Nvidia begins US-based AI chip production in major supply chain shift

Nvidia’s shift to domestic chip production marks a significant strategic pivot for the American semiconductor leader, placing critical AI hardware manufacturing on US soil amid escalating geopolitical tensions and the Trump administration’s push for domestic production. This manufacturing expansion represents both a technological and political milestone that could reshape American semiconductor dominance while addressing supply chain vulnerabilities that have worried industry and government officials.

The big picture: Nvidia is establishing its first-ever US-based manufacturing operations for AI chips and supercomputers across Arizona and Texas facilities totaling over one million square feet.

• The company aims to produce up to half a trillion dollars of AI infrastructure in the United States over the next four years.
• Production has already begun at TSMC’s Phoenix facilities, with Texas supercomputer manufacturing expected to reach mass production within 12-15 months.

Why this matters: The move shifts production of critical AI infrastructure from Taiwan to American soil, potentially reducing geopolitical supply chain risks amid rising US-China tensions.

• Until now, Nvidia’s AI chips have been manufactured exclusively in Taiwan, creating vulnerability to regional instability.
• The company claims this initiative could create “hundreds of thousands” of jobs and drive “trillions of dollars” in economic activity in coming decades.

Key partnerships: Nvidia is collaborating with multiple manufacturers across the semiconductor manufacturing ecosystem.

• TSMC is producing Blackwell chips at its Phoenix facilities.
• Foxconn in Houston and Wistron in Dallas will manufacture complete supercomputers.
• Amkor and SPIL in Arizona will handle chip packaging and testing operations.

Political context: The announcement comes amid chaotic US trade policy developments specifically targeting electronics and semiconductors.

• The move was announced less than two weeks after the Trump administration’s new tariff rollout and contradictory messages about electronic component exemptions.
• Nvidia reportedly avoided export controls on its H20 chip by striking a domestic manufacturing deal with the Trump administration.

What they’re saying: “The engines of the world’s AI infrastructure are being built in the United States for the first time,” said Jensen Huang, Nvidia’s founder and CEO.

• Huang emphasized that American manufacturing helps “meet the incredible and growing demand for AI chips and supercomputers, strengthens our supply chain, and boosts our resiliency.”