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TSMC and Nvidia Forge Strategic Partnership to Power AI Chip Production in Arizona

AInvestThursday, Dec 5, 2024 2:00 pm ET
1min read

Taiwan Semiconductor Manufacturing Co. (TSMC) is reportedly in discussions with Nvidia to manufacture the Blackwell AI chips at its new facility in Arizona. These discussions highlight TSMC's strategic plans to expand its manufacturing capabilities beyond Taiwan and cater to the ever-growing demand for high-performance chips.

TSMC has been preparing to start production at the start of next year, aligning with Nvidia's March launch of the Blackwell chip. Designed for generative AI and accelerated computing, the chip has gained significant traction due to its impressive 30-fold speed enhancement in processing tasks like chatbot responses. This collaboration could provide the Arizona facility with another major client, adding to its significance as it gears up for mass production next year.

TSMC and Nvidia have refrained from commenting, maintaining the confidentiality of the talks. However, the plant already counts high-profile customers such as Apple and AMD, although both companies have yet to respond to requests for comment regarding their roles in this new development.

Notably, while TSMC plans to handle the frontend processing of Nvidia's Blackwell chips in Arizona, the chips will still need to be sent back to Taiwan for final packaging. The necessary CoWoS substrate capacity for Blackwell chips is currently located solely in Taiwan, emphasizing the logistical complexities involved in global semiconductor manufacturing.

As the world's largest chip foundry, TSMC's significant investment in constructing three plants in Phoenix, costing several billion dollars, is backed by substantial U.S. government subsidies aimed at revitalizing domestic semiconductor production. This move mirrors broader industry trends where geopolitical considerations are increasingly influencing manufacturing strategies.

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