AMD ramping up Taiwan capacity as global CPU market tightens

[TAIPEI] Advanced Micro Devices (AMD) is working with Taiwan partners to ramp up production capacity as stronger-than-expected demand squeezes the global central processing unit (CPU) market, CEO Lisa Su said on Friday (May 22).

Speaking in Taipei after a visit to China, Su said that she had met AMD’s largest customers in China and globally, and came to Taiwan to ensure supply capacity could support a significant increase in CPU production.

Taiwan plays a pivotal role in the global artificial intelligence supply chain for companies including Nvidia and Apple, and its position is anchored by the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Company, a major supplier of AMD.

“The overall CPU market has had significantly higher demand than any of us predicted a year ago,” Su said. “I would say the CPU market is tight.”

She said that AMD was ramping up capacity quickly and expected supply to increase every quarter this year, with significantly more supply planned for 2027 and beyond.

Growth was being driven by AI inferencing and agentic AI, Su said.

CPUs have taken centre stage as companies and businesses gravitate towards agentic AI – systems that perform autonomous functions – broadening demand beyond graphics processing units, or GPUs, that are used to train large models.

Su met Chinese Vice-Premier He Lifeng in Beijing on Monday, with He saying China welcomes companies, including AMD, to “seize the opportunities presented by China’s development and deepen mutually beneficial cooperation”.

China accounts for about 20 per cent of AMD’s revenue, Su said, adding that the country remains a very important market for the US chip designer.

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“Frankly, you look at the size of the market and the size of our portfolio, and we will continue to partner very closely with our Chinese customers,” she said,

She said that AMD would continue working closely with Chinese customers while complying with US export controls that restrict shipments of some of its high-end AI chips.

Taiwan ecosystem

AMD said on Thursday that it would invest more than US$10 billion in Taiwan’s AI sector, to deepen strategic partnerships and expand its capacity to build and assemble advanced AI chips.

Su said that the investment would focus on advanced packaging, substrates and manufacturing for rack-scale systems.

“Because the lead time on some of these investments is quite long, they have to secure land and buildings and manufacturing capacity to do that,” she added.

She said that AMD was co-investing with partners to ensure sufficient capacity for expansion in 2026 and beyond, including through 2029.

The US chip designer said that it was working with Taiwanese partners, including ASE, its unit SPIL, PTI, Wiwynn, Wistron, Inventec, Unimicron, AIC, Nan Ya PCB and Kinsus.

AMD also said on Thursday that it had started ramping production of its Venice CPUs using TSMC’s 2-nanometre process technology.

“We made two bets, actually. The first bet was a bet on TSMC, and I think that has turned out to be a really great bet for us,” Su said.

She said that AMD’s second major bet was that increasingly complex silicon technology would require chips to be broken into smaller pieces and integrated through advanced packaging technologies, an approach now widely adopted across the semiconductor industry. REUTERS