced Packaging Technology and Service Jun He said the new facility could improve validation efficiency by approximately 25% to 50%.

Faster validation can reduce the time required to move new equipment, materials and processes from development into high-volume manufacturing.

What the Validation Model Means for Suppliers

Semiconductor suppliers often face long qualification cycles because new equipment or materials can affect yield, reliability and production stability.

A shared validation environment can allow suppliers to:

Test equipment under relevant process conditions
Validate new materials
Work directly with semiconductor engineers
Accelerate process qualification
Identify technical problems earlier
Reduce the gap between R&D and mass production

This can improve the chances that Taiwanese equipment and materials companies qualify for high-value semiconductor programs.

Taiwan Wants More Local Companies in Advanced Packaging Supply Chains

President Lai said the park is intended to shorten the time required to introduce new technologies into mass production and increase opportunities for local businesses to enter advanced semiconductor supply chains.

That strategy extends beyond chipmakers themselves.

Potential supplier categories include:

Wafer and packaging equipment
Inspection and metrology
Advanced substrates
Photoresists and process chemicals
Bonding materials
Thermal-management materials
Precision components
Vacuum systems
Robotics and automation
Cleanroom systems

Taiwan Is Increasing Domestic Semiconductor Equipment Capability

Taiwan's Ministry of Economic Affairs has been supporting local semiconductor equipment developers through validation programs connected with major manufacturers including TSMC and ASE.

In September 2026, the ministry said 29 companies had completed equipment development and production-line validation through its semiconductor equipment validation program.

The ministry also said Taiwan's domestic semiconductor equipment production value is expected to exceed NT$270 billion in 2026.

Baipu Strengthens Southern Taiwan's Semiconductor Cluster

The Baipu project is part of a broader semiconductor corridor taking shape across southern Taiwan.

Taiwan's government says Baipu will connect different regional capabilities, including:

Advanced semiconductor manufacturing in Nanzih
Packaging and testing activity in Renwu
Materials and key components around Qiaotou
Precision machinery and metalworking capabilities in Gangshan and Luzhu

The objective is to create a more integrated regional supply chain rather than isolated manufacturing sites.

TSMC Is Already Expanding Advanced Manufacturing in Kaohsiung

The new park complements TSMC's existing and planned operations in the nearby Nanzih area.

Kaohsiung has become an increasingly important part of Taiwan's advanced semiconductor expansion as production and supplier investment moves beyond the traditional northern Taiwan clusters.

ASE Is Also Expanding Advanced Packaging in Kaohsiung

Advanced Semiconductor Engineering, or ASE, is also increasing packaging and testing capacity in Kaohsiung.

In April 2026, Taiwan's Ministry of Economic Affairs announced a NT$17.8 billion project involving ASE and partners at the Nanzih Technology Industrial Park.

The project includes advanced semiconductor packaging and testing facilities and logistics infrastructure and is expected to create approximately 1,470 jobs.

This reinforces Kaohsiung's role as both a front-end semiconductor manufacturing and back-end packaging center.

Advanced Packaging Investment Is Expanding Across Taiwan

Baipu is one of several advanced packaging projects currently being developed in Taiwan.

In central Taiwan, Siliconware Precision Industries announced approximately NT$100 billion of investment in a new Yunlin facility that will introduce CoWoS advanced packaging processes.

The project is expected to create around 2,200 jobs and begin operations in 2028.

TSMC is also expanding advanced packaging capacity at Chiayi Science Park, where additional packaging facilities are planned.

Packaging Has Become a Capacity Bottleneck

The AI boom has changed the role of semiconductor packaging.

Historically, packaging was often viewed as a lower-value manufacturing step after wafer fabrication. Modern AI processors have changed that relationship because advanced packages combine expensive logic dies, high-bandwidth memory and sophisticated interconnect structures.

As a result, packaging capacity can constrain how quickly advanced AI chips reach customers even when wafer fabrication capacity is available.

What Is CoWoS?

CoWoS stands for Chip-on-Wafer-on-Substrate.

It is an advanced packaging platform that allows multiple semiconductor dies to be integrated within a high-performance package.

Typical applications include:

AI accelerators
High-performance computing processors
Data-center chips
Products using high-bandwidth memory

The technology helps provide the bandwidth and interconnect density required by modern AI systems.

Advanced Packaging Requires Specialized Equipment and Materials

Advanced packaging creates demand for a wide range of manufacturing technologies, including:

Die bonding
Wafer bonding
Advanced lithography
Metrology
Inspection systems
Substrate manufacturing
Thermal interface materials
Underfill materials
Precision dispensing
Automated material handling
Cleanroom equipment

This creates opportunities for suppliers beyond the large semiconductor manufacturers themselves.

Talent Training Is a Core Part of the Project

TSMC will also establish a dedicated training center inside the park.

The center is intended to develop advanced semiconductor process and equipment specialists.

Talent availability has become a strategic issue as semiconductor companies expand fabrication, packaging, equipment and materials capacity simultaneously.

Why Advanced Packaging Requires Specialized Skills

Advanced packaging brings together several disciplines:

Semiconductor process engineering
Materials science
Mechanical engineering
Thermal engineering
Precision automation
Metrology
Quality and reliability engineering

Training workers and engineers close to the validation facilities can support both TSMC and the wider supplier ecosystem.

Taiwan Promises Infrastructure Support

At the groundbreaking ceremony, President Lai said the government is preparing the water, electricity, land and talent resources required for continued industrial development.

Power supply is particularly important for semiconductor manufacturing because fabs, cleanrooms and supporting infrastructure require large amounts of reliable electricity.

Lai said Taiwan has plans intended to maintain stable electricity supply through 2035.

More Than 4,000 Jobs and NT$300 Billion in Annual Output

Taiwan's government estimates that Baipu Industrial Park could generate more than 4,000 jobs and approximately NT$300 billion in annual economic output once developed.

Those figures refer to the broader industrial park rather than TSMC's two buildings alone.

Industrial Land Is Becoming Strategically Valuable

Semiconductor growth creates unusually high demand for suitable industrial land because manufacturing facilities require extensive supporting infrastructure.

Sites must accommodate:

Reliable power
Water
Waste treatment
Cleanroom facilities
Logistics access
Supplier proximity

Industrial parks that provide these resources can shorten project timelines for semiconductor companies and their suppliers.

Finding Semiconductor Suppliers Through FactoryMore

Expansion in advanced packaging creates opportunities across semiconductor equipment, materials, precision manufacturing, automation and cleanroom supply chains.

Companies operating in these areas can use FactoryMore to identify manufacturers, suppliers, distributors and potential commercial partners by industry and region.

Explore companies on FactoryMore to identify potential semiconductor, electronics and advanced-manufacturing partners.

What to Watch Next

The next stages of the Baipu project will show how quickly the park develops into a functioning advanced packaging supplier ecosystem.

Important milestones include:

Completion of park infrastructure
Construction of TSMC's two buildings
Additional equipment and materials suppliers committing to the park
Development of shared validation programs
Opening of the talent-training center
Growth of local semiconductor equipment companies
TSMC's continued CoWoS capacity expansion
Integration with other southern Taiwan semiconductor clusters

Key Takeaways

Taiwan broke ground on Baipu Industrial Park in Kaohsiung on September 21, 2026.
The park covers nearly 89 hectares, with about 53.6 hectares designated for industrial use.
Taiwan expects the park to generate approximately NT$300 billion in annual output and more than 4,000 jobs.
TSMC plans a roughly 3-hectare site with two buildings.
The facilities will include technology-validation laboratories and a semiconductor talent-training center.
Operations are expected to begin in the fourth quarter of 2029.
TSMC expects the hub to improve equipment and materials validation efficiency by approximately 25% to 50%.
TSMC expects CoWoS advanced packaging capacity to grow at a CAGR above 80% through 2027.
The project is designed to strengthen Taiwan's domestic semiconductor equipment and materials supply chain.

Outlook

Baipu Industrial Park reflects the growing strategic importance of advanced semiconductor packaging.

As AI and high-performance computing systems become more complex, competition increasingly extends beyond leading-edge wafer fabrication into packaging, substrates, equipment, materials and thermal management.

TSMC's decision to create a dedicated validation and training hub suggests that supplier development is becoming as important as expanding production capacity itself.

If the park successfully shortens qualification cycles and brings more Taiwanese equipment and materials companies into advanced packaging programs, it could strengthen Taiwan's position across a wider portion of the semiconductor value chain.

Taiwan Breaks Ground on Advanced Semiconductor Packaging Park Anchored by TSMC