In response to the surging demand for artificial intelligence, Taiwanese chip manufacturer TSMC (Taiwan Semiconductor Manufacturing Company) has announced a substantial investment of nearly T$90 billion (approximately $2.87 billion) to establish an advanced packaging facility in northern Taiwan. The decision comes as TSMC aims to meet the increasing market needs for AI-related technologies.
The advanced packaging fab will be located in the Tongluo Science Park, as stated in TSMC’s official announcement. This move comes after CEO C.C. Wei revealed last week that the company is struggling to keep up with the growing customer demand driven by the AI boom. TSMC’s plan includes doubling its capacity for advanced packaging, a process that involves integrating multiple chips into a single device, thereby reducing the cost while enhancing computing power.
Particularly for TSMC’s chip on wafer on substrate (CoWoS) technology, the capacity is currently under significant strain, according to Wei’s remarks following a 23% decline in second-quarter profit. However, the company is determined to address this limitation by ramping up its capacity expansion efforts rapidly. TSMC anticipates that this tight situation will be alleviated by the end of the following year.
While TSMC remains a dominant force in manufacturing AI chips for notable companies like Nvidia Corp and Advanced Micro Devices, the overall market conditions have been affected by a slower-than-expected global economic recovery.
The Tongluo Science Park administration has granted official approval for TSMC’s land lease application, and the new facility, to be located in the northern county of Miaoli, is projected to generate around 1500 job opportunities.
Despite TSMC’s plans to expand its operations abroad, the company intends to keep its most advanced chip technology within Taiwan. As a global powerhouse in semiconductor manufacturing, Taiwan plays a crucial role in producing chips used in various devices, ranging from smartphones to electric vehicles.
TSMC’s substantial investment in the advanced packaging facility reflects its commitment to meeting the increasing demand for AI-related technologies while solidifying Taiwan’s position as a key player in the semiconductor industry. As the global tech landscape continues to evolve, TSMC’s efforts are set to shape the future of AI and computing advancements.