Taiwan in talks with Nvidia for AI chip production at Arizona plant

Taiwan Semiconductor Manufacturing Co. (TSMC) is in discussions with Nvidia to produce the latter's Blackwell artificial intelligence chips at TSMC’s new Arizona plant, sources familiar with the matter stated.

Production is expected to begin early next year, Caliber.Az reports citing foreign media.

Nvidia's Blackwell chips, launched in March, have been manufactured at TSMC’s Taiwan facilities so far. The chips have been in high demand, particularly from businesses involved in generative AI and accelerated computing, thanks to their impressive performance, which is claimed to be 30 times faster at tasks like generating chatbot responses.

If finalized, this deal would provide TSMC’s Arizona facility with another major customer, as the plant is slated to begin full production next year. Other companies, such as Apple and Advanced Micro Devices (AMD), are also reportedly customers of the facility, though these companies have not yet commented.

While TSMC plans to produce the front-end part of Nvidia’s Blackwell chips in Arizona, the chips will still need to be sent to Taiwan for packaging, as the Arizona plant lacks the necessary CoWoS (chip on wafer on substrate) capacity, which remains in Taiwan.

TSMC, the world’s largest contract chipmaker, is heavily investing in building multiple facilities in Phoenix, Arizona, with substantial US government subsidies supporting the initiative aimed at bringing semiconductor manufacturing back to the US.

By Vafa Guliyeva