TSMC builds two new advanced packaging plants as AI chip demand reshapes semiconductor supply chains

TSMC just told the world it’s not done building. The Taiwanese chipmaking giant is adding two more advanced packaging plants at Chiayi Science Park, bringing the total number of facilities at the site to four. The expansion is a direct response to insatiable demand for AI chips.

The four plants combined are projected to generate over 300 billion Taiwan dollars in annual production value. That’s roughly $9.35 billion, and it’s expected to create more than 9,000 jobs in the region.

What TSMC is actually building

Of the four facilities at Chiayi Science Park, one is already in mass production. A second is reportedly close to hitting the same milestone. The two newly announced plants will focus on advanced packaging technologies, most notably CoWoS, which stands for chip-on-wafer-on-substrate.

CoWoS is the process that lets chipmakers stack and connect multiple chip components into a single package. It’s the secret sauce behind Nvidia’s most powerful AI accelerators, and it’s been one of the biggest bottlenecks in the entire semiconductor supply chain.