TSMC (TSM, Financial) is in discussions with NVIDIA (NVDA) to produce Blackwell AI chips at its new Arizona facility. Preparations for production are underway, targeting early next year. Previously, these chips were manufactured in Taiwan, but high demand from customers in generative AI and accelerated computing has prompted NVIDIA to consider expanding production.
If the deal proceeds, it would add NVIDIA as a client for TSMC's Arizona plant, which plans to start mass production in 2025. Current clients include Apple (AAPL) and AMD. While TSMC aims to handle the front-end process in Arizona, final packaging will still occur in Taiwan due to CoWoS capacity constraints.
Last month, the U.S. government finalized an incentive agreement with TSMC under the Chips Act, aiming to boost private investment and job creation in Arizona.
