Taiwan’s TSMC to invest $2.9 billion in new plant as demand for AI chips soars

By Juliana Liu, CNN

Hong Kong (CNN) — TSMC, the world’s largest chipmaker, says it plans to invest nearly 90 billion New Taiwan dollars ($2.9 billion) to build an advanced chip plant in Taiwan, as it expands production to meet booming demand for artificial intelligence (AI) products.

Last week, CEO C.C. Wei told analysts the company plans to roughly double its capacity for advanced packaging in 2024 compared to 2023, in order to meet “strong demand” for AI chips from its customers, which include Nvidia (NVDA) and AMD.

Advanced packaging in the semiconductor industry involves using high-tech methods to aggregate components from various wafers in order to create a more powerful computer chip.

TSMC (TSM) said the new plant is expected to create 1,500 jobs.

“To meet market needs, TSMC is planning to establish an advanced packaging fab in the Tongluo Science Park,” the company told CNN in a statement, referring to fabrication plants — the technical term for semiconductor factories.

The science park is located in Miaoli County, south of the firm’s main facilities in Hsinchu, near Taipei.

TSMC on Thursday reported a 23% fall in net profit for the second quarter, compared to the same period last year, as a global economic downturn took a toll on overall demand — even as customers clamored for more of its AI chips.

Chips manufactured by TSMC for customers like Nvidia are the muscle behind generative AI, a type of artificial intelligence that can create new content, such as text and images, in response to user prompts.

That’s the kind of AI underlying ChatGPT, Google (GOOGL)’s Bard, Dall-E and many of the other new AI technologies.

TSMC is considered a national treasure in Taiwan, supplying semiconductors to global tech giants including Apple (AAPL) and Qualcomm (QCOM).

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CNN’s Wayne Chang contributed reporting.