Taiwan Semiconductor Manufacturing Co. said it will expand production capacity for its most advanced chips as demand tied to artificial intelligence continues to climb. The move underscores how AI spending is reshaping the global semiconductor market and pushing leading foundries to add more high-end manufacturing capacity.

The company’s customers include Nvidia, whose processors have become central to the current wave of AI data center buildouts. As orders rise, TSMC is moving to better match supply with client demand for cutting-edge nodes used in high-performance computing and other advanced applications.

The expansion also comes against a backdrop of export restrictions and geopolitical friction that have made chip supply chains more complex. Governments and companies alike are trying to secure access to the most advanced semiconductors while navigating tighter controls and strategic competition.

TSMC remains the dominant contract chipmaker in the industry, and any increase in its advanced-node capacity is likely to have ripple effects across the technology sector. The company’s latest plans signal that AI-related demand is still strong enough to drive fresh investment in manufacturing.