KAOHSIUNG CITY, Taiwan—ASE Technology Holding Co. Ltd., one of the world’s largest semiconductor testing and packaging firms, plans to build a highly advanced smart factory here, as the industry grapples with a labor shortage.

The new factory will be the first in the world to deploy a “5G millimeter-wave new radio-dual connectivity standalone” network to improve speed, stability and equipment efficiency.

“To counter the talent crunch and adapt to diverse customer requirements, ASE is accelerating its adoption of smart manufacturing technologies including automation,” the company said in a statement.

Chip companies in Taiwan have been rapidly expanding in recent years, spurred in part by a pandemic-induced surge in demand for chips. They face fierce competition from local and foreign companies recruiting from a shrinking pool of engineers.

To address the issue, Taiwan’s government last year partnered with industry to establish specialized “chip schools” to boost engineering talent on the island.

“We hope to lead by example and inspire more industry players to contribute to building a resilient global smart manufacturing and equipment cluster,” the company said.