Preface

In a groundbreaking expansion effort, TSMC (2330-TW)(TSM-US) announces its ambitious plan for 2023, targeting the construction of 10 new facilities globally. This major initiative will primarily focus on enhancing 2-nanometer wafer production, CoWoS-L technology, and boosting international manufacturing capabilities in Taiwan, the USA, Japan, and Germany. This strategy marks the most significant expansion in the company's history, energizing the facilities engineering sector with abundant construction contracts.

Lazy bag

TSMC's10-plant global expansion plan is poised to make 2023 a record-setting year, with a concentration on 2-nanometer and CoWoS-L technologies, amidst geopolitical uncertainties.

Main Body

The current year promises to be transformative for Taiwan Semiconductor Manufacturing Company (TSMC), as it embarks on an unprecedented global expansion by constructing 10 new manufacturing sites. Predominantly focused on advancing its 2-nanometer process technology and expanding overseas production, this initiative includes significant developments across Taiwan, the United States, Japan, and Germany. The robust expansion strategy elevates 2023 as the year with the highest factory development rate in the history of TSMC, projecting a favorable impact on its facilities engineering supply chain.

In Taiwan, TSMC has already completed its new plant, Hsinchu Baoshan F20P1, commencing 2-nanometer production, while F20P2 remains under construction. Kaohsiung's F22P1 facility is finished and currently installing machines, anticipating mass production in Q2, with P2 and P3 under construction. P4 and P5 await environmental assessment to commence construction later this year. This expansion designates Kaohsiung as a principal hub for 2-nanometer production, with seven production sites dedicated to this advanced technology.

The demand for advanced CoWoS packaging technology has propelled TSMC to expand aggressively, purchasing additional land in Jaco and acquiring a former Innolux site in Southern Taiwan. Construction of the Jaco AP7 facility is underway, expected to complete by Q3, while the Southern Science Park AP8 plant is undergoing renovation, aiming for operational status in the latter half of 2023. This expansion increases CoWoS-L capacity to meet the demands of clients like NVIDIA for their GB200/300 series products.

Geopolitical risks have prompted TSMC to strategically advance its international footprint. This year kicks off with the construction of the second plant in Kumamoto, Japan, and facilities in Dresden, Germany, and Arizona, USA. These sites aim to broaden customer production choices, bolstering TSMC's global customer base.

Within the industry, TSMC's aggressive production schedule is anticipated to thrive amidst a competitive global infrastructure and the current labor shortages. By investing in higher construction costs to expedite project completion, TSMC aims to satisfy customer expectations and establish favorable conditions for facilities engineering providers. Many industry players are aligning project timelines with TSMC's to prioritize its operations, expecting a significant boost to this year's business performance.

Key Insights Table