TAIPEI— Taiwan Semiconductor Manufacturing Co. , a major chip supplier to Apple Inc., said it would invest $100 billion over the next three years to increase production capacity as demand surges.

The planned investment is a record for the world’s largest contract chip maker as well as the broader industry, analysts said, at a time when chips are in short supply around the world. In a statement, the company said it expects strong demand over the next several years, a trend driven by growth in 5G and high computing capabilities and accelerated by the Covid-19 pandemic.

“TSMC is working closely with our customers to address their needs in a sustainable manner,” the company said Thursday.

In a letter to clients seen by The Wall Street Journal, Chief Executive C.C. Wei said that the company hadn’t been able to keep up with demand over the past year despite running its fabrication plants at over 100% utilization. Mr. Wei wrote that TSMC had started hiring thousands of new employees, and planned to both build new fabs and expand existing ones.

The $100 billion allocation for the next three years would be more than double what the company spent in the previous three years, according to New Street Research analyst Pierre Ferragu.