Taiwan's government decided five years ago to expand science park development after concluding that the US-China tech war would not end soon, laying the groundwork for the Third Kaohsiung Science Park (KSP), also called the Nanzih Science Park (NSP), under the Southern Taiwan Science Park (STSP) Bureau. The Nanzih project is now under environmental review and, if approved, is expected to support semiconductor production, generate NT$960 billion (approx. US$30.46 billion) in annual output, and create 6,600 jobs.
The proposed NSP located is estimated to require NT$57 billion in development spending. According to the government, the expansion is meant to help support TSMC and other manufacturers' capacity growth in Taiwan as global chip competition intensifies.
The Ministry of Environment held a second-stage environmental impact assessment scoping meeting for the NSP development plan in April. Some experts have suggested that the government should draw up alternatives for the location of the new park, but the land selected for the Nanzih project, which spans more than 182 hectares, is more readily available. The land is mostly publicly owned or owned by the state-run petroleum firm CPC Corporation. For the government, alternative plans are unlikely.
According to official explanations, the Executive Yuan has already approved the establishment of the Second Kaohsiung Science Park, also called the Ciaotou Science Park, as well as the third-phase expansion of Tainan Science Park and new science parks in the neighboring counties of Pingtung and Chiayi. But those plans still cannot meet the land, utilities, and other requirements for semiconductor fabs, which is why the government must spend another NT$57 billion to develop the Nanzih site.
The Southern Taiwan Science Park Bureau said in a public notice that the Nanzih park project was based on the Executive Yuan's 2021 policy in response to Taiwan's needs to advance its semiconductor R&D and talent deployment amid the US-China tech war. At the time, the US and China were locked in a trade and technology conflict, and then-US President Joe Biden introduced the Chips and Science Act to attract TSMC to build fabs in the US.
Senior officials concluded that Taiwan needed to become a stronger backer of the semiconductor industry and do as much as possible to meet companies' needs for land, power, water, and talent for local investment. In TSMC's case, the company's best location for yield, cost, and efficiency is Taiwan, not other countries, leaving no reason for the government not to support expansion by TSMC and other chipmakers locally.
After the Nanzih Science Park plan was proposed by the National Science and Technology Council, the Executive Yuan endorsed it in July 2023. In July 2025, the Executive Yuan approved the first revision to the park's establishment plan, expanding its budget from NT$43 billion to NT$57 billion, which will be fully covered by the science park bureau's operating fund budget.
A response to the US-China tech war
A 2021 report submitted by the NSTC's Office of Science and Technology Policy (OSTP) on Taiwan's semiconductor development under the US-China tech war noted that the US government planned to spend US$50 billion to support chip manufacturing, while the EU was also seeking to enter the chip manufacturing market with aims to produce 20% of the world's advanced chips by 2030. Against that backdrop of competition, Taiwan planned to break through in manufacturing, talent, technology, and resources.
On the industrial level at the time, according to the report, Taiwan's policy aimed to expand its advantage in wafer manufacturing, strengthen the semiconductor cluster linking Hsinchu Science Park (HSP), Central Taiwan Science Park (CTSP), and STSP along the "Silicon Corridor" on the island's west coast, and upgrade standard factory buildings in HSP's third through fifth phases. It also sought to ensure a stable supply of land, water, electricity, materials, and talent.
On the national level, the policy focus was on securing semiconductor talent, including the joint establishment of three to five semiconductor R&D centers by companies and universities, the creation of one or two national key-field research colleges at selected universities, and a 10% increase in undergraduate places and 15% increase in master's and doctoral places in key areas such as semiconductors, machinery and materials, along with relaxed student-to-faculty ratios.
Taiwan also planned to recruit international talent through a semiconductor international industry-academia alliance. In practice, due to strong corporate donations, Taiwan already has five semiconductor key-field research colleges and two AI colleges, exceeding the original policy target.
Article translated by Rodney Chan and edited by Jack Wu
