Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, is reportedly in discussions with Nvidia to manufacture the tech giant’s Blackwell chips at TSMC’s new facility in Arizona. The move could mark a significant step in localizing advanced chip production in the U.S.
Blackwell Chips to Be Made in Arizona
According to Reuters, TSMC plans to begin producing Nvidia’s Blackwell AI chips at its Arizona plant early next year. Currently, these chips are manufactured at TSMC facilities in Taiwan.
However, even with production taking place in the U.S., the chips would still need to be sent back to Taiwan for packaging, reflecting the complexity and global nature of semiconductor supply chains.
Federal Investment in TSMC’s Arizona Facility
The Biden administration has allocated $6.6 billion in direct federal funding to support TSMC’s Arizona factory complex as part of efforts to strengthen domestic semiconductor production. The facility underscores the U.S. government’s push to reduce reliance on foreign chip manufacturing amid rising geopolitical tensions.
TSMC’s customers include tech giants like Apple and Broadcom, making the Arizona facility a key asset in bolstering the resilience of global supply chains.
TSMC’s Stock Performance
American depositary receipts (ADRs) of TSMC have seen a remarkable rise this year, nearly doubling in value. However, premarket trading showed little change in reaction to the latest news. Nvidia’s collaboration with TSMC on Blackwell chips adds further momentum to the ongoing growth in demand for advanced AI technologies.
The Road Ahead
As TSMC gears up for U.S.-based chip production, its partnership with Nvidia highlights the growing importance of localizing supply chains to support next-generation technologies like AI. While logistical challenges, such as the need for overseas packaging, remain, the Arizona facility marks a pivotal shift in the semiconductor industry’s global dynamics.
