Media: Taiwan's Semiconductor Nitrogen Demand Booms, Air Liquide in Taiwan Reaps Profits from Dual AI and Semiconductor Trends

The French "Air Liquide Group," a long-established player in Taiwan’s market, is leveraging growing global interest in artificial intelligence to drive demand from its semiconductor clients in Taiwan. To meet this surge in demand, the company is expanding its production capacity in Taiwan.

If nitrogen supply were to be interrupted, everything would come to a halt: In Taiwan, the French industrial gas giant Air Liquide is capitalizing on both the semiconductor boom and the AI revolution.

Amid the gray, humid skies at the heart of Taiwan’s “Semiconductor Valley” in Hsinchu, these industrial complexes stand out. Cranes and excavators tirelessly work among bamboo groves and banana trees, ensuring that TSMC’s “Fab 20” facility rises on schedule—a powerhouse responsible for producing approximately 80% of the world’s processors.

To build this new factory dedicated to manufacturing 2-nanometer (nm) chips—the cutting-edge technology of the industry—local authorities relocated a temple in record time and leveled hills. A new highway was even constructed to prevent severe traffic congestion once the factory operates at full capacity.

A Trillion-Dollar Market

Meanwhile, Air Liquide is leaving no stone unturned to prepare. The company’s white towers, used to separate nitrogen and oxygen from air, are now fully installed.

Though not publicly disclosed, TSMC—undoubtedly one of Air Liquide’s largest customers in Taiwan—is an industry leader. The French conglomerate has been operating in Taiwan for four decades, providing clients with so-called “carrier gases” and essential innovative molecules crucial to chip manufacturing. These gases are used both to purify cleanroom environments and to etch processors themselves.

Thus, Air Liquide is fully capitalizing on the explosive growth of generative AI, which has triggered a massive spike in chip demand and propelled Taiwan’s industry to new heights. It is projected that Taiwan’s GDP will grow by 9% in 2025, making it one of the strongest performers globally.

“Over the past decade, our electronics business has doubled in size and now accounts for 9% of our global revenue. This growth is largely driven by AI and issues related to sovereignty,” noted Amel Le Vieur, Innovation and Technology Director at Air Liquide.

Guillaume Coté, Vice President of Air Liquide’s Electronics Business, stated: “The semiconductor market has now surpassed $1 trillion, and since the emergence of AI, growth momentum has intensified. This includes both volume and value effects—chip prices are rising because production capacity cannot keep up with demand.”

The AI Boom

In this context, Air Liquide has been forced to significantly ramp up its gas output. Currently, about ten projects (spanning all sectors) are under construction in Taiwan, with the total number of projects expected to reach around 70. In Hsinchu, Air Liquide is building a plant that will supply nitrogen and hydrogen to semiconductor manufacturers. The project involves an investment worth hundreds of millions of euros.

Additionally, further south in Taichung, Air Liquide held a groundbreaking ceremony on Wednesday for a 20,000-square-meter facility attended by numerous clients. This plant will begin producing molecules for chip manufacturing later this year.

Final Decision to Build in Taiwan

While Air Liquide already operates 10 similar molecule factories worldwide, Taiwan previously had none. Before this decision, to supply these “special materials” to Taiwanese clients, Air Liquide had to transport them via sea or air from other facilities located in Asia, Europe, or the U.S.—exposing itself to geopolitical risks and price volatility. The explosive rise of AI and concerns over sovereignty ultimately prompted the company to make the final decision to build in Taiwan.

“We could have simply produced everything in the U.S. But since the pandemic, our clients have wanted our factories to be as close to them as possible,” explained Guillaume Coté. This localization philosophy has been taken to extremes: in Hsinchu, bulk gases are delivered directly to customers through underground pipeline networks.

The molecules themselves are transported in tanks—metal containers installed on-site by clients. Every step, from production to delivery, is strictly controlled. “If nitrogen supply is interrupted, everything stops,” summarized Guillaume Coté.

Currently the Largest French Investor in Taiwan

Since 2019, Air Liquide has invested €1 billion in Taiwan. It is not the only industrial giant accelerating expansion in Taiwan. According to a press release, in 2022—the same year ChatGPT was launched—its American rival Air Products invested $400 million in two new facilities in Taiwan to serve a major local chipmaker.

Germany’s Linde Group invested $600 million between 2015 and 2020 to expand its capacity. However, Air Liquide claims to be the only company capable of supplying all gases required for electronic products. Regardless, it is currently the French company investing the most in Taiwan—its investments exceeding €1 billion since 2019.

Yet, the rapid development of AI also demands adjustments. Air Liquide must rapidly develop its molecular products, just as semiconductor manufacturers continuously push the boundaries of electronic technology to create ever-smaller chips. Audrey Pinchart, Taiwan Sales Director at Air Liquide, said: “Our molecular products can be brought to market within 6 to 12 months—far faster than in the pharmaceutical industry!”

The group must also be ready to respond immediately to any customer demand spikes. That’s why Air Liquide chose a sufficiently large site in Taichung, allowing for future capacity expansion if needed. With the groundbreaking on Wednesday, May 25th, and if one believes in traditional Taiwanese customs—where gifting a pineapple symbolizes auspiciousness—this good fortune may soon arrive.

Source: rfi

Original article: toutiao.com/article/1860833734500360/

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the official stance of the publication.