TSMC to Build New $2.9B Chip Plant in Taiwan Amid Soaring AI Demand

Taiwan Semiconductor Manufacturing Company (TSMC) is committing $2.9 billion to a new advanced chip packaging plant in Taiwan, aiming to capitalize on surging global demand for AI chips and to support major clients like Apple.

On Tuesday, July 25, TSMC confirmed to CNBC that it would invest around $2.9 billion or $90 billion in New Taiwan dollars. The Taiwanese semiconductor manufacturing firm acknowledged last week that there is a very high demand for AI chips, so it will take steps to ensure it can supply.

TSMC is a leading manufacturer of advanced processors, and some of its clients include Apple Inc. This means its chips are being used on iPhones, Macs, and iPad devices.

The company’s newest investment was triggered by the rapid development of the AI market today, and this growth caused a surge in demand for the Taiwanese chipmaker’s advanced packaging. TSMC said the plant is set to be built in Tongluo Science Park and expects to generate around 1,500 new jobs for the locals.

“For AI, right now, we see a very strong demand. For the front-end part, we do not have any problem to support,” C.C. Wei, TSMC’s chief executive officer, said in a statement. “We are increasing our capacity as quickly as possible, and we expect that these tightenings will be released next year, but in between, we’re still working closely with our customers to support their growth.”

In a separate press release, TSMC’s vice president and chief financial officer, Wendell Huang, also commented previously, “Our second quarter business was impacted by the overall global economic conditions, which dampened the end market demand, and led to customers’ ongoing inventory adjustment. Moving into the third quarter of 2023, we expect our business to be supported by the strong ramp of our 3-nanometer technologies, partially offset by customers’ continued inventory adjustment.”

Photo by: Briáxis F. Mendes (孟必思)/Wikimedia Commons (CC BY-SA 4.0)