Taiwan Semiconductor Manufacturing Co. (TSMC) is reportedly in discussions with Nvidia Corp. to produce its Blackwell artificial intelligence chips at TSMC’s upcoming plant in Arizona, according to three sources familiar with the matter. The negotiations come as TSMC gears up to begin production at the new facility early next year, aiming to secure Nvidia as a key customer for the site.
Nvidia’s Blackwell chips, unveiled in March, have gained popularity in the fields of generative AI and accelerated computing, boasting performance speeds up to 30 times faster for tasks like chatbot responses. Currently, the chips are produced at TSMC’s facilities in Taiwan, but the potential deal would mark a shift in production to the United States, reflecting growing efforts to decentralize semiconductor manufacturing.
If finalized, the agreement would join Nvidia with other major customers, including Apple and Advanced Micro Devices (AMD), at TSMC’s Arizona plant. Both companies were cited as clients by two sources, although neither TSMC, Nvidia, Apple, nor AMD provided comments regarding the development.
The move to Arizona, however, won’t be seamless. While TSMC plans to handle the initial manufacturing stages of Nvidia’s Blackwell chips in Phoenix, the chips will still need to be shipped back to Taiwan for packaging. This is due to the lack of chip-on-wafer-on-substrate (CoWoS) capacity at the Arizona site, a critical requirement for Blackwell chips. At present, all CoWoS operations remain centralized in Taiwan, underscoring the complexity of transitioning advanced semiconductor processes to new facilities.
The Arizona plant represents part of TSMC’s substantial investment in U.S.-based semiconductor production. The company is building three facilities in Phoenix, backed by billions of dollars in funding and substantial subsidies from the U.S. government. These efforts align with the United States’ broader push to bolster domestic semiconductor manufacturing and reduce reliance on overseas production.
The TSMC-Nvidia talks highlight the growing demand for advanced chips, driven by the surge in AI applications and accelerated computing. As the Arizona plant prepares to commence production next year, the potential partnership could signify a significant milestone in reshaping global semiconductor supply chains.
