Taiwan Semiconductor Manufacturing (TSM, Financial) is in the spotlight as whispers grow louder about its talks with Nvidia (NVDA, Financial) to manufacture Blackwell AI chips at its shiny new Arizona facility. This isn’t just any chip—it’s Nvidia’s crown jewel, boasting speeds up to 30 times faster for AI tasks like chatbot responses. The Arizona plant is gearing up for production in early 2024, and if this deal goes through, Nvidia will join heavyweights like Apple and AMD in Taiwan Semiconductor Manufacturing's U.S. portfolio.
But here’s the catch: Arizona’s plant will only handle the first stage of production. The chips still need to be shipped back to Taiwan for advanced packaging—specifically, Chip-on-Wafer-on-Substrate (CoWoS) tech that the Arizona facility doesn’t have. Despite pouring $65 billion into its U.S. operations, Taiwan Semiconductor Manufacturing’s reliance on Taiwan for these critical steps underscores how the semiconductor supply chain remains a global balancing act. And let’s not forget, this whole U.S. expansion effort is fueled by $6.6 billion in subsidies from Uncle Sam.
For investors, this is a big deal. Taiwan Semiconductor Manufacturing’s move signals its determination to capture more business in the AI gold rush while aligning with U.S. policies to onshore chip manufacturing. Nvidia, meanwhile, keeps flexing its dominance in generative AI, with demand for its chips seemingly insatiable. Between Taiwan Semiconductor Manufacturing’s bold Arizona play and Nvidia’s unstoppable growth, this story is just heating up—and the opportunities for investors could be just as sizzling.
