Taiwan, accelerating its push into artificial intelligence, is moving to build up its semiconductor substrate industry as a second "sacred mountain guarding the nation" — a phrase local media use for TSMC, the world's largest contract chipmaker — this time centered on Ajinomoto Build-up Film, or ABF, substrates.
Taoyuan Mayor Chang Shan-cheng told the city council that the city plans to develop an industrial complex for the sector, according to Taiwanese media including the China Times on the 16th. "Demand for advanced ABF substrates is rising sharply as the AI server and data center markets grow rapidly," the mayor said.
Chang said the city will set aside about 40 hectares of industrial land for makers of advanced ABF substrates on the first phase site of the Aerotropolis special industrial zone near Taoyuan airport.
Land acquisition for the site is largely complete. The city is targeting a construction start in the second half of next year and plans to sign memorandums of understanding next month with companies considering moving in. The complex could expand to as much as 100 hectares if industry demand grows.
Taoyuan aims to turn the complex into a semiconductor cluster linked to TSMC's advanced manufacturing. TSMC plans to build a production facility for 1.4-nanometer chips at the Longtan Science Park in Taoyuan.
"If TSMC's advanced chip plant and an ABF substrate production base are linked, a new semiconductor supply chain could form in Taoyuan," Chang said. "If the plan succeeds, the ABF substrate industry could grow into a second sacred mountain guarding the nation, supporting Taiwan's economy alongside TSMC."
Taiwan's central government has also pledged support. "The Executive Yuan expressed full support at a related meeting," Chang said, adding that the city plans to build a new 161-kilovolt transmission network and a nearby substation in cooperation with Taiwan Power Co. The city is also working to secure water for the large-scale production facilities, with officials weighing a plan to draw up to 100,000 tons of industrial water a day through the Water Resources Agency under the Ministry of Economic Affairs.
ABF substrates are a core material in the package substrates that connect high-performance chips to motherboards. They use an insulating film that prevents signal interference and electrical shorts between fine circuits, and the market is expanding quickly as demand surges for high-performance AI chips and server processors.
Competition in advanced processes is also intensifying among Taiwanese chip firms. Fabless company MediaTek on the 15th unveiled the Dimensity 9600 Pro, built on the second generation of TSMC's 2-nanometer process, and the 9600M, based on a 3-nanometer process. Smartphones equipped with the Dimensity 9600 Pro are set to reach the market as early as next month.
