NVIDIA’s Blackwell GPUs Might Be Made In US But Shipped To Taiwan For Packaging

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The Taiwan Semiconductor Manufacturing Company’s (TSMC) new chip manufacturing facilities in Arizona might have scored a big win, as sources suggest that NVIDIA is in talks with the company to produce its leading-edge Blackwell artificial intelligence graphics processing units (GPUs) at the site. NVIDIA’s Blackwell GPUs are among the hottest commodities in the world as big tech scurries to procure the chips and train and operate the latest AI models. The report comes courtesy of Reuters, which quotes three sources that are knowledgeable about the discussions.

TSMC Is Aiming To Start Blackwell Production In Arizona In 2025, Suggest Insiders

TSMC scored a major win last month after the Biden-Harris Administration finalized a whopping $6.6 billion in funding for the firm’s Arizona plants. The award covers three new manufacturing facilities at the Arizona site. The first of these is slated to start production in the first half of 2025, while the other two will start production in 2028 and by the end of the decade according to the Department of Commerce.

The first plant will manufacture chips using TSMC’s 4-nanometer and 5-nanometer manufacturing technologies. The Taiwanese firm’s latest chip making technology is the 3-nanometer process that is currently used in smartphone and personal computing applications. High performance computing products such as GPUs typically rely on slightly older technologies as they are mature enough to withstand loads from computing large and complex workloads.

In a fresh report, Reuters claims that TSMC and NVIDIA are in discussions about producing NVIDIA’s Blackwell GPUs in Arizona. The publication cites three sources with internal knowledge of the matter. If their claims are true, then it is likely that the Blackwell GPUs are built using either TSMC’s 4-nanometer or 5-nanometer process technologies since the sources add that TSMC is gearing up to kick off production in 2025.

Yet, despite the fact that TSMC might win NVIDIA’s orders for its Arizona facilities, packaging remains a key bottleneck for the site’s AI chip production needs. Packaging is part of the process of assembling the chips in a final usable form, and according to Reuters’ sources, if TSMC produces Blackwell GPUs in Arizona, then it will ship them back to Taiwan for packaging. Blackwell is packaged with TSMC’s chip-on-wafer-on-substrate, or CoWoS, technology, and the fab has invested substantial amounts to expand its packaging capacity to meet AI demand.

Packaging was one of the earliest bottlenecks identified by analysts for AI chip production. As per Taiwanese industry news, the firm plans to invest as much as $16 billion to expand its packaging capacity. If it does produce Blackwell GPUs in Arizona and ship them to Taiwan for packaging, then the entire ordeal might be temporary.

As part of its plans for the Arizona site, TSMC announced a deal with Arizona-based packaging firm Amkor to add CoWoS and Integrated FanOut (InFO) packaging capabilities to the Arizona site. Packaging has also been a potentially contentious issue between NVIDIA and TSMC, with sources in Taiwan claiming that TSMC colorfully turned down a request from NVIDIA CEO Jensen Huang to set up a dedicated packaging line for NVIDIA’s products.

The sources also shared that AMD and Apple have signed up to procure chips from the Arizona site. Neither firm commented on the report, but Apple CEO Tim Cook confirmed in 2022 that his firm would use chips from Arizona.