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As demand for AI chips skyrockets, Taiwan’s TSMC will invest $2.9 billion in a new facility.

In order to keep up with the surging demand for its AI products, TSMC, the largest chipmaker in the world, has announced plans to invest over 90 billion New Taiwan dollars ($2.9 billion) on a new sophisticated chip facility in Taiwan.

CEO C.C. Wei told analysts last week that the business intends to approximately treble its advanced packaging capacity in 2024 compared to 2023 to fulfill “strong demand” for AI chips from customers like Nvidia (NVDA) and AMD.

Using cutting-edge technology, semiconductor companies are developing more powerful computer chips by combining components from different wafers.

According to TSMC (TSM), the new facility will result in the addition of 1,500 new employment.

In a release, the company talked about fabrication plants, which is the technical name for semiconductor factories, “Tongluo Science Park is the site of TSMC’s proposed state-of-the-art packaging fab, which will be built to accommodate growing demand.”

Miaoli County, to the south of the company’s main facilities in Hsinchu, is where you’ll find the science park, which is close to Taipei.

In spite of customers clamoring for more of its AI chips, TSMC on Thursday announced a 23% drop in net profit for the second quarter compared to the same period last year as a result of a decline in overall demand brought on by the global economic slowdown.

TSMC’s chips power generative AI, a subset of AI that can generate novel content like text and graphics in response to human instructions. Customers like Nvidia rely on TSMC to supply their chip needs.

That’s the type of AI that powers ChatGPT, Bard by Google (GOOGL), Dall-E, and lots of other cutting-edge AI tools.

As a supplier of semiconductors to international tech giants like Apple (AAPL) and Qualcomm (QCOM), Taiwan Semiconductor Manufacturing Company (TSMC) is regarded as a national treasure in Taiwan.

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