Taiwan Semiconductor Manufacturing Company (TSMC) is building three new advanced-packaging fabrication facilities at the Chiayi Science Park in southern Taiwan [1].

This expansion targets the critical bottleneck in artificial intelligence hardware. As AI chips require increasingly complex packaging to maintain performance and power efficiency, TSMC's capacity in this area directly affects the global supply of high-end processors.

The project represents Phase II of the Chiayi Science Park development. While Phase I plants began mass production this summer, the addition of these three facilities is intended to further boost total output [4]. The company aims to transform the site into a major advanced-packaging hub by 2031 [3].

Mark Liu, Co-CEO of TSMC, said the demand for AI chips is surging and the company needs to expand capacity quickly [5]. The move reflects a strategic shift toward integrating chip fabrication and packaging, a process essential for the next generation of AI accelerators.

Government officials are supporting the initiative as a pillar of national industrial strategy. Wu Cheng-wen, Minister of the National Science and Technology Council, said the government is committed to building a world-class advanced packaging hub in Chiayi [2].

Financial projections for the site are significant. Once the Chiayi Science Park is fully completed, its projected annual output is expected to exceed U.S.$9 billion [6]. This investment underscores the company's bet on the long-term growth of the AI sector and the necessity of localized, high-capacity packaging infrastructure.

“The demand for AI chips is surging, and we need to expand capacity quickly.”

The expansion indicates that the primary constraint for AI hardware is no longer just the printing of silicon wafers, but the 'packaging'—the process of assembling chips into a final product. By scaling this specific part of the supply chain, TSMC is positioning itself to maintain a dominant grip on the AI ecosystem, ensuring that the hardware requirements for large-scale AI models can be met through 2031.