TSMC is the leading manufacturer of the world’s most advanced processors, including the chips found in the latest iPhones, iPads and Macs.
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Taiwan Semiconductor Manufacturing Company plans to invest nearly 90 billion new Taiwan dollars (about 2.87 billion U.S. dollars) in an advanced chip packaging facility in Taiwan, the company told CNBC on Tuesday.
This comes at a time when global chipmakers are trying to capitalize on the artificial intelligence boom. TSMC admitted last week that there is strong demand for AI chips.
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TSMC is the leading manufacturer of the world’s most advanced processors, which include chips found in the latest iPhones, iPads and Macs.
The investment was prompted by “the rapid growth of the AI market,” which, according to a report by Taiwan’s official Central News Agency, “has sparked a surge in demand for TSMC’s advanced packaging.”
The facility will be located in Tongluo Science Park in northern Taiwan, TSMC said, adding that the investment is expected to create about 1,500 local jobs.
“We are currently seeing very strong demand for AI. For the front-end part, we have no problem to support it,” said CC Wei, CEO of TSMC, during the company’s second-quarter earnings report last week.
However, Wei said that TSMC has “some very tight capacity” in the field of advanced packaging.
“We are increasing our capacity as soon as possible and expect to release these tightenings over the next year. In between, however, we continue to work closely with our customers to support their growth,” he said Thursday.
Packaging is one of the last steps in semiconductor production. Chips are placed in a protective cover and the connections are made for installation in an electronic device.
The Central News Agency reported that TSMC’s packaging production capacity “is tight” as Nvidia and AMD compete for capacity. US-based chip giants Nvidia And AMD are two of TSMC’s largest customers.
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TSMC share price development
Nvidia buys high-bandwidth memory chips to fit into its latest A100 GPUs, which train OpenAI’s ChatGPT chatbot.
ChatGPT, an AI-powered language model, went viral because of its ability to generate human-like responses to user input.
“As TSMC rolls out its advanced packaging expansion plan, the market is optimistic that Wanrun, Hongsu and Xinyun will benefit from the operation of the equipment factories,” the report said, refers to companies that manufacture chip-related devices.
TSMC shares rose 1.97% in Asia on Tuesday.