TSS Semiconductor Alliance, a group of 18 small and medium-sized Taiwanese suppliers of semiconductor materials, components and equipment, is preparing to form a third cohort as members seek to expand their role in global chip supply chains.
The group has brought front-opening unified pod, or FOUP, systems into the substrate industry. The solution has entered the supply chains of Taiwan's three major substrate makers and was later adopted by Intel.
The planned cohort, TSS3, comes as AI-related demand accelerates and the cost of overseas expansion remains high for smaller suppliers.
FOUP push demonstrates alliance model
TSS said trust among members has turned the alliance from a platform for customer referrals and shared access to expensive testing facilities into a group capable of joint product development.
Taiwan's substrate industry had not previously adopted FOUP systems. When end customers requested the technology, it was difficult for any single supplier to provide a complete solution on its own.
Gudeng supplied the FOUP carriers, Asia Neo Tech provided cleaning and drying equipment, and Symtek Automation Asia handled automated transport and system integration, according to TSS.
Through that joint approach, the group shipped the solution to Taiwan's three major substrate makers and later exported it to Thailand, South Korea and Vietnam. The solution was eventually adopted by Intel.
Localization remains priority
As TSS expands overseas in response to geopolitical risks and customer demand, some observers have questioned whether Taiwanese suppliers could be moving too quickly if US policy shifts after a presidential election or if international tensions ease.
TSS does not expect the direction of US policy to change fundamentally because of an election, especially as semiconductors have become a core national security issue.
The group sees geopolitical de-risking as a long-term trend. In the AI era, chips are viewed as central to AI development, and the US has placed semiconductors among its highest national security priorities.
Future US administrations may be able to create a more reasonable manufacturing environment to achieve those policy goals more efficiently, TSS said.
The development model for AI servers and chips has also changed from the past, when production was moved largely for cost reasons to regions with abundant labor and land. Rising Western concerns over information security and cybersecurity have changed that calculation.
Taiwan's ability to capture AI-related demand is partly tied to a "trust premium" from Western countries, according to TSS.
Materials risk seen limited
TSS also addressed whether geopolitical tensions could affect access to key semiconductor materials, disrupt its localization sites in the US and Japan, or affect material prices.
For key consumables such as chemical mechanical polishing pads, or CMP pads, the core value and technical barrier lie in back-end processing recipes rather than base materials such as ABS or PEEK.
Even if some base materials are subject to export controls, suppliers that control key recipe technologies are less likely to be constrained by a single supplier. TSS said its members have not been affected by such issues so far.
On pricing, trends are still mainly governed by customer contracts. In the current supply-constrained market, customers are more focused on whether suppliers can provide timely and effective localized support, the group said.
TSS Holdings was established in 2023 to respond to the semiconductor industry's shift toward global localization. After the alliance showed results, TSS2 was formed in 2025 with a focus on advanced semiconductor packaging.
As AI-related demand grows, TSS is now planning TSS3 to strengthen Taiwan's semiconductor supply chain position amid global geopolitical shifts.
Article translated by Sherri Wang and edited by Jerry Chen
