Riding on the regionalization trend of semiconductor manufacturing, Poland is seeking a greater role in the global IC value chain. The Central European country comes under increasing spotlight following Intel's June announcement to build a packaging and test facility in Wrocław, Poland. The up to US$4.6 billion investment is considered one of the largest greenfield investments in Polish history and marks a milestone in the Polish bid to develop a regional semiconductor cluster. In the Polish city of Gdańsk, Intel has been operating its largest R&D facility in the EU since 1999, with expansion to be completed in 2023.
Taiwan, as a semiconductor manufacturing powerhouse, has naturally become a critical potential partner of Poland, especially as the island begins to seek deeper technology ties with Central European and Baltic countries like the Czech Republic and Lithuania. In May 2022, a Polish trade delegation visited Taiwan, followed by an MoU signed between Poland and Taiwan in September to establish the Taiwan-Polish working group on semiconductors, aiming to build a platform to deepen collaboration between government officials, R&D experts, business, academia, and education facilities.
Talking to DIGITIMES Asia, Cyryl Kozaczewski, director of the Polish Office in Taipei, indicated that Taiwan is Poland's seventh largest trading partner in Asia. He also pointed out that Poland is the largest EV lithium-ion battery manufacturer in the European Union (EU), while being the biggest manufacturer of electric buses in the bloc. As one of the major hydrogen producers in Europe, Poland is also seeking to build an industry oriented around green technologies.
In fact, Poland's automotive industry has underpinned its semiconductor strategy, and will continue to do so as the trend of vehicle electrification and Intelligentization becomes the main driving force of semiconductor industry growth. According to Kozaczewski, Universal Scientific Industrial Co. (USI), a subsidiary of the Taiwan-based semiconductor packaging and test leader ASE Technology Holding Co., has long been engaged with Poland's automotive sector. As a leader in SiP (system-in-package) modules, USI acquired its first manufacturing facility in Poland in 2018, and has just undertaken the construction of its second factory in Kobierzyce, near Wrocław in June, recognizing the region's growing demand. The backend facility is expected to significantly expand USI's production capacity and will be fully operational by the first quarter of 2024.
Apart from USI, leading Taiwan-based chipmaker MediaTek already set up a R&D facility in Warsaw, Poland in early 2023. Meanwhile, as revealed by Kozaczewski, in recent months TSMC has been searching for engineering talents in Poland. In response to the growing importance of silicon photonics, TSMC introduced its COUPE (COmpact Universal Photonic Engine) advanced packaging platform in 2021. Given Poland's strong competence in photonics, it remains to be seen if TSMC will establish ties with Poland's photonic cluster.
Alongside Taiwan-based technology companies, Japanese and South Korean companies have also had a long presence in Poland, according to the Director of the Polish Office in Taipei, who pointed out that there are approximately 300 investors from Japan and around 600 from South Korea. In the Tarnobrzeg Special Economic Zone, for example, where USI's new facility is located, one also finds the presence of South Korean companies like LG Electronics and Heesung Electronics, in addition to Japanese companies like Pilkington Automotive.
For the time being, Polish company VIGO Photonics has already started production of semiconductor materials in its factory near Warsaw with further plans to build in the coming years new production lines for its advanced products. VIGO Photonics will also be among the Polish companies featured in SEMICON Taiwan in September.
In the long run, Poland is setting its sights to become the new growth engine of Europe, leveraging the various advantages it enjoys, and policy incentives. To a certain degree, the entirety of Poland has become a Special Economic Zone: companies investing anywhere in the country can count on corporate tax exemptions. A government cash grant program is also in place that allows companies to receive support of up to 15% of eligible project costs in the case of strategic or innovative manufacturing projects. In the case of highly advanced service centers, up to 20% of eligible project costs can be covered. R&D tax relief is also on the plate: for expenses related to wages, equipment or the purchase of material intended for scientific research, companies can deduct up to 200% of eligible costs from their tax base and 250% in the case of R&D centers.
Above all, Kozaczewski highlighted the geopolitical stability offered by Poland as an investment destination, especially the security guarantee offered by the North Atlantic Treaty Organization (NATO). The director also noted the energy independence from Russia enjoyed by Poland, including the recently completed Baltic Pipe that secures gas supplies from the Northern Sea and long-term LNG contracts with Qatar and the US. Although the war in Ukraine left its marks in 2022 – Poland saw inflation reaching 14.4%, the highest recorded since 1997, as a result of rising energy and raw materials prices – the country's GDP in 2022 was almost 4.9% higher in real terms compared to 2021, despite the international turbulence.
Poland is ascending to be an integral part of Europe's semiconductor strategy, especially as Intel's Wrocław facility enters operation in 2027 in synergy with its Gdańsk R&D site and its advanced process fab in Magdeburg, Germany. Deepening cooperation with Taiwan is expected to further integrate Poland into the global semiconductor ecosystem.
Cyryl Kozaczewski, Director of the Polish Office in Taipei