To Serve Exploding AI Chip Demand, Taiwan Semiconductor Plans 9 Advanced Factories

Taiwan Semiconductor Manufacturing Co TSM said on Thursday that it will construct nine new advanced wafer manufacturing and packaging factories by 2025.

It plans to build nine new factories, including eight wafer fabrication plants and one advanced chip packaging factory, the Taipei Times reported on Friday, citing Taiwan Semiconductor vice president T.S. Chang at the company’s annual technology symposium.

TSMC expects to see 60% year-over-year growth in shipments for chips made with the 3-nanometer process.

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The company told the Taipei Times that it expects shipments of overall AI chips to grow 12X this year compared to 2021, with Nvidia Corp NVDA as one of the biggest customers.

According to the report, the Taiwanese chipmaker built an average of five factories annually from 2021 to 2024 and three from 2017 to 2020.

Taiwan Semiconductor had announced on Tuesday that its board of directors approved $15.25 billion in capital appropriations for long-term expansion to meet growing demand.

The funds will help to install advanced technology and packaging capacity, expand mature and specialty technology, and construct fabs with facility systems.

TSM surged 28% in the last 12 months, backed by demand for its chips from Nvidia and Apple Inc. AAPL.

The contract chipmaker plans to start constructing its most advanced wafer fab in Taichung by the end of 2025.

Taiwan Semiconductor plans to build five wafer fabs to produce 2-nanometer and A16 technology process chips in Kaohsiung. It expects its 2-nanometer technology to start commercializing in the second half of 2025 at two new fabs in Hsinchu and Kaohsiung.

The company will also add an advanced chip packaging facility using chip-on-wafer-on-substrate (CoWoS) technology.

Taiwan Semiconductor expects to expand its CoWoS capacity at a compound annual growth rate of 80% from 2022 to 2026, topping its previous estimate of 60% last year.

Taiwan Semiconductor on Thursday reiterated that total global semiconductor industry revenue would grow 10% annually this year.

Price Action: TSM stock is up 0.27% to $194.75 premarket at the last check on Friday.

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