Nvidia and AMD this week said they are starting production at TSMC’s new chip facility in Arizona just as U.S. President Donald Trump has vowed to levy tariffs on semiconductors a few days from now. The two events are not a coincidence, analysts told EE Times.
“Essentially, AMD and Nvidia are managing tariff uncertainty by moving production into the U.S.,” TechInsights vice chair Dan Hutcheson told EE Times. “This directly improves earnings stability, because the risk of tariff-induced cost variance is removed by producing in the U.S.”
On April 14, Nvidia said its Blackwell AI chips entered production at TSMC’s fab in Phoenix, Arizona.
“The engines of the world’s AI infrastructure are being built in the U.S. for the first time,” Nvidia CEO Jensen Huang said in a press release. “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.”
AMD CEO Lisa Su also said on April 14 that her company is starting production at TSMC Arizona.
“Being a lead high-performance computing customer for TSMC’s N2 process and for TSMC Arizona Fab 21 are great examples of how we are working closely together to drive innovation,” she said in a press statement.
TSMC Arizona’s most advanced node is N4, about two generations behind N2 in Taiwan. N4 and N2 are TSMC’s names for the 4- and 2-nm nodes.
Within the next four years, Nvidia plans to build up to half a trillion dollars of AI infrastructure in the U.S. through partnerships with Asia-based suppliers TSMC, Foxconn, Wistron, Amkor and SPIL.
The commitments support Trump’s aim to bring high-tech manufacturing back to the U.S. In February this year, Apple said it will invest more than $500 billion in the U.S. over the next four years to make servers that support Apple Intelligence, the company’s AI service.
As part of that plan, Apple became TSMC Arizona’s largest customer in January.
Buying favor
Trump’s expected use of tariffs is likely to shift more chip production to the U.S. in coming months, analysts said.
The timing of the announcements has been orchestrated for the best optics and to buy favor with the Trump administration, SemiAnalysis analyst Jeff Koch said.
“The wafer-supply agreements will have been worked out well in advance of these announcements,” Koch noted. “Trump will likely announce tariffs on semiconductors as promised. But lobbying efforts seem to be very effective—take Jensen Huang’s Mar-a-Lago dinner to save Nvidia China sales as the best example. Many of the large and powerful American semiconductor firms will likely win some exemptions. More than anything, there is uncertainty here as to the scope, permanence and details of the measures.”
The “Trump Effect,” if anything, has been to use tariffs to try and force through deals that were already in the pipeline and then claim credit for them as contributing to U.S. job creation and onshoring of some manufacturing capability, said Paul Triolo, who advises global tech clients at Washington, D.C.-based Albright Stonebridge Group.
“Making the timing seem to be in sync with tariffs and Trump administration preferences at this point appears to be the best way to garner support for deals that would likely have happened anyway,” he said.
Made in the U.S.
The tariffs may result in all chips used in the U.S. being made in the U.S., Moor Insights chief analyst Patrick Moorhead said.
“I expect all major chip companies whose chips wind up being used in the U.S. to be manufactured either at TSMC Arizona, Intel, Samsung or Global Foundries,” he said. “I expect something to be announced in the next month or so related to Intel. TSMC cannot currently handle everybody, and I think we will see some large companies do deals with Intel.”
TSMC’s sales of chips made with older nodes in Taiwan may be impacted by the upcoming U.S. tariffs, spurring a shift of orders to Intel Foundry in the U.S., Koch said.
“Fabless TSMC customers will likely move some portion of older or less critical product lines to Intel Foundry if the tariffs go into effect as promised. For example, Nvidia is likely to produce some of its lower-end consumer gaming GPUs with Intel Foundry.”
TSMC started making the first 4-nm chips in the U.S. for Apple in January this year.
Intel is ramping up its 18A process, on a par with TSMC’s leading 2-nm node, in the U.S. later this year.
Some analysts remain skeptical about Intel winning more foundry business.
“So far there is little indication that either Nvidia or AMD is pursuing Intel as a second option, particularly because Intel’s advanced foundries in Arizona do not appear to be fully operational for high-volume production, and facilities in Ohio have been put on hold until 2030,” Triolo said.
Order overflow?
TSMC Arizona’s advanced-node capacity is roughly 20% of TSMC’s in Taiwan, so the U.S. facility may fall short if multiple customers start asking for “serious” wafer volumes, Koch said. TSMC customers at leading-edge nodes will still rely on Taiwan, he added.
“If the tariffs are really put into effect, without any loopholes, no doubt fabless customers will be demanding TSMC Arizona capacity,” Koch said.
Intel Foundry’s advanced packaging located in the U.S. may provide the company an edge over TSMC.
“TSMC cannot provide advanced packaging in the U.S. short-term,” Koch said. “The joint facility planned with Amkor won’t be online for another year or two. In the meantime, Intel is well positioned to provide onshore advanced-packaging capacity at its New Mexico facility.”
TSMC does most of the world’s advanced packaging in Taiwan for AI chip designers like Nvidia and AMD.
It is likely that most of the wafers produced for Nvidia in Arizona will have to be shipped back to Taiwan for packaging at TSMC’s CoWoS facilities, Triolo said.
“The volume of production of advanced GPUs, for example, in Arizona would have to reach the point where it would make sense commercially to site an advanced packaging facility that could do CoWoS (TSMC’s proprietary technology) and other advanced packaging approaches,” he said.
Moving the advanced-packaging portion of the supply chain to the U.S. is a goal, Moorhead said.
“It would beat having the wafers done in the U.S., sent out to be packaged and then taxed and sent back over,” he said.
oringinal link：Nvidia, AMD Ramp at TSMC Arizona as U.S. Tariffs Loom - EE Times
