Taiwan’s TSMC drops factory expansion in Longtan amid local opposition

[Courtesy of TSMC]

Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, said it would not build a 1-nanometer (nm) chip factory in a rural part of northern Taiwan amid strong opposition from residents.

According to Taiwanese media reports on Wednesday, TSMC said in a statement published Tuesday that “after evaluation, TSMC is no longer considering establishing a site at phase 3 of the Longtan section under the present conditions.”

The statement added that the chipmaker will continue to cooperate with the Taiwan government to assess suitable locations for semiconductor manufacturing facilities in Taiwan.

The world’s largest contract chipmaker had intended to build a 1.4-nm chip factory in Longtan by 2026 and begin commercial production in 2027, but the plan went awry, according to a report from China Times.

The Executive Yuan, the executive branch of the Taiwanese government, decided to offer part of the Longtan Science Park in Taoyuan as a construction site to TSMC in November 2022. But the local community strongly opposed the decision, arguing that the Longtan expansion constituted land expropriation on the government’s part, as around 88 percent of the land was owned by private owners.

Although the chipmaker held several negotiations with a representative group of local opponents, the two sides failed to reach an agreement.

Meanwhile, some market insiders described the latest decision as a simple delay in the expansion, as the chipmaker has yet to outline a definite strategy for 1-nm chips amid expectations that the global chip market dynamics will be led by 3-nm chips in 2024.