NVIDIA's CEO has commented on the recent trade deal between the US and Taiwan, which requires the latter to shift a significant portion of its chip capacity to American soil.
TSMC's Shift to the US Focuses More On Adding Newer Capacity, Maintaining the Exclusivity in Taiwan
TSMC has been a major focus on the geopolitical front, given that chips are becoming a matter of 'national security' for several countries worldwide. More importantly, for Taiwan in particular, the pressure to shift chip production lines to the US has increased sharply since President Trump took office. Interestingly, with the recent US-Taiwan trade deal, it is reported that TSMC will bring 40% of its total chip output to US facilities, and NVIDIA's CEO says the deal involves adding new capacity rather than a transfer from Taiwan.
When asked by the media about the rumors that the US wants Taiwan to transfer 40% of its semiconductor production capacity to the US, NVIDIA CEO Jensen Huang pointed out that it is inappropriate to think of this issue as "transfer" but rather as "increasing" production capacity.
- UDN
NVIDIA's CEO also says that Taiwan's power constraints limit TSMC expansion plans, which is why the nation is pursuing fab plans in Europe, Japan, and the US as well. Jensen claims that the US-Taiwan trade deal is a "win-win" for both parties, enabling increased global chip output and, for America, a resilient supply chain. Following the trade deal, Taiwan announced plans to invest a total of $500 billion in the US, building on TSMC's previous commitments and indicating aggressive US expansion.
TSMC is going to have to add tremendous amounts of capacity in the next decade. And some of it will be manufactured in the United States, some of it will be in Europe, and some of it will be in Japan, and some of it will be here. A lot of it will continue to be here. So my expectation is that the demand for TSMC wafers and capacity will far exceed the amount of energy available in Taiwan.
- NVIDIA's CEO
It is also important to note that Taiwan has insisted on maintaining the development and production of core technologies in domestic grounds, and it isn't ready to compromise on its "N-2" policy. That said, given that critical R&D is outside the US, the idea of a resilient supply chain through these large-scale investments isn't entirely accurate; when we focus solely on production volume, TSMC's US expansion will contribute significantly.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel. Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
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