Taiwan Semiconductor Manufacturing Co (TSMC, TWSE: 2330) is expanding production capacity five times faster than usual this year and still cannot meet demand driven by artificial intelligence, deputy co-chief operating officer Cliff Hou said, the Taipei Times reported on September 8.

The world's largest contract chipmaker is constructing 25 wafer fabrication and advanced packaging facilities globally in 2026, including 13 in Taiwan, a pace Hou described as unprecedented for the company. TSMC has historically added five or six plants a year.

Hou, who also chairs the Taiwan Semiconductor Industry Association, spoke at a chief executive summit fireside chat during the Semicon Taiwan trade show, which opened in Taipei on September 7.

The build-out extends beyond fabrication. TSMC plans to set up operations at the Baipu Industrial Park in the southern port city of Kaohsiung to speed up testing and validation of semiconductor materials and equipment, according to Jun He, vice president of advanced packaging technology and service.

The company is coordinating the project with the Ministry of Economic Affairs and the Kaohsiung City Government, He said at a 3D integrated circuit global summit held ahead of the trade show. The plan is expected to lift validation efficiency by between 25% and 50%.

The three-hectare site is to house small clean rooms and laboratories alongside a training base for advanced packaging engineers, the company said.

Advanced packaging has become a bottleneck for AI chip supply, with TSMC's chip-on-wafer-on-substrate technology used to assemble processors for AI accelerators. Elsewhere at the Taipei show, visitors viewed a 64-qubit superconducting quantum computer displayed at Fujitsu's booth.

Labour tensions surfaced in another corner of Taiwan's chip sector. Trade unions representing workers at US memory maker Micron Technology Inc's operations in Taoyuan and Taichung said they were moving towards possible strike action unless the company revamps its bonus system and distributes a larger share of profits to staff.