By In recent times, the world has witnessed an unprecedented surge in the demand for artificial intelligence (AI) technology, and Taiwanese chip maker TSMC (Taiwan Semiconductor Manufacturing Company) is gearing up to capitalize on this growing trend. As part of its strategic move to meet the burgeoning market needs, the company has announced a substantial investment of nearly T$90 billion (approximately $2.87 billion) to establish an advanced packaging facility in northern Taiwan. This decision comes in response to the pressing need to enhance its capacity for advanced packaging, a process that involves integrating multiple chips into a single device, ultimately reducing the added cost of more powerful computing capabilities.
CEO C.C. Wei has emphasized the company’s challenge in keeping up with customer demands driven by the AI boom. To address this, TSMC plans to nearly double its capacity for advanced packaging, with a particular focus on technologies like a chip on wafer on the substrate (CoWoS). However, the capacity for advanced packaging, especially in TSMC’s proprietary CoWoS technology, has been under significant strain, as indicated by a recent 23% decline in second-quarter profit. Nevertheless, the company remains committed to expanding its capacity rapidly, with the goal of alleviating the current constraints, potentially by the end of the following year.
Despite TSMC’s prominent position as the leading manufacturer of AI chips, supplying major chip designers such as Nvidia Corp and Advanced Micro Devices, the company faces challenges stemming from broader weaknesses in the global end market. The global economy’s slower recovery than initially anticipated has dampened overall demand, creating a complex business landscape for TSMC to navigate.
Nonetheless, the company’s ambitions for growth remain steadfast. The Tongluo Science Park administration has officially approved TSMC’s application to lease land for its advanced packaging facility, signaling the green light for the project’s development. The planned plant, situated in the picturesque northern county of Miaoli, is expected to create around 1500 jobs, contributing positively to the regional economy and employment opportunities.
In an era where many technology companies are expanding their operations to overseas markets, TSMC has chosen to retain its most advanced chip manufacturing technology in its home country, Taiwan. Renowned as a global powerhouse in semiconductor manufacturing, Taiwan’s expertise spans diverse sectors, powering innovations in smartphones, personal computers, data centers, and electric vehicles.
As TSMC embarks on this ambitious endeavor to bolster its capacity for advanced packaging and cater to the growing demands of the AI market, the company’s commitment to maintaining its cutting-edge chip technologies in Taiwan underscores the nation’s significance in the semiconductor industry. With the AI revolution continuing to reshape industries and economies worldwide, TSMC’s investment and expansion efforts are poised to play a pivotal role in driving technological progress and innovation in the years to come.
