Taiwan's TSMC, the world's largest foundry (semiconductor contract manufacturing) company, has announced that while it is building a total of 20 fabs, or semiconductor production plants, worldwide, it is struggling to keep up with explosive artificial intelligence (AI) demand.

According to Taiwanese media outlets including the China Times on September 3, Kevin Hou, Senior Vice President of TSMC and Chairman of the Taiwan Semiconductor Industry Association (TSIA), made the remarks the previous day at the CEO Summit of the "SEMICON Taiwan 2026" semiconductor exhibition held in Taipei.

Senior VP Hou stated that the semiconductor industry is facing an unprecedented surge in demand not seen over the past 30 years, estimating that equipment purchase demand in July of this year surged 1.9 times compared to the end of last year.

He explained that TSMC is currently building 13 fabs in Taiwan and has broken ground on plants in 5 to 6 overseas locations, simultaneously pursuing the construction of about 20 fabs worldwide.

However, he emphasized that production capacity still fails to keep pace with demand.

The current scale of construction is 4 to 5 times that of the past.

He cited a severe shortage of construction labor as the biggest obstacle to expanding production, noting that both Taiwan and the United States are facing the same situation, and emphasized that the company is actively introducing AI into production lines to improve production capacity and prevent the leakage of technological secrets.

Meanwhile, Dirk Panter, Minister for Economic Affairs of Saxony, stated during a press conference held the previous day at the German Pavilion of "SEMICON Taiwan 2026" that the Dresden plant in Germany, in which TSMC holds a 70% stake, is scheduled to be completed around 2027 and produce 480,000 12-inch wafers annually.

In the meantime, Ho Chun, Vice President of TSMC's Advanced Packaging Technology and Service division, announced at the "3DIC Global Summit Forum" held on September 1 that a facility for testing and verifying semiconductor materials and equipment will be established on a 3-hectare (30,000 square meters) site in the Kaohsiung Pihou Industrial Park in southern Taiwan.

This measure is designed to respond to the rapid growth of AI applications and surging demand for advanced packaging.

(Photo: AP, Yonhap News)