Nvidia considers TSMC Arizona plant for AI chip manufacturing

Taiwan Semiconductor Manufacturing Co (TSMC) is negotiating with Nvidia to produce its Blackwell AI chips at TSMC’s new plant in Arizona, according to insider sources. The Blackwell chips, unveiled in March, are designed for generative AI and accelerated computing, boasting speeds up to 30 times faster for tasks like chatbot responses. Production at the Arizona facility is expected to commence next year.

While TSMC will handle the front-end chip production in Arizona, the chips will require shipment back to Taiwan for essential packaging. Arizona’s plant lacks chip-on-wafer-on-substrate (CoWoS) capacity, which is crucial for Blackwell chips. TSMC currently reserves all CoWoS operations for its Taiwan facilities.

The agreement, if finalised, would expand the client base of TSMC’s Arizona site, which already counts Apple and Advanced Micro Devices among its customers. Neither TSMC nor Nvidia commented on the ongoing discussions, and Apple and AMD have yet to respond to inquiries.

TSMC’s investment in Arizona includes three advanced facilities, supported by US government subsidies aimed at revitalising domestic semiconductor production. The collaboration with Nvidia highlights the increasing global demand for AI chip technology.