Merck, one of the world's leading semiconductor materials suppliers, announced on November 28 that the first phase of its new Kaohsiung Semiconductor Technology Flagship Campus has officially begun operations. The site marks Merck's first large-scale flagship materials campus worldwide and represents the company's largest single electronics-related investment to date. With rising demand driven by AI, advanced nodes, memory, and high-performance computing, the new campus is designed to strengthen Taiwan's local supply chain and boost the resilience of the global semiconductor ecosystem.

According to Merck, the campus covers roughly 150,000 square meters. The company plans to invest €500 million over five years—about NT$17.3 billion—to produce critical materials for next-generation logic, memory, and AI chips, including Thin Films, Specialty Gases, and Formulation materials. These materials support essential processes such as cleaning, etching, deposition, patterning, doping, and advanced packaging, and are considered foundational for sub-2-nanometer technologies.

James Lee, Chairman of Merck Taiwan, said the surging demand for AI and high-performance chips is fueling a new growth cycle in the semiconductor industry, with Taiwan playing an indispensable role. Merck currently meets around 50% of its Taiwan customers' materials demand locally. With the first phase now online, the company expects to further increase its localization capabilities and fill long-standing supply gaps in upstream materials for advanced manufacturing.

Lee noted that the Kaohsiung campus integrates materials, equipment, and metrology technologies into a unified front-end support ecosystem. In addition to producing precursors, specialty gases, and formulation materials, Merck will leverage its Delivery Systems & Services (DSNS) team to provide end-to-end integration covering supply equipment, system installation, and on-site technical support. Through recent acquisitions, Merck has also strengthened its metrology and inspection capabilities, enabling more comprehensive process verification, advanced packaging support, and yield improvement solutions.

Merck is one of the few global suppliers capable of supporting six major semiconductor process segments through vertically integrated capabilities spanning materials, equipment, and metrology. The new flagship campus will operate together with Merck's existing Kaohsiung Plant 1—located just 300 meters away—to create a consolidated production cluster across thin-film materials, specialty gases, and formulations.

The new facility is expected to create more than 150 high-tech jobs and serve as a major hub for customers in Taiwan and the broader Asia-Pacific region. Merck said deeper localization of materials, equipment, and metrology will reinforce Taiwan's strategic importance in global chip manufacturing.

The launch marks only the first phase of development. Lee said Phase 2 remains in planning, with no confirmed timeline, and roughly 40% of the site has been reserved for future expansion. He emphasized that Merck's Taiwan roadmap is built for the long term, with flexible capacity planning to support structural materials growth driven by AI and advanced process technologies.

In terms of sustainability and smart manufacturing, the campus incorporates fully digitalized management, predictive maintenance, and digital-twin technology to simulate processes before mass production, improving development and validation efficiency. The site meets LEED Gold green-building standards and uses renewable energy, rainwater recycling, and energy-efficient systems. Merck aims to achieve RE80—80% renewable energy usage—by 2030.

Industry-wide, demand for advanced materials continues to rise, fueled by HBM, high-performance AI GPUs, advanced packaging, and sub-2-nanometer nodes. Lee expects the global semiconductor materials market to grow at a compound annual rate above 20% between 2024 and 2030, with HBM potentially exceeding 30%. "AI-driven growth is far beyond any previous cycle, and Taiwan is absolutely a central player in this transition," he said.

He added that AI's impact extends far beyond semiconductors, transforming sectors from manufacturing and agriculture to finance and healthcare. Ensuring a reliable supply of upstream materials will be essential for Taiwan to maintain its technological leadership. Merck's expansion in Taiwan, he said, is aimed at supporting long-term demand driven by the AI era.