Overview

Taiwan Semiconductor Manufacturing Company plans to invest nearly $90 billion New Taiwan dollars (about $2.87 billion) in an advanced chip packaging plant in Taiwan, the company told AsumeTech on Tuesday.

About TSMC

TSMC is the top producer of the world’s most advanced processors, which include chips found in the latest iPhones, iPads, and Macs.

Reason for Investment

The investment was sparked by “the rapid growth of the AI market” which has “driven a surge in demand for TSMC’s advanced packaging,” according to a report from Taiwan’s official Central News Agency.

Location and Job Creation

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.

Demand for AI Chips

“For AI, right now, we see a very strong demand. For the front-end part, we don’t have any problem to support,” said TSMC’s CEO C. C. Wei during the firm’s second-quarter earnings report last week. However, on the advanced packaging side, Wei said TSMC is experiencing “some very tight capacity.”

Advanced Packaging

Packaging is one of the final stages of semiconductor production. It involves putting chips into a protective case and creating the connections for it to be put into an electronics device.

Competing for Capacity

The Central News Agency reported that TSMC’s packaging production capacity “is in short supply” as Nvidia and AMD compete for capacity. U.S.-based chip giants Nvidia and AMD are two of TSMC’s largest clients.

TSMC’s Share Performance

Nvidia and OpenAI’s ChatGPT

Market Optimism for Equipment Manufacturers

“As TSMC launches its advanced packaging expansion plan, the market is optimistic that Wanrun, Hongsu, and Xinyun will benefit from the operation of equipment factories,” the report said, referring to companies that manufacture chip-related equipment.

Share Performance