NVIDIA Unveils First Arizona-Made Blackwell Wafer Highlighting U.S. Chip Manufacturing Challenges: Domestic Production Requires Overseas Completion

NVIDIA has made a significant stride in microchip manufacturing with its recent announcement regarding the successful production of Blackwell chip wafers on American soil. Nonetheless, a critical aspect of the AI supply chain remains reliant on overseas facilities.

NVIDIA and its Partners’ Offshore Dependence for Advanced Packaging Services

Recently, NVIDIA’s CEO Jensen Huang highlighted a major milestone: the unveiling of the first Blackwell chip wafer produced in the United States at TSMC Arizona. This achievement supports the “Made in USA”movement. However, there is a significant gap in the current infrastructure—specifically, advanced packaging services—which complicates matters further. The earliest Blackwell wafer is expected to be shipped back to Taiwan for proper processing, as crucial technologies such as TSMC’s CoWoS (Chip on Wafer on Substrate) are not yet available domestically.

The press release didn’t make it clear that after the first Nvidia Blackwell wafer was produced in the U. S., it would still need to be shipped to Taiwan for CoWoS advanced packaging — only then would the production of the Blackwell chip be considered complete. Two years from now, … pic.twitter.com/15O2ZTvhbu

— Ming-Chi Kuo (@mingchikuo) October 19, 2025

Advanced packaging represents a crucial component of semiconductor manufacturing, particularly in the context of the burgeoning AI sector. The Blackwell chip wafer, when held by Jensen Huang, is merely an ‘unrefined’ piece of silicon at this stage. Typically, chips must undergo a slicing process, breaking the wafer into individual dies, which are then mounted onto substrates and interconnected using methods like CoWoS or Intel’s Embedded Multi-die Interconnect Bridge (EMIB).This packaging process is essential for enhancing the performance of AI chips by facilitating efficient stacking and integration with minimal interconnect lengths.

The lack of advanced packaging capabilities in the U. S.forces manufacturers to rely on Taiwanese facilities. This not only leads to logistical challenges but also incurs additional costs for producing Blackwell AI chips, complicating the supply chain landscape. Fortunately, industry leaders are aware of this issue, and efforts are underway to address it.

NVIDIA Blackwell chips — Image Credits: NVIDIA

In response to these challenges, TSMC has committed to enhancing its advanced packaging services in the U. S.as part of a substantial multi-billion dollar investment plan. Establishing these capabilities from the ground up will be no small feat and could take several years. To expedite this process, TSMC is collaborating with Amkor Technology, an American provider of packaging and test services, aiming to expedite the integration of technologies such as CoWoS into the domestic market. This partnership will facilitate a quicker time-to-market for AI chips, serving as a crucial step in building a balanced semiconductor supply chain.

The recognition of the need for a robust supply chain encompassing both front-end and back-end processes is pivotal. With the proactive investments from industry giants like TSMC, the U. S.is poised to produce some of the world’s most advanced AI chips on its own soil, marking a significant shift in semiconductor manufacturing dynamics.

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