TSMC Eyes Nvidia Partnership to Propel AI Chip Production in Arizona
TSMC is in advanced discussions with Nvidia to produce next-gen Blackwell AI chips at its Arizona facility.
Taiwan Semiconductor Manufacturing Company (TSMC) and Nvidia are in advanced talks about making Nvidia’s next-generation Blackwell artificial intelligence (AI) chips at TSMC’s new plant in Arizona.
TSMC is getting ready to start making things at the Arizona plant early next year, which is why the talks are happening now. Nvidia’s Blackwell chips, which were first shown off in March, are currently made in TSMC’s factories in Taiwan. People are really interested in these chips because they are fast and good at generative AI and rapid computing. They are also said to be 30 times faster than their predecessors at things like interacting with chatbots.
A Strategic Move for U.S. Chipmaking
Its approval would be a significant achievement for TSMC’s $40 billion Arizona project that is becoming a crucial component of the U.S. Chips initiative. Currently it is expected to begin high-volume production in the year 2011 but it has also received orders from other customers of a similar stature like Apple and AMD.
But there is one catch. The Arizona plant doesn’t have chip-on-wafer-on-substrate (CoWoS) packing technology, which is needed to make Nvidia’s high-tech Blackwell chips. Sources say that even though the front-end production will happen in Arizona, the chips will still need to be sent back to Taiwan for final packing.
TSMC hasn’t set up any CoWoS capacity outside of Taiwan yet, which is where all of its current operations for this unique process are located.
TSMC is receiving a lot of money from the U.S. government to aid in its expansion in Arizona. This is part of Washington’s broader strategy to get fewer inputs from chipmakers in other countries as tensions escalate. It is a part of the $52 billion CHIPS and Science Act program to open the manufacturing of chips again in the United States.
Both Nvidia and TSMC refused to say anything about the talks that were still going on. Sources say that Apple and AMD are currently customers of the Arizona plant, but they did not respond to calls for comment either.
The possible partnership between Nvidia and TSMC shows how much the global tech industry needs cutting-edge AI chips. As the use of AI grows, big companies are working together with advanced manufacturers to make sure there is a steady supply line for important parts.
If this happens, it could make TSMC’s position in the U.S. market much stronger and help Nvidia meet the rising demand for its high-performance Blackwell chips.
