TSMC supplier Merck Electronics is set to open a chemical plant in southern Taiwan by next year.

The German company has begun the qualification process for its €500 million ($581m) plant in Kaohsiung. This involves rigorous quality checks of the plant’s chemicals and materials.

The 150,000 sqm (1.6 million sq ft) Kaohsiung facility will produce “specialty gases and semiconductor materials for thin film and patterning solutions.” It has been under construction since February 2023, and mass production is scheduled to begin next year.

Merck CEO Kai Beckmann said that the new plant will be able to meet 80 percent of local demand for thin film materials, as well as 50 percent of local demand for materials overall.

Most of TSMC’s suppliers in Taiwan have factories on the island. Merck already operates a facility in Kaohsiung, which produces delivery equipment for the safe handling of gases and chemicals used in the semiconductor industry.

Managing director of Merck Taiwan, John Lee, added that the new plant would help the “local self-sufficiency rate to continue to increase from currently more than 50 percent.”