TSMC and Nvidia in talks for Blackwell chip production in Arizona

Taiwan Semiconductor Manufacturing Company (TSMC) is reportedly in discussions with Nvidia to produce its Blackwell AI chips at TSMC’s new facility in Arizona, according to sources familiar with the matter. This move would mark a significant expansion of Nvidia’s chip production outside Taiwan, where the Blackwell series has been manufactured since its unveiling in March. The chips, celebrated for their generative AI and accelerated computing capabilities, are in high demand and boast speeds 30 times faster than previous models for tasks like chatbot responses.

The Arizona facility, set to begin volume production next year, represents a major US investment by TSMC, which is building three plants in Phoenix with substantial US government subsidies. If finalised, Nvidia would join Apple and AMD as plant customers. However, sources indicate that the chips would still need to be sent back to Taiwan for advanced packaging due to the lack of chip-on-wafer-on-substrate (CoWoS) capacity in Arizona. All of TSMC’s CoWoS operations remain centralised in Taiwan.

TSMC’s expansion into the US aligns with Washington’s push to bolster domestic semiconductor manufacturing amid geopolitical concerns over Taiwan. Neither TSMC nor Nvidia has commented on the talks, emphasising the confidentiality of the ongoing discussions.