HOUSTON, March 26 (Reuters) - Exxon Mobil ( XOM ) said

on Wednesday it will spend $100 million to upgrade its Baton

Rouge, Louisiana, chemical plant to produce a highly pure form

of isopropyl alcohol that is used in the tech industry to clean

and process microchips.

The move comes as the development of advanced artificial

intelligence is spurring a boom in the chip industry, with

companies building data centers that house huge troves of

specialized chips and tech giants developing in-house chips to

train AI systems.

The chemical plant upgrade, which will be completed by 2027,

will allow Exxon to produce more high-purity isopropyl alcohol

and meet the growing demand from U.S. tech companies, said

Frederik Donkers, vice president of intermediates at Exxon.

"It will create production at scale and allow us to support

the fabs that are under construction in the U.S.," he said.

Production of the highly pure isopropyl alcohol will be

geared toward U.S.-based customers, as exporting it over longer

distances internationally could introduce risks to the purity

level, Donkers said.

Exxon declined to say if it has signed new customer

agreements to supply the isopropyl alcohol.

U.S. companies have sourced highly pure isopropyl alcohol

from Taiwan and Japan, because domestic suppliers did not meet

their needs, according to SEMI, a semiconductor trade

association, in 2021 public comments to the U.S. Department of

Commerce.