US chip supplier Entegris is optimistic on Taiwan despite tensions with China

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The top US supplier of chipmaking materials, Entegris, says it is committed to investing in Taiwan as it will open the company’s “most advanced” manufacturing center on the island, despite geopolitical tensions surrounding Taiwan’s main economy. chips of Asia.

“Our investment is just a sign of the belief we have in the future of the semiconductor industry in Taiwan,” Bertrand Loy, president and chief executive officer of Entegrishe told Nikkei Asia ahead of the grand opening of his $500 million facility in Kaohsiung, southern Taiwan.

“This is the largest investment ever in the history of this company and the important news is that this will be our most advanced manufacturing facility. . . If you want to get to 2 nanometers, 1 nanometer [chips] or not, the best filters will be made in Taiwan.”

The smaller the nanometer size, the more advanced and powerful the semiconductors. Currently, the world’s leading chip makers – Taiwan Semiconductor Manufacturing Co, Samsung Electronics and Intel – are racing to produce cutting-edge chips of 3 nanometers and below.

Entegris is the world’s leading supplier of advanced filters and containers required to ensure the purity of chemicals and liquids used in chip and display manufacturing. Such materials are becoming increasingly critical as semiconductor manufacturing becomes more sophisticated, with less room for defects.

Counting TSMC and most other chipmakers around the world as customers, Entegris would make the company’s most advanced filters, housings and dielectric materials in Taiwan, according to Loy. The chief executive said the company would also expand its team in Taiwan from about 700 employees to more than 1,000. The new facility is entering trial production and qualification will run through the second half of 2023. Mass production is expected to begin in 2024.

This article is taken from Nikkei Asia, a global publication with a uniquely Asian perspective on politics, economics, business and international affairs. Our correspondents and external commentators from around the world share their insights on Asia, while our Asia300 section provides in-depth coverage of 300 of the largest and fastest-growing publicly traded companies from 11 economies outside Japan.

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Loy said it made more sense to build chip-making materials production sites near global chip hubs such as Taiwan, South Korea, the United States, and Japan that are committed to developing cutting-edge semiconductor manufacturing technologies. rather than in regions that focus on less advanced nodes, such as Europe and India.

“If you don’t have that commitment to the cutting edge [chip] process, then yours [chip plants] it can most likely be satisfied with older generation products,” said Loy. “And it means you can be supplied from virtually anywhere in the world.”

He said this is why the company had no plans to produce chip materials in either Europe or India, despite these economies ramping up their chip production levels.

Loy also said the company has taken into account geopolitical tensions between China and Taiwan and that it plans to add more redundant capacity to its Colorado Springs site in the United States.

“Business continuity plans have always been an important consideration, and this one [should be in place] for all of our strategic products,” the chief executive said, adding that the company hopes to manufacture all of its key products in at least two locations to increase supply chain resilience.

The semiconductor industry has learned many lessons from unprecedented supply chain constraints in recent years, Loy said.

China sees Taiwan as part of its territory and does not rule out forcibly taking control of the democratically governed island. Since former US House Speaker Nancy Pelosi visited Taipei last summer, Beijing has conducted several live military exercises around Taiwan and escalated the tension.

As for the chip industry’s current downturn, Loy said he isn’t “overly concerned” despite expectations that the industry’s outlook will remain unclear until later this year or even 2024.

“There is quite good evidence that we will hit rock bottom [of the downturn] In the [second] quarter. But the rate and pace of the recovery remains quite uncertain,” he said. In previous recessions, “you have no visibility and then suddenly it starts going up really fast. So, I’m not overly concerned about the lack of visibility because it’s not at all a novelty”.

A version of this article was first published by Nikkei Asia on May 10, 2023. ©2023 Nikkei Inc. All rights reserved.

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