AI Gold Rush Sends Taiwan Semiconductor Racing To Build Another Mega Factory

Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM) is aggressively expanding production capacity to meet relentless global demand for artificial intelligence hardware.

The company recently advanced its proposal for a new fabrication plant at the Southern Taiwan Science Park in Tainan, according to a February 12 environmental impact assessment (EIA) filing.

With the public review period now concluded, an EIA committee meeting is slated for March 26, as reported by the Taipei Times. Taiwan Semiconductor aims to break ground later this year, targeting completion in 2028 for the 15.46-hectare facility.

The site allocation prioritizes industrial efficiency, with 8 hectares dedicated to production and equipment, while the remaining space supports infrastructure, green zones, and administrative offices.

Strategic Dominance in the Advanced Foundry Market

This Tainan project complements Taiwan Semiconductor’s broader roadmap, which includes 2-nanometer facilities in Hsinchu and Kaohsiung, as well as an A14 process plant in Taichung.

Beyond technological advancement, the new fab is expected to generate 1,400 direct jobs and 500 supply-chain roles. Despite global diversification efforts, industry leaders maintain that Taiwan remains the epicenter of semiconductor manufacturing.

At the AI Impact Summit in New Delhi, Ofcom CEO Melanie Dawes said Taiwan is expected to remain a leader in semiconductor production for the foreseeable future.

Taiwan produces more than 60% of the world’s semiconductors and over 90% of the most advanced chips.

Palo Alto Networks Inc. (NASDAQ:PANW) CEO Nikesh Arora underscored Taiwan’s efficiency and scale in chip manufacturing, noting the industry’s multibillion-dollar scope.

Economic Momentum and Market Performance

As a primary supplier to Nvidia Corp. (NASDAQ:NVDA), Advanced Micro Devices Inc. (NASDAQ:AMD), and Apple Inc. (NASDAQ:AAPL), Taiwan Semiconductor’s growth is fueling a massive domestic economic tailwind.

Driven by AI hardware demand, Taiwan’s January exports surged 70%—the fastest pace in 16 years—while Taiwan Semiconductor reported a 37% revenue jump for the same period. Consequently, the Taiwanese government has revised its annual GDP growth forecast upward to 8.68%.

TSM Price Action: Taiwan Semiconductor shares were down 0.17% at $356.83 during premarket trading on Thursday. The shares have surged about 93.97% over the past year.

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