Taiwanese chipmaker TSMC has announced plans to build a nearly T$90 billion ($2.87 billion) advanced chips fab as the company races to keep up with the artificial intelligence (AI) boom.
The world’s largest contract chipmaker said last week it was unable to fulfil customer demand driven by the surge in AI services.
CEO CC Wei had said TSMC 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 had 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 chipmaker will build the new advanced packaging fab in Taiwan’s northern county of Miaoli.
“To meet market needs, TSMC is planning to establish an advanced packaging fab in the Tongluo Science Park,” the company said in a statement.
The Tongluo Science Park administration has officially approved TSMC’s application to lease land, the company said, adding the new plant would create about 1500 jobs.
TSMC said last week its position as the leading manufacturer of AI chips – including for chip designers Nvidia and Advanced Micro Devices (AMD) – has not offset broader end market weakness as the global economy recovers more slowly than it had expected.
Even as the leading Apple supplier ramps up its expansion abroad, it plans to keep its most advanced chip technology in Taiwan, a global powerhouse in manufacturing semiconductors that power everything from smartphones to electric vehicles.
- Reuters, with additional editing by Vishakha Saxena