Taiwan Semiconductor Manufacturing Co (TSMC) and Nvidia Discussions

By Wen-Yee Lee and Fanny Potkin

TAIPEI/SINGAPORE (Reuters) – Taiwan Semiconductor Manufacturing Co (TSMC) is in talks with Nvidia Corp to produce its Blackwell artificial intelligence chips at TSMC's new plant in Arizona, according to three sources familiar with the discussions.

TSMC is preparing to start production early next year.

Nvidia's Blackwell chips, unveiled in March, have been manufactured at TSMC's facilities in Taiwan. There is high demand for these chips from customers involved in generative AI and accelerated computing. Nvidia claims the Blackwell chips are 30 times faster than previous models for tasks like chatbot responses.

If the agreement is finalized, it would secure another customer for TSMC's Arizona facility, expected to begin volume production next year.

Both TSMC and Nvidia have declined to comment on the discussions, and the sources chose to remain anonymous given the confidentiality of the talks.

Two sources mentioned that Apple and Advanced Micro Devices (AMD) are current customers at the Arizona plant. Requests for comments from Apple and AMD went unanswered.

While TSMC plans to produce the front-end process of Nvidia's Blackwell chips in Arizona, these chips will still be sent back to Taiwan for packaging. The Arizona facility currently lacks the chip on wafer on substrate (CoWoS) capacity essential for the Blackwell chips, as all of TSMC's CoWoS capacity is in Taiwan.

As the world's largest contract chipmaker, TSMC is investing tens of billions in building three facilities in Phoenix, with significant subsidies from the U.S. government aimed at boosting domestic semiconductor manufacturing.