TSMC Gears Up for $16 Billion Advanced Packaging Expansion

TSMC is currently experiencing an unprecedented demand for artificial intelligence (AI) chips, with a significant surge in the market’s need for data center GPUs like NVIDIA’s H100. In response, the company is continuously embarking on the construction of new facilities, specifically aimed at fulfilling the burgeoning order demands. Presently, TSMC seems to be concentrating on the CoWoS packaging domain, deliberating on new expansion plans.

According to media reports, TSMC is in negotiations with local authorities to establish a new advanced packaging factory, with an investment amounting to approximately $16 billion, and an announcement is expected next month. Initially, TSMC had plans to build four such advanced packaging plants, but it now appears that the number may have been revised to six. Industry insiders indicate that TSMC could break ground as early as next month, with the first two of these advanced packaging facilities slated to become fully operational by the end of this year.

TSMC is also undertaking a massive recruitment drive, aiming to hire around 6,000 new employees, specifically targeting individuals with a profound passion for the semiconductor industry. It is understood that the majority of these recruits will be directed towards the newly established or expanding factories, to meet the growing manpower needs necessitated by the expansion in production capacity.

Previous reports have stated that TSMC’s production capacity target for CoWoS for this year is set at 35,000 wafers per month, to increase this figure to 44,000 wafers per month by the end of 2025. However, with the current new plans, this target may be reached by the end of 2024, as more advanced packaging plants commence operations.

TSMC is wholeheartedly addressing the high demand for CoWoS packaging capacity, indicating a bullish outlook on the robust demand for chips, including artificial intelligence and high-performance computing. NVIDIA has already unveiled its next-generation Blackwell architecture GPUs, clearly indicating that TSMC is preparing for the mass production of the forthcoming B200 and GB200 models.