Recently, Morris Chang, the founder of TSMC and a prominent figure in the industry, revealed that some unnamed clients made an incredible request for TSMC to build up to 10 new artificial intelligence processor wafer fabs.
This news indicates that the demand for AI processors continues to surge, and the market potential is eye-catching. It’s not surprising, as it is well known that market leader Nvidia can no longer meet this huge demand, and other AI technology companies are also seeking to increase processor supply.
According to Nikkei News, Chang stated at a conference in Japan that these clients were not talking about tens of thousands of wafers but directly proposed the construction of 3 to 10 wafer fabs, a number that shocked him.
TSMC is one of the few semiconductor manufacturing companies capable of producing 100,000 wafers per month. These “gigafactories” utilize various advanced process technologies to manufacture processors, effectively improving production utilization and reducing costs.
However, building a gigafactory requires a significant investment, with a large 3nm wafer fab possibly needing over $20 billion in investment after completion and outfitting, and the construction period can last several years.
In comparison, TSMC’s capital expenditure budget for 2024 is between $28 billion and $32 billion, which is insufficient to support the construction of multiple gigafactories per year. According to Chang’s estimate, building 10 leading wafer fabs would exceed an investment of $200 billion, not including the cost of supporting the supply chain and infrastructure.
Despite this, there are rumors that OpenAI CEO Sam Altman is trying to raise trillions of dollars to establish a network of wafer fabs operated by leading chip manufacturers to meet the demand for AI processors. Although this plan is economically almost unfeasible, it reflects the enormous market demand for AI processors.
Overall, while it currently seems unlikely to build 10 new cutting-edge wafer fabs, it is expected that capacity will grow within reasonable limits to meet the expanding market demand.
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