TSMC to Invest $2.9 Billion in Advanced AI Chip Packaging
Taiwan Semiconductor Manufacturing Company (TSMC) announced its plan to invest nearly $2.9 billion in an advanced AI chip packaging facility in northern Taiwan.
- TSMC to capitalize on the rapid growth of the AI market and address the increasing demand for its advanced packaging solutions.
- TSMC’s shares rose by 1.97% in Asia following the announcement, reflecting the market’s positive response to their strategic expansion plan.
On July 25th, Taiwanese chip giant Taiwan Semiconductor Manufacturing Company (TSMC) announced its investment of nearly $2.9 billion in an advanced AI chip packaging facility in northern Taiwan. The decision comes amid a soaring demand for AI products, driving the need for more advanced packaging capabilities.
TSMC revealed its plans to establish the advanced packaging fabrication facility (fab) in the Tongluo Science Park, located in Miaoli County, south of its main facilities in Hsinchu. This new facility, where they enclose a semiconductor chip in a protective case and connect it to a circuit board, aims to capitalize on the rapid growth of the AI market, which has created a surge in demand for TSMC’s advanced packaging solutions.
CEO C.C. Wei acknowledged the strong demand for AI chips from their customers, including prominent chip designers Nvidia Corp and Advanced Micro Devices (AMD). He stated, “To meet market needs, TSMC is planning to establish an advanced packaging fab in the Tongluo Science Park. This fab will use our most advanced packaging technologies to help our customers deliver the best possible products to the market.”
“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,” Wei explained. The expansion is crucial as the global economy recovers slower than expected, impacting broader end market demand.
The investment is expected to create approximately 1,500 local jobs, contributing to economic growth in the region. The Tongluo Science Park administration has approved TSMC’s application to lease land for the new plant.
While TSMC has been expanding its operations abroad, the company remains committed to keeping its most advanced chip technology in Taiwan. The country has been a global powerhouse in semiconductor manufacturing, supplying chips for various applications, from smartphones to electric vehicles.
TSMC’s advanced packaging technology, including chip on wafer on substrate (CoWoS), is highly sought-after by clients like Nvidia and AMD. As demand from these key players increases, the capacity for packaging production has become tight, leading to the need for further investment.
The company’s shares rose by 1.97% in Asia following the announcement, reflecting the market’s optimistic response to TSMC’s strategic expansion plan. With the operation of the advanced packaging facility, other companies in the chip-related equipment manufacturing sector are also expected to benefit.
TSMC’s position as the leading manufacturer of AI chips, along with its crucial role in producing chips for major tech giants such as Apple and Qualcomm, solidifies its status as a national treasure in Taiwan. The investment in the advanced packaging facility demonstrates the company’s commitment to meeting the ever-growing demand for AI technologies and ensuring its continued prominence in the global semiconductor industry.
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