TSMC’s $2.9B Move Amidst AI Silicon Surge

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Taiwan’s chip giant expands to meet AI’s insatiable demand for advanced silicon.

In response to the skyrocketing demand for advanced AI silicon, Taiwanese chip behemoth TSMC has unveiled plans for a new $2.9 billion factory in Taiwan. This strategic move aims to bolster the company’s packaging capabilities, positioning TSMC to cater to the needs of industry giants like Nvidia and AMD.

A recent CNBC report links TSMC’s expansion directly to the AI industry’s explosive growth. Citing Taiwan’s Central News Agency, it highlights the “rapid growth of the AI market” as the driving force behind the surge in demand for TSMC’s advanced packaging. With Nvidia and AMD among its clientele, TSMC is pressured to deliver high volumes of cutting-edge AI products.

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TSMC’s CEO, C. C. Wei, emphasized the company’s proficiency in the front-end manufacturing process. However, the challenge lies in packaging the finished chips. “For AI, we see robust demand. For the front-end part, we don’t have any problem to support,” Wei stated. But he acknowledged the “very tight capacity” in packaging.

Wei, during the company’s Q2 earnings call, projected that the new investment would start yielding results by 2024. He assured that TSMC is collaborating with its customers to meet their needs. Notably, earlier in April, he mentioned TSMC’s inability to meet Apple’s 3nm wafer demands, indicating the company’s current workload.

The upcoming facility will be situated in Tongluo Science Park, northern Taiwan, and is expected to employ around 1,500 local workers. Both Nvidia and AMD are vying for more capacity at TSMC. However, Nvidia, with its deeper pockets and high-demand AI hardware like the A100 and H100 chips, might have an edge.


 

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