Taiwan Semiconductor Manufacturing Co. (TSMC) is expanding its partnerships with leading tech giants, as reports confirm that Nvidia is in discussions with TSMC to manufacture its Blackwell AI chips at the company's cutting-edge Arizona plant. The move marks another major milestone for TSMC's new facility, which is slated to begin mass production in early 2025.

Nvidia's Blackwell chips, introduced earlier this year, are designed to accelerate AI and generative computing tasks. Known for offering up to 30 times the performance of previous models, these chips have quickly gained high demand, particularly for applications like chatbots and data processing. TSMC has previously manufactured these chips in Taiwan, but under the new agreement, the Arizona plant is expected to handle the front-end production using the 4nm process.

While TSMC prepares to produce Blackwell chips in Arizona, the packaging process will remain in Taiwan, as the Arizona plant lacks the necessary chip-on-wafer-on-substrate (CoWoS) capability, which is essential for the advanced packaging of Nvidia's chips. All of TSMC's CoWoS capacity is currently housed in Taiwan. This move underscores TSMC's ongoing efforts to build a strong semiconductor ecosystem in the U.S. while maintaining its critical operations in Taiwan.

The Arizona plant is set to start production in the first half of 2025. Industry sources indicate that the factory will also produce chips for other key clients such as Apple and AMD, which have already signed agreements with TSMC. Apple is expected to manufacture its A16 processors using TSMC's N4P process, while AMD plans to produce its high-performance computing chips on TSMC's 4nm process.

Additionally, TSMC has partnered with Amkor Technology to provide advanced packaging services in Arizona. The collaboration aims to integrate CoWoS and other advanced packaging techniques into the Arizona plant, ensuring that TSMC can meet the growing demand for AI chips. As part of its strategy to strengthen the U.S. semiconductor ecosystem, TSMC's cooperation with Amkor and the planned expansion of packaging facilities in Arizona will allow the company to support a complete AI chip production line on U.S. soil.

Despite the growing demand for advanced semiconductor manufacturing in the U.S., TSMC's current packaging and testing capacity in Arizona is limited. However, with plans to increase CoWoS capabilities in both Arizona and Taiwan, the company is positioning itself to meet the surging need for AI and next-generation chips.

The Arizona plant, which is part of TSMC's broader $40 billion investment in the U.S., will be a key hub for the production of cutting-edge chips. The U.S. government has provided significant subsidies for TSMC's investment, as part of its efforts to strengthen domestic semiconductor manufacturing. As TSMC's operations in Arizona ramp up, the company is expected to play a pivotal role in the development of the U.S. AI supply chain.

In conclusion, TSMC's growing presence in Arizona, coupled with its expanding relationships with major tech players like Nvidia, Apple, and AMD, positions the company as a major player in the global semiconductor industry. With the launch of its new facilities, TSMC is set to meet the increasing demand for AI and high-performance chips while driving the future of U.S. semiconductor manufacturing.