Reuters reported, that Taiwan Semiconductor Manufacturing Company (TSM, Financial) is in talks with Nvidia (NVDA, Financial) to build the Blackwell AI processors at TSMC's upcoming Arizona plant. Already among Apple (AAPL, Financial) and Advanced Micro Devices (AMD, Financial), this plant could potentially be a pillar of the U.S. semiconductor strategy. Originally releasing its Blackwell chips in March, Nvidia had relied upon manufacturing TSMC's facilities in Taiwan to satisfy consumers for rapid computing and artificial intelligence.
Driven by strong demand for generative AI solutions, Nvidia's stock has surged more than 22% over the previous three months and 193% year-to-date. With shares rising over 30% over the past three months, TSMC is getting ready to start chip manufacturing at the Arizona plant early 2025. Though the plant will handle front-end production of Nvidia's chips, packaging will still take place in Taiwan since the U.S. site lacks chip-on-wafer-on-substrate (CoWoS) capacity. For Nvidia's advanced artificial intelligence processors, CoWoS is a crucial process; all TSMC CoWoS capabilities now live in Taiwan. Supported by the Biden administration's CHIPS Act, which seeks to boost U.S. semiconductor manufacturing, with the Arizona facility being part of TSMC's $65 billion private investment.
