July 26, 2023: Taiwan Semiconductor Manufacturing Company intends to fund $90 billion New Taiwan dollars in a developed chip packaging manufacturer in Taiwan, the group told on Tuesday.

It comes as global chipmakers seek to capitalize on the artificial intelligence boom. TSMC acknowledged the strong demand for AI chips in the previous week.

TSMC is the top producer of the world’s most advanced processors, which include chips found in the latest iPhones, iPads, and Macs.

The investment was sparked by “the rapid growth of the AI market,” which has “driven a surge in demand for TSMC’s advanced packaging,” according to a statement from Taiwan’s official Central News Agency.

The facility will be located in Tongluo Science Park in northern Taiwan, TSMC said, adding the investment is expected to create about 1,500 local jobs.

“For AI, right now, we see robust demand. For the front-end part, we don’t have any problem to support,” said TSMC’s CEO C. C. Wei during the firm’s second-quarter earnings report last week.

However, on the advanced packaging side, Wei stated TSMC is experiencing “some very tight capacity.”

“We are increasing our capacity as quickly as possible, and we expect that these tightenings will be released next year, but in between, we’re still working near with our customers to support their growth,” he said Thursday.

Packaging is one of the final stages of semiconductor production. It involves putting chips into a protective case and creating the connections to be put into an electronic device.

The Central News Agency reported that TSMC’s packaging production capacity “is in short supply” as Nvidia and AMD compete for power. U.S.-based chip giants Nvidia and AMD are two of TSMC’s largest customers.

Nvidia buys high bandwidth memory chips that fit onto its latest A100 graphics processing units that train OpenAI’s chatbot ChatGPT.

ChatGPT, an AI-powered language model, went viral for its ability to generate humanlike responses to users’ prompts.

“As TSMC launches its state-of-the-art packaging expansion plan, the market is optimistic that Wanrun, Hongsu, and Xinyun will benefit from the operation of equipment factories,” the report declared, referring to companies that fabricate chip-related equipment.