Taiwanese chip manufacturer TSMC has announced plans to invest $ 100bn (£ 73bn) over the next three years to expand its capabilities.
Taiwan Semiconductor Manufacturing Co. is the largest contractor in the world with customers including Apple.
Advanced Micro Chips
The company has already announced plans to spend up to $ 28bn this year on developing and producing advanced micro chips.
This big investment comes as global chip shortages hit the automotive industry.
Volkswagen, Honda, Toyota and General Motors all have to reduce production due to shortages.
Shortages
The shortage emerged because car companies cancelled their orders when demand slumped due to the Covid-19 pandemic last year.
Chip makers switched to selling their products to other industries in high demand, and automakers were unable to get back their canceled orders when demand grew again.
In January, the TSMC said it would prioritize chip production in the automotive industry, in an effort to reduce shortages.
Due to strong global demand, shortages have spread to many other sectors, including consumer electronics.
Increasing Demand
TSMC predicts strong steady growth in demand for semiconductor technology as the Covid-19 pandemic continues to accelerate digitalisation.
“We are entering a period of high growth as the multi-year 5G megatrends and efficient computer are expected to demand heavily in our semiconductor technology in the next few years,” the company said.
Additional funding “will increase the capacity to support production and research and the development of advanced semiconductor technology”.
The announcement comes just days after Intel announced a $ 20bn plan to increase its capacity.
Intel, which was based in the United States last month, said it would build two new factories at an existing facility in Arizona.
The factories will not only make Intel chips, but would be open to outside customers, which could bring Intel into direct competition with TSMC.
TSMC announced plans to build its own factory in Arizona last May.
