Taiwan Semiconductor, Nvidia in talks to make AI chips at Arizona plant – report

Taiwan Semiconductor Manufacturing (NYSE:TSM) is in talks with Nvidia (NASDAQ:NVDA) to produce its Blackwell AI chips at the Taiwanese company’s new plant in Arizona, Reuters reported, citing people with knowledge of the matter.

TSM is already making preparations to begin manufacturing early next year, the report added.

Nvidia’s Blackwell chips were introduced by in March and have so far been made at TSMC’s facilities in Taiwan. Nvidia has seen high demand for the chips from customers involved in generative AI and accelerated computing.

The agreement, if it comes to fruition, would secure another customer for TSM’s Arizona plant, which is slated to begin volume production in 2025, the report noted.

Apple (AAPL) and Advanced Micro Devices (AMD) are currently customers at the Arizona facility, according to the report.

TSM intends to make the front-end process of Nvidia’s Blackwell chips in Arizona but the processors will still need to be shipped back to Taiwan for packaging. The Arizona plant does not have chip on wafer on substrate, or CoWoS, capacity which is required for the Blackwell chips, the report added.

Currently, all of TSM’s CoWoS capacity is in Taiwan, as per the report.

Last month, the Biden administration finalized its Chips Act incentive agreement with TSM, noting that the deal would spur $65B of private investment to build three facilities in Arizona and create tens of thousands of jobs by the end of the decade.