Taiwan Semiconductor Manufacturing (TSMC) is currently in discussions with Nvidia that could lead to the chipmaker’s highly sought-after artificial intelligence chips being produced at TSMC’s new plant in Phoenix, Arizona, according to a recent report by Reuters.
TSMC currently produces Nvidia’s Blackwell chips, the company’s latest AI chip, at its factory in Taiwan. If the two companies end up making a deal to relocate the production, the chips would reportedly still need to be sent to Taiwan for packaging due to lack of chip on wafer on substrate (CoWoS) capacity.
TSMC is reportedly optimistic about the outcome of the talks and is already making preparations to start Blackwell production in Arizona. Blackwell chip has been in high demand due to its advanced performance and has been sold out for the next 12 months. The demand was previously expected to exceed the supply at least until 2026, but that might change if the chip ends up being produced in the state-of-the-art Phoenix plant.
TSMC currently plans to invest a total of $65 billion in building three chip factories in Arizona. The first factory is expected to be operational in the first part of 2025, the second in 2028, and the third one by the end of the decade.
The first plant, which is already gearing up for volume production, previously secured deals with Apple and Advanced Micro Devices (AMD).