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Taipei, Sept. 30 (CNA) An environmental impact assessment report on a massive investment project to build a new fab in the south, announced by Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電), is expected to be completed in one and a half years to ensure that TSMC goes ahead with its plans, the Southern Taiwan Science Park Bureau said Saturday.

TSMC aims to build an advanced 3 nanometer foundry fab in the Tainan Science Park, which is a part of the Southern Taiwan Science Park.

Lin Wei-cheng (林威呈), head of the bureau, said his office needs about one year to collect information about the project's possible impact on the environment.

The bureau, supervised by the Ministry of Science and Technology, will need an additional six months to finish the assessment report before assigning a 30-hectare plot of land for construction of the new facility by the end of 2020, Lin said.

On Friday, TSMC, the world's largest contract chip maker, announced that it had chosen Tainan as a site to house its 3nm process foundry fab, which is expected to help the chip maker maintain the lead over its peers in the global market.

While TSMC did not disclose financial details about the plan, local media said that the investment could total NT$500 billion (US$16.45 billion) and commercial production is expected to kick off in 2022.

The fab is expected to rank as the largest investment ever made in the country.

Lin said that the timeframe for the bureau to complete an environmental impact assessment report for TSMC's newest investment plan is expected to meet TSMC's demand to start mass production by 2022.

In a statement, TSMC said that the investment plan was finalized after "careful evaluation," adding that the company "recognizes and is grateful for the government's clear commitments to resolving any issues, including land, water, electricity and environmental protection."

Lin noted that when an environmental impact assessment will be done and whether water and electricity supplies will be sufficient will be the critical issues.

He said that the Ministry of Economic Affairs will be in charge of water and power supply for TSMC's new plant. About half of the water supplied to TSMC's new plant will come from recycled water, while tap water will make up the other half, according to Lin.

Construction of a water recycling plant located in Yongkang District of Tainan City is underway and other water recycling facilities near the new plant are being planned to meet TSMC's needs.

As for power consumption, Lin said that Premier Lai Ching-te (賴清德) has promised to supply sufficient electricity to TSMC. Lin added that TSMC would probably not have made such an important investment announcement if the company had failed to secure a firm promise from the government.

Before Friday's announcement, the market had speculated that TSMC would build such a sophisticated plant outside Taiwan, including in the United States, amid worries over adequate water and power supply.

"Now, it turns out that TSMC is willing to stay in Taiwan. The move will be economically positive to the country," Hua Nan Securities analyst Kevin Su said.

Dachrahn Wu (吳大任), director of the Research Center for Taiwan Economic Development of National Central University, agreed, saying that Taiwan needs massive investments to boost its economy to offset the impact resulting from possible weakness in global demand in the future.

Similarly optimistic, Gordon Sun (孫明德), director of the Taiwan Institute of Economic Research's Economic Forecasting Center, said that TSMC's purchases of production equipment and its hiring for the new plant as well as future exports of its products will no doubt benefit Taiwan's economy.

Some market analysts said TSMC's investments are expected to prompt its suppliers at home and abroad to pour funds into Taiwan to roll out products to meet the demand from such an important client.

Before TSMC's announcement, DRAM maker Winbond Electronics Inc. (華邦電) announced earlier this week that it will spend NT$330 billion to build a 12-inch memory chip plant in Kaohsiung, also in the south.

Lawmaker Chen Chi-mai (陳其邁) said that TSMC's latest plan is expected to help Tainan and Kaohsiung build a high-tech development belt in a bid to boost Taiwan's global competitive edge.

In Kaohsiung, Advanced Semiconductor Engineering Inc. (日月光), the world's largest integrated circuit packaging and testing service supplier, currently operates a broad production base. 

(By Chang Jung-hsiang, Tasi Yi-chu, and Frances Huang)
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