TAIPEI: Contract chipmaker TSMC said on Thursday it plans to invest $100 billion over the next three years to increase capacity at its plants, days after Intel Corp announced a $20 billion plan to expand its advanced chip making capacity.

Taiwan Semiconductor Manufacturing Co Ltd, whose customers include Apple Inc and Qualcomm Inc, had already flagged a plan to spend of between $25 billion-$28 billion this year, to develop and produce advanced chips.

The move comes as global companies reel from a shortage of semiconductor chips that initially forced auto companies to cut production, but is now hurting makers of smartphones, laptops and even appliances amid a pandemic-fuelled rise in demand.

"We are entering a period of higher growth as the multiyear megatrends of 5G and high-performance computing are expected to fuel strong demand for our semiconductor technologies in the next several years," TSMC said in a statement to Reuters.

"In addition, the COVID-19 pandemic also accelerates digitalization in every aspect," it said.

Shares in TSMC rose nearly 2% in late morning trade.

TSMC, like other technology firms, has benefited from the work-and-study-from-home trend during the COVID-19 pandemic, as people rushed to buy laptops, tablets and other equipment.

TSMC announced plans in May to build its own $12 billion factory in Arizona, in an apparent win for the administration of former US President Donald Trump that was pushing to wrestle global tech supply chains back from China.

Rival Intel said this month it will build two new factories at an existing campus in Arizona to make its own chips but also open them to outside customers in what is called a "foundry" business model in the chip industry.