NVIDIA’s Blackwell GPUs: Assembled in the US, Packaged in Taiwan

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NVIDIA Eyes TSMC for Cutting-Edge Blackwell GPU Production in Arizona

The Taiwan Semiconductor Manufacturing Company (TSMC) may have achieved a significant milestone with its new chip manufacturing facilities in Arizona. Reports indicate that NVIDIA is in negotiations with TSMC to produce its highly sought-after Blackwell artificial intelligence (AI) graphics processing units (GPUs) at this location. As leading tech companies race to secure these critical chips for advanced AI applications, NVIDIA’s Blackwell GPUs have emerged as some of the most coveted components in the tech landscape. This information was shared by Reuters, citing three informed sources.

Production Timeline and Technological Advancements

According to insiders, TSMC plans to commence production of Blackwell GPUs in Arizona by 2025. This development follows the recent announcement of a substantial $6.6 billion funding approval from the Biden-Harris Administration aimed at bolstering TSMC’s operations in the state. The funding will facilitate the establishment of three manufacturing facilities at the Arizona site. The first facility is expected to begin production in the first half of 2025, while the subsequent two are projected to start operations in 2028 and by the end of the decade, as stated by the Department of Commerce.

Manufacturing Technologies Used in Blackwell GPUs

The initial plant is designed to leverage TSMC’s advanced 4-nanometer and 5-nanometer manufacturing technologies. Meanwhile, TSMC’s latest 3-nanometer technology, currently in use for smartphones and personal computing devices, represents the forefront of chip manufacturing excellence. Notably, high-performance computing products like GPUs often utilize slightly older, more mature technologies that are better suited to handling complex computational tasks.

Challenges Ahead: Packaging Bottlenecks

Despite the potential for TSMC to secure orders from NVIDIA, significant challenges remain, particularly regarding the packaging of the AI chips. Packaging, which entails assembling chips into their final, usable format, has been identified as a critical bottleneck in the production process. Reports indicate that if TSMC proceeds with production of Blackwell GPUs in Arizona, the chips may need to be shipped back to Taiwan for packaging. NVIDIA’s Blackwell GPUs employ TSMC’s innovative chip-on-wafer-on-substrate (CoWoS) technology, necessitating substantial investment in packaging capabilities to meet the soaring demand for AI technologies.

Investment in Packaging Infrastructure

To address these challenges, TSMC is reportedly planning to invest up to $16 billion to enhance its packaging capacity. If the company proceeds with the shipping and packaging model, any delays may be temporary. Furthermore, TSMC has established a partnership with Amkor, a packaging firm based in Arizona, to implement CoWoS and Integrated FanOut (InFO) packaging technologies at the Arizona facility.

Industry Implications and Future Contracts

The dynamics of this collaboration are crucial, especially considering the past complexities between TSMC and NVIDIA regarding packaging capabilities. Sources within Taiwan indicate that TSMC previously declined NVIDIA CEO Jensen Huang’s request for a dedicated packaging line for NVIDIA products at its facilities. Additionally, reports suggest that AMD and Apple have also engaged in contracts to procure chips from the Arizona site, though neither company has confirmed this information publicly. However, Apple CEO Tim Cook did affirm in 2022 that the company would utilize chips manufactured in Arizona.

As TSMC and NVIDIA continue their discussions, the outcome could significantly influence the landscape of AI chip production and the broader semiconductor market.

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