∣Insight Kaohsiung ∣The Formation of Kaohsiung's Semiconductor and AI Industry Ecosystem is Imminent

The recent surge of news has sparked widespread discussion about the development of Kaohsiung's AI and semiconductor industries. Can this truly lead to the formation of a new industrial cluster?

On June 4th, at Computex 2024, Foxconn Chairman Young Liu announced that the company will collaborate with NVIDIA to establish an advanced computing center in Kaohsiung, centered around the "superchip" GB200 servers. This computing center, located in the Kaohsiung Software Park, will feature a hardware configuration of 64 cabinets and 4,608 CPUs, and is expected to be completed by 2026. This initiative is set to ignite a wave of AI industry development in Kaohsiung.

On June 6th, Minister of Economic Affairs Kuo Jyh-huei visited the Kaohsiung Software Park to assess the progress of the Southern AI Eco-Park establishment, investment and recruitment efforts by major semiconductor companies in Kaohsiung, and the supercomputer project being established by NVIDIA and Foxconn.

The recent news has sparked a surge of discussions regarding the development of AI and the semiconductor industry in Kaohsiung. To evaluate whether these initiatives can truly foster a new industrial cluster, we examine the following:

In the semiconductor corridor, the Nanzih Technology Industrial Park in the Nanzih District has already attracted ASE, which possessed the advanced packaging, testing, and materials capability; the another under-construction Nanzih Industrial Park will host TSMC's 2nm advanced process plant, with further expansion planned. Lite-On has established its first and second plants and an R&D center in Kaohsiung; Dutch semiconductor equipment manufacturer ASML has leased commercial offices in northern Kaohsiung. Other semiconductor-related companies, such as Winbond, German Merck, American Entegris, Yageo, Elan, and Win Semiconductor, have also set up factories in Kaohsiung.

In the AI sector, the Asia New Bay Area, centered around the Kaohsiung Software Park, has attracted Compal's 5GAIoT R&D Center, PCBG R&D Center, and Wistron's automotive, industrial control, and medical display module R&D offices. Foxconn has established a software R&D center in the Foxconn Building in the Kaohsiung Software Park; NVIDIA's supercomputer Taipei 1 and future expansion R&D center are also located here. Other companies such as computer vision AI company Kneron, global leader in server management chips Aspeed, and AI chip R&D company Skymizer have signed investment agreements with Kaohsiung, using the city as their southern expansion base.

To meet the growing demand, the Industrial Park Administration of the Ministry of Economic Affairs continues to promote the second phase construction of the Kaohsiung Software Park and the Asia Bay Innovation Park 2.0. The second phase of the Kaohsiung Software Park has already commenced continuous underground wall construction, with the main structure expected to be completed by 2025 and the entire project by October 2026. The operation license is expected to be obtained by December of the same year. Given the influx of technology companies into Kaohsiung and the shortage of Grade A commercial offices, the second phase of the software park is highly anticipated.

Overall, the semiconductor and AI industry ecosystems in Kaohsiung are gradually taking shape. With more companies establishing operations and infrastructure improvements, Kaohsiung is poised to become an important technology and industrial hub in Asia in the near future.