Asia Tech Wire (Aug 16) -- TSMC may aim to meet growing demand for artificial intelligence chips through aggressive investments in advanced packaging, Citi analysts Laura Chen and Jack Chen said in a research note.

TSMC said Thursday that it has signed a contract with Taiwan-based panel maker Innolux to buy the latter's plant and ancillary facilities in Tainan City for NT$17.14 billion.

After completing the deal, Citi expects TSMC to accelerate the expansion of its CoWoS advanced packaging capacity.

That capacity could reach 30,000 to 35,000 wafers per month in the fourth quarter, rising to more than 60,000 wafers per month by the end of 2025, the analysts said.

TSMC's capital expenditures could increase further to $35 billion next year, they added.