TSMC is responding to a surge in demand for NVIDIA hardware due to the AI industry boom. The Taiwanese semiconductor contract manufacturer is planning to expand its advanced packaging capabilities as current production lines have reached maximum capacity. The growth of 5G technology and IoT device markets are also contributing factors. Clients are buying chip-on-wafer-on-substrate (CoWoS) at an unprecedented rate. TSMC will provide NVIDIA with an extra 10,000 CoWoS wafers. Chairman Mark Liu discussed these expansion plans at a recent company shareholder meeting, outlining improved factory facilities that will result in an additional output of 1,000 to 2,000 wafers per month. TSMC is upgrading equipment at its existing facilities to meet increasing demand.
Trendforce evaluated the same TSMC shareholding meeting and stated that the demand for advanced packaging orders for TSMC has increased due to the generative AI trend initiated by ChatGPT. TSMC is forced to increase production as quickly as possible as the demand for its advanced packaging capacity far exceeds the existing capacity. Chairman Mark Liu stated that the current investment in R&D focuses on 3D IC (chip stacking) and advanced packaging. Three-quarters of TSMC's R&D expenditure is used for advanced processes, and one quarter for mature and special processes, with advanced packaging falling under mature and special processes.