TAIPEI (Taiwan News) — Taiwan Semiconductor Manufacturing Co. (TSMC) is reportedly set to double its advanced packaging capacity this year, according to CNA on Sunday (Feb. 18).

Advanced packaging has seen a surge in demand in response to the growing need for artificial intelligence (AI) and high-performance computing (HPC) chips. Even with TSMC’s planned packaging capacity increase, demand will continue to outstrip supply, sources told CNA.

TSMC has been working since July to expand its advanced packaging capacity, according to the sources. In December, its monthly advanced packaging capacity increased from 14,000 to 15,000 wafers.

Monthly capacity for the world’s largest contract chipmaker is expected to grow to 33,000 to 35,000 wafers by the fourth quarter.

Meanwhile, other backend chip assembly and testing companies like ASE Technology, Powertech Technology, and KYEC have also increased their capital expenditures this year to expand advanced packaging capacity to meet growing demand.