Driven by AI boom, TSMC to invest $2.9 bln in advanced chip plant in Taiwan

Driven by a surge in demand for artificial intelligence, Taiwanese chip maker TSMC (2330.TW) plans to invest nearly T$90 billion ($2.87 billion) in an advanced packaging facility in northern Taiwan, the company said on Tuesday.

“To meet market needs, TSMC is planning to establish an advanced packaging fab in the Tongluo Science Park,” the company said in a statement.

CEO C.C. Wei said last week that TSMC is unable to fulfil customer demand driven by the AI boom and plans to roughly double its capacity for advanced packaging – which involves placing multiple chips into a single device, lowering the added cost of more powerful computing.

For advanced packaging, especially TSMC’s chip on wafer on substrate (CoWoS), capacity is “very tight,” Wei said after the company reported a 23% fall in second-quarter profit.

“We are increasing our capacity as quickly as possible. We expect this tightening will be released next year, probably towards the end of next year.”

The world’s largest contract chipmaker said TSMC’s position as the leading manufacturer of AI chips – including for chip designers Nvidia Corp (NVDA.O) and Advanced Micro Devices (AMD.O) – has not offset broader end market weakness as the global economy recovers more slowly than it had expected.

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