Taiwanese chip maker TSMC plans to invest nearly T$90bn (£2.4bn) in an advanced packaging facility in the Tongluo Science Park in northern Taiwan. 

“To meet market needs, TSMC is planning to establish an advanced packaging fab,” the company said.

The announcement follows last week’s comments from the company’s CEO, CC Wei, who told analysts that TSMC plans to roughly double its capacity for advanced packaging capacity in 2024 compared with 2023, in order to meet “strong demand” for AI chips from its customers. 

The packaging process for advanced semiconductors uses high-technology processes to place multiple chips into a single device, creating a more powerful computer chip. TSMC has said its chip on wafer on substrate (CoWoS) capacity is “very tight”, and the firm could struggle to meet the boost in demand.

“We are increasing our capacity as quickly as possible. We expect this tightening will be released next year, probably towards the end of next year...