Formosa Plastics Group Plans to Invest NT$29.2 Billion to Diversify into Semiconductor Chemicals and Other New Areas
Alina Collins
Formosa Plastics is spending NT$29.2 billion to push into semiconductor materials, green energy, and healthcare — a legacy petrochemical giant betting its next chapter on the chip supply chain.
Where is the money going?
Formosa Plastics plans to develop 27 new products across three areas: semiconductor chemicals, green energy, and healthcare.
The semiconductor portion is the most concrete — electronic-grade hydrogen, ammonia, hydrochloric acid, sulfuric acid, plus photoresist thinners and ruthenium ALD precursors (a key raw material for chip thin-film deposition).
In plain terms = Formosa is not making chips. It is making the chemicals you need to make chips — positioning itself upstream in the supply chain.
How far has Formosa gone in the chip supply chain?
An affiliate's 12-inch silicon wafer fab began production in Q4 2025. Advanced-node shipments continue to ramp.
The fab is already contributing equity-method investment income to Formosa — meaning it is already profitable.
Parallel expansions include electronic-grade HF capacity, ammonium fluoride upgrades, and a Phase 2 build-out of electronic-grade isopropanol recycling.
This reflects a company that is not testing the waters but scaling across multiple product lines at once.
What drove the Q1 earnings?
Q1 2026 consolidated pretax profit reached NT$3.3 billion, with pretax EPS of NT$0.53.
Two drivers: higher petrochemical prices after Middle East supply disruptions + rising equity-method investment income.
This means → the profit improvement came more from an external supply shock than from a shift in Formosa's own product mix.
Can Q2 keep the momentum?
Management expects Q2 profit to be significantly higher than Q1, citing three reasons: crude prices holding firm, low-cost inventory supporting margins, and rising equity-method income from Formosa Petrochemical and U.S. operations.
Put simply = the cheap feedstock bought in Q1 has not been used up yet. Selling it at Q2 prices means fatter margins.
What is the biggest variable for H2?
Formosa's view: even if the U.S.–Iran standoff is resolved through negotiation, Middle Eastern energy and petrochemical facilities have sustained heavy damage. Near-term capacity recovery is limited.
This means → the chronic overcapacity plaguing Asian petrochemicals could ease temporarily as Middle Eastern output stays depressed.
Infrastructure spending in India and Vietnam is also cited by management as a potential tailwind for H2 sales.
This reflects an optimism built on one premise: the Middle East supply crunch is not a short-term event.
Content is for reference only, not financial advice.