Nvidia's US$500 Billion AI Push: A Game-Changer for Taiwan and US Manufacturing

Jensen Huang's Vision: AI Infrastructure Boom in the US with Key Taiwanese Partnerships

Nvidia Corp, the undisputed leader in artificial intelligence (AI) chips, is set to inject up to US$500 billion into AI infrastructure in the United States over the next four years. This ambitious plan, facilitated through strategic manufacturing partnerships, signifies a major shift in the global technology landscape, with significant implications for Taiwan and the US.

Production of Nvidia’s cutting-edge AI chip, known as Blackwell, has already commenced at Taiwan Semiconductor Manufacturing Co (台積電)'s new facility in Phoenix, Arizona, the company announced. This marks a crucial step in Nvidia's strategy to bolster its US presence and cater to the surging demand for AI hardware.

Furthermore, Nvidia is collaborating with Foxconn Technology Group (富士康科技集團), also known as Hon Hai Precision Industry Co (鴻海精密) in Taiwan, and Wistron Corp (緯創) to establish supercomputer manufacturing plants in Texas. This collaborative approach highlights the interconnectedness of the global tech ecosystem, with Taiwanese companies playing a pivotal role in realizing Nvidia's vision.

Jensen Huang (黃仁勳), Nvidia's chief executive officer, emphasized the importance of this move, stating, "Adding American manufacturing helps us better meet the incredible and growing demand for AI chips and supercomputers, strengthens our supply chain and boosts our resiliency."

The US$500 billion figure encompasses the combined value of goods Nvidia anticipates selling within the AI supply chain, largely driven by commitments from major cloud computing companies to upgrade their data centers with the latest technology. Companies like Microsoft Corp, Amazon.com Inc, and Meta Platforms Inc are projected to spend US$371 billion this year on AI facilities and computing resources, reflecting a 44 percent increase from the previous year, according to a recent Bloomberg Intelligence report.

This initiative is also hailed as a milestone, as it marks the first time AI supercomputers will be produced in the US, a point emphasized by US President Donald Trump. He suggested the decision was influenced by tariffs. Fiona Cincotta, a City Index analyst, highlighted the move as a key achievement, aligning with the goals of bringing manufacturing back to the US.

Nvidia's stock saw initial gains after the announcement, demonstrating the market's positive reaction. Each Blackwell chip commands a high price point, with servers containing these semiconductors reaching millions. This underscores the massive scale of the project, potentially involving hundreds of thousands of AI-oriented servers.

Nvidia also partners with Amkor Technology Inc and Siliconware Precision Industries Co (矽品精密) for packaging and testing operations in Arizona. The "mass production" at the Foxconn and Wistron plants is scheduled to ramp up in the next 12 to 15 months, signaling the rapid expansion of this AI infrastructure project.

The announcement comes amid shifting trade policies, adding another layer of complexity to the global electronics market, including chipmakers, and is subject to potential tariff regulations.