Recently, three informed sources revealed that Taiwan Semiconductor Manufacturing Company (TSMC) and Nvidia are in talks to produce the Blackwell artificial intelligence chip at TSMC’s new factory in Arizona. Blackwell is Nvidia’s next-generation flagship AI chip.
According to a report by Reuters on Thursday, Nvidia’s Blackwell chip, which was launched in March this year, is currently being manufactured at TSMC’s Taiwan plant. Nvidia stated that there is high demand for the Blackwell chip in the generative AI and accelerated computing fields, with supply unable to meet the demand. The Blackwell chip has shown a 30-fold increase in speed in providing answers for chatbots.
If an agreement is reached between these two companies, Nvidia will become another customer of TSMC at their new factory in Arizona. Apple and Advanced Micro Devices (AMD) are already customers at this factory.
Sources mentioned that TSMC is preparing to start production at the new factory in early next year. Both TSMC and Nvidia declined to comment on this matter.
The informed sources explained that TSMC plans to produce the front-end part of the Blackwell chip in Arizona, while the chips will still need to be sent back to Taiwan for packaging because the facility in Arizona lacks the packaging capability for the chip’s crucial technology called Chip on Wafer on Substrate (CoWoS). Currently, all of TSMC’s CoWoS packaging capacity is concentrated in Taiwan.
TSMC is the world’s largest contract chip manufacturer and is currently investing billions of dollars in constructing three factories in Phoenix, Arizona. This project has received substantial support from the U.S. government, as they aim to bring the semiconductor manufacturing industry back to the United States.