TSMC Approves Another $29.44 Billion for Advanced Processes, Packaging as AI Demand Surges

Third investment decision this year

"We will build at least four more chip fabs"

Taiwan Semiconductor Manufacturing Co., the world's largest contract chipmaker, approved an additional $29.4425 billion of capital spending for advanced processes, packaging upgrades and semiconductor plant construction as the artificial intelligence boom drives up demand for cutting-edge chips.

Taiwan media reported on Aug. 12 that TSMC's board approved the spending at an Aug. 11 meeting. Taiwan's Central News Agency reported that TSMC plans to use 70% to 80% of the budget for advanced processes, 10% for specialty-process expansion and the remaining 10% to 20% for other areas including packaging.

The approval marks TSMC's third capital spending decision this year. The company previously approved $44.962 billion in February and $31.2843 billion in May, both for expanding advanced-process capacity and building chip fabs. Including the Aug. 11 approval, the total reaches nearly $105.6888 billion.

Chairman C.C. Wei said on the company's second-quarter earnings conference call last month that AI demand remained very strong and required additional capacity. He added that TSMC would invest another $100 billion in Arizona and build at least four more semiconductor fabs beyond its existing plan. At the time, the company said it had secured orders from major customers and cloud service providers through 2029 and 2030.

TSMC's board also approved the establishment of a joint venture with Sony. Sony is the world's largest image sensor maker, and the companies plan to jointly produce next-generation image sensors for smartphones through the venture.

Sony will lead product planning and design, while TSMC will oversee manufacturing and mass production using its advanced process technology. Market speculation has also emerged that Sony is increasingly focused on next-generation robots and autonomous vehicles. TSMC said its investment in the joint venture would not exceed 282 billion yen.

Yu-jung Roh, Hankyung.com reporter yjroh@hankyung.com