Taiwan Revives Longtan Science Park Expansion That Could Host Five TSMC Fabs for 2nm Chips
Taiwan's government has restarted work on the long-delayed Longtan Science Park expansion in Taoyuan, a project that could clear the way for Taiwan Semiconductor Manufacturing Co to build five new fabrication plants for its most advanced chips. The Hsinchu Science Park Administration first proposed the expansion more than three years ago, only to watch it collapse under resident opposition. Now it is back on the table, and the world's largest contract chipmaker is watching closely.
The plan would add about 104 hectares to the park, with 46 hectares set aside for business use, according to details disclosed at public hearings. The National Science and Technology Council estimates the development could create roughly 6,200 jobs and generate annual output of about NT$310 billion, or US$9.6 billion. The council sent its proposal to the Executive Yuan in June, and the National Development Council is reviewing it.
A Town That Said No, Then Changed Its Mind
Longtan's story is a study in how quickly chip economics can shift local sentiment. The original blueprint, presented at a July 2023 public hearing, covered 158.59 hectares with 80.66 hectares for businesses. The problem: 88 percent of the land earmarked for expropriation sat in private hands. Residents formed a self-help group, staged protests at the Presidential Office and the Executive Yuan, and the friction got loud enough that TSMC walked away in October 2023, saying it would put its advanced manufacturing money into Kaohsiung and other cities instead.
TSMC kept building elsewhere in Taiwan, and the results were visible. A source familiar with the matter told the Taipei Times that after losing Longtan, the company built fabs in Tainan, Kaohsiung and Chiayi County, and those investments lifted local economies. That track record changed minds in Longtan. "Some said that, without TSMC, their land would only be good for growing tea leaves," the source said.
The project shrank to 89.63 hectares in 2024 as administrators tried to win over holdouts, then grew slightly to 104.19 hectares after some residents who had opposed the plan reportedly flipped. Two more public hearings followed. The administration and the Taoyuan City Government kept talking to residents through it all, betting that a fab campus's wages and tax base would eventually look better than farmland.
What Happens Next
Approval is not a done deal. The National Development Council's review comes first, and it will be followed by environmental impact assessments, land-use changes and land acquisition. The NSTC says the related work could be wrapped up by the end of 2029, with park infrastructure construction starting in 2030. Water and power needs have been assessed in preliminary form, and officials say they will keep working on compensation and relocation packages for affected residents.
If the project clears those hurdles, TSMC would get room for five fabs producing 2-nanometer or smaller chips — the nodes every major AI accelerator customer wants. That is why this particular expansion matters more than a typical science park filing.
The Demand Behind the Expansion
TSMC's need for land is not hypothetical. The company reported June revenue of NT$442.68 billion, up 67.9 percent from a year earlier and 6.2 percent from May, and first-half revenue of NT$2.4 trillion, or about $75 billion, a 35.6 percent jump. SemiAnalysis analyst Sravan Kundojjala told CNBC the second-quarter result beat the company's high-end guidance of $40.2 billion, and he called out the core imbalance: "The demand supply situation in AI is still quite tight and TSMC is sold out on N3, which is targeted by all leading AI GPU and CPUs this year."
TrendForce's early-August report, summarized by Venture Atlas, says TSMC is on track to hit 180,000 3nm wafers a month by early in the fourth quarter — two to three months ahead of its earlier schedule — with Nvidia, AMD and Broadcom among the customers pushing it. The same report puts 2nm capacity at 100,000 wafers a month by the end of the year. TSMC raised its 2026 capital spending guidance to $60-64 billion in July, a record, and Counterpoint Research data from earlier this year gave the company a 73 percent share of the pure-play foundry market.
Most of that output is heading into AI hardware. Kundojjala estimates TSMC's AI-related chip revenue will top $40 billion in 2026, close to a quarter of its total. When a foundry is sold out on its most advanced node and still adding capacity in Arizona, Japan and southern Taiwan, a five-fab site inside its home market gives it a place to put the next wave.
The June print also broke a seasonal pattern. Revenue normally dips from May to June; instead it climbed 6.2 percent month on month, a move Kundojjala flagged as unusual because June had declined sequentially in each of the previous four years. SemiAnalysis' estimate on the quarter is blunt: TSMC beat the top end of its own $40.2 billion guidance, and the company has not publicly signaled any cooling in orders since. Bookings for 2nm, still a year or more from volume, are already stacking up, which is why executives keep telling investors the AI cycle runs for years, not quarters.
The Fab Map Keeps Spreading
Longtan would slot into a network that is stretching in every direction. In Japan, TSMC's Kumamoto fab returned to full operation this month after a magnitude-7 earthquake shook the region in late July, and a second Kumamoto fab using 3nm is slated for mass production in 2028. In Chiayi, the company is adding two advanced packaging plants, with the first already in mass production and the second close behind. Kaohsiung and Tainan absorbed what Longtan lost in 2023, and Arizona remains the centerpiece of its US expansion.
The pattern is simple: advanced logic on Taiwan's west coast, specialty and 3nm in Japan, packaging in Chiayi, and a growing US presence — all chasing the same AI demand curve. Longtan's five fabs would deepen the domestic base at a moment when customers are asking for more 2nm capacity than TSMC can currently build.
The politics still have to cooperate. Land compensation is a live issue, the environmental review is untouched, and the National Development Council has not set a decision date. But the fact that the project is moving again, after residents spent years fighting it, says as much about the AI boom as any revenue chart does. Semiconductors coverage will track what happens when the review lands.
A Bigger Bet on Advanced Nodes
Look at the numbers and the timing together, and the stakes get clearer. TSMC spends more than any chipmaker in history on new capacity, yet analysts still describe the leading edge as sold out. Longtan's 46 hectares of business land may not sound like much, but five fabs at 2nm and below would add tens of thousands of wafer starts a month at a node where every slot is spoken for years in advance.
The local calculus has shifted too. Taoyuan watched neighboring regions collect fab wages, supplier factories and tax revenue while Longtan kept its tea fields. The self-help group that once marched on the Presidential Office no longer speaks for the whole town, and administrators say compensation discussions are ongoing. Whether the remaining holdouts can be satisfied is the open question.
For now, the timeline gives everyone room to work: review through 2026, environmental and land processes through 2029, construction from 2030. Five fabs would not come online at once; they would ramp as the market demands. The AI chip pipeline that begins with these decisions will feed data center buildouts for the rest of the decade.
Read the original report from the Taipei Times, CNBC's breakdown of TSMC's June revenue, and TrendForce's ramp forecast via Venture Atlas.
