Demand for AI chips is increasing, chip foundry spends billions of dollars to expand production capacity

Semiconductor giant TSMC will invest $2.87 billion to build an advanced chip packaging plant in Taiwan to meet booming AI demand.

The investment shows that “the rapid growth of the AI ​​market” has become “a key driver for TSMC's advanced packaging work,” CNA reported.

Packaging is one of the final steps in semiconductor manufacturing. This process involves placing the chip in a protective case and creating connectors to place the product into an electronic device.

TSMC said the chip packaging plant will be built at the Tongluo Science Park in northern Taiwan and create about 1,500 local jobs.

“We see a huge demand for AI and we are ready to support this end-to-end,” TSMC CEO CC Wei said on an earnings call last week, but admitted the company’s capacity is “still very limited” in advanced packaging.

“We are ramping up production as quickly as possible and hope to clear the bottlenecks by 2024. At the moment, the company remains committed to working closely with customers to support their growth,” the foundry chief said.

CNA previously reported that TSMC's packaging productivity is "weak" compared to rivals like Nvidia and AMD, which are also the Taiwanese company's two largest customers.

TSMC, the world’s largest contract chipmaker, reported a 10% year-over-year decline in second-quarter revenue and a 23.3% drop in net income, down from its latest quarterly estimate of $15.2 billion to $16 billion.

This is the first time the company has recorded a decline in net income since the second quarter of 2019. TSMC forecasts revenue in the third quarter of 2023 to reach about $16.7 billion and $17.5 billion with its main product being a 3-nanometer technology processor, a chip that is expected to appear in the next generation of iPhones from the "Apple House".

(According to CNBC)

Source: https://vietnamnet.vn/nhu-cau-chip-ai-tang-cao-hang-duc-chip-chi-ty-usd-mo-rong-nang-luc-san-xuat-2169633.html