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

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TSMC told CNBC on Tuesday that it plans to invest nearly NT$90 billion (US$2.87 billion) in building an advanced chip packaging plant in Taiwan.

The move comes as global chipmakers seek to capitalize on the artificial intelligence boom. TSMC acknowledged last week that demand for artificial intelligence chips is strong.

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

According to the introduction, the investment was triggered by “rapid growth in the artificial intelligence market” that “drives a surge in demand for TSMC’s advanced packaging.” A report by Taiwan’s official Central News Agency.

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

“For artificial intelligence, we’re seeing very strong demand at the moment. For the front-end part, we don’t have any issues to support,” TSMC CEO CC Wei said in the company’s second-quarter earnings report last week.

However, when it comes to advanced packaging, Wei said TSMC is experiencing “some very tight capacity.”

“We are ramping up capacity as quickly as possible and expect these austerity measures to be implemented next year, but in the interim we are still working closely with our customers to support their growth,” he said on Thursday.

Packaging is one of the final stages of semiconductor production. It involves placing a chip in a protective case and creating connections to get it into an electronic device.

Central News Agency reported that due to Nvidia and AMD competing for production capacity, TSMC’s packaging production capacity is “in short of supply.”American chip giant Nvidia and AMD It is the two largest customers of TSMC.

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Nvidia has bought high-bandwidth memory chips suitable for its latest A100 graphics processing unit to train OpenAI’s chatbot ChatGPT.

ChatGPT is an AI-powered language model that has gained popularity for its ability to generate human-like responses to user prompts.

“With TSMC launching advanced packaging capacity expansion plans, the market is optimistic that Wanrun, Foresho and Xinyun will benefit from equipment plant operations,” the report said., Refers to companies that manufacture chip-related equipment.

TSMC shares rose 1.97% in Asia on Tuesday.

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