Semiconductor giants AMD and NVIDIA initiate U.S. chip manufacturing at TSMC's Arizona facility.
U.S. Semiconductor Expansion: AMD and NVIDIA Invest in TSMC's Arizona Facility
In a significant move for the semiconductor industry, AMD and NVIDIA have chosen to produce their latest generation chips at TSMC's Phoenix, Arizona facility. This decision reflects a convergence of supply chain security, production capability at the forefront of semiconductor technology, and alignment with U.S. industrial policy and customer demand.
TSMC is accelerating its manufacturing capacity in Phoenix, with plans to produce 3-nanometer chips at the second fab and potentially ramping up the third fab more quickly to meet strong AI-driven demand from leading U.S. customers, including NVIDIA and Apple. The U.S. manufacturing expansion is part of a strategic effort by TSMC to diversify production away from Taiwan amid political volatility and aligns with bipartisan U.S. national security goals to enhance domestic chip production capabilities.
The investment in Arizona has ballooned from an initial $12 billion plan to over $165 billion, with a sprawling complex planned that includes six wafer fabs, two advanced packaging plants, and R&D centers. Producing chips domestically helps companies like AMD and NVIDIA reduce risks associated with overseas supply chains, including geopolitical tensions and tariffs, while benefiting from U.S. legislative support and market proximity.
AMD's decision to move part of its production pipeline to the United States aligns with its objective to enhance resilience in its supply chain, particularly for AI and data center components. The production is for AMD's next-generation silicon, as confirmed by CEO Dr. Lisa Su.
NVIDIA is also developing supercomputer production plants in Texas, in collaboration with Foxconn and Wistron, expected to ramp up to full production within 12 to 15 months. Local partnerships are providing packaging and testing services for NVIDIA's production in Arizona.
The TSMC Arizona initiative encompasses three fabs and extensive government support through the CHIPS and Science Act. The shift in production by AMD and NVIDIA reflects the growing strategic importance of chipmaking to the U.S.' national economic and technological agendas.
Dr. Su, CEO of TSMC, noted that AMD would "certainly make more AI servers in the U.S.", suggesting a localization of not just chip fabrication but also downstream assembly and deployment. The production of AI and HPC chips on U.S. soil gains symbolic and strategic importance as AI becomes increasingly central to national competitiveness and digital economies.
The manufacturing in the U.S. by both AMD and NVIDIA is expected to create hundreds of thousands of jobs and drive trillions of dollars in economic security over the coming decades. The TSMC Arizona site is a keystone in efforts to restore domestic semiconductor leadership for the U.S. government, adding thousands of direct and indirect jobs and supporting advanced applications across mobile, AI, and HPC sectors.
In conclusion, the decision by AMD and NVIDIA to produce their latest generation chips at TSMC's Phoenix, Arizona facility is a significant step towards enhancing U.S. semiconductor manufacturing capabilities and reducing dependence on overseas production. This move signals a broader realignment in the global semiconductor supply chain, with advanced chip manufacturing being more evenly distributed, albeit slowly and with substantial cost premiums. The TSMC Arizona fabs are a critical hedge against regional risks and a platform for closer integration with North American OEMs and hyperscalers.
Data-and-cloud-computing companies NVIDIA and AMD are leveraging technology in TSMC's Arizona facility to produce their latest chips, demonstrating a strategic alignment with U.S. industrial policy and customer demand, particularly for AI and data center components.
This initiative, encompassing three fabs and extensive government support through the CHIPS and Science Act, signifies a growth in data-and-cloud-computing technology within the U.S., contributing to the national competitiveness and digital economies.
