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

TSMC plans to build an advanced chip plant in Taiwan to meet the booming demand for AI products.

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

Hong Kong CNN

TSMC, world's biggest chipmaker, plans to invest almost 90 billion New Taiwan Dollars ($2.9 billion) in a new chip plant to expand production and meet the booming demand of artificial intelligence (AI).

C.C. Wei, the CEO of C.C. Wei informed analysts that the company will roughly double its advanced packaging capacity by 2024 compared with 2023 in order to meet a'strong demand for AI chips' from its customers. These include Nvidia and AMD.

In the semiconductor industry, advanced packaging involves high-tech methods that aggregate components from different wafers to create a computer chip with greater power.

TSMC (TSM), said that the new plant will create approximately 1,500 jobs.

TSMC said in a CNN statement that it plans to build an advanced packaging fab at the Tongluo Science Park to meet market demands. Fabrication plants are the technical term used for semiconductor factories.

The park is located south of Hsinchu near Taipei, in Miaoli County.

TSMC reported a 23% drop in its net profit for the second-quarter, compared with the same period of last year. The global economic downturn had a negative impact on demand, even though customers demanded more AI chips.

TSMC chips for Nvidia customers are the brains behind generative artificial intelligence, a form of artificial intelligent that can generate new content such as images and text in response to user input.

This is the same AI that powers ChatGPT, Google's (GOOGL's) Bard, Dall-E, and other AI technologies.

(AAPL) & Qualcomm (QCOM).