Taiwan Plans $4B Texas Complex for Nvidia AI Supply Chain

Taiwan is reportedly planning to invest billions of dollars in developing industrial parks in the US, with a focus on building a comprehensive supply chain for major players like Nvidia Corp. and other artificial intelligence hardware makers. The initiative is starting with a complex in Texas that would cost around $4 billion to build, according to Taiwan’s Minister of Economic Affairs Kung Ming-hsin.

The facilities are expected to help smaller suppliers, which are essential to the operations of Nvidia’s main production partner, Taiwan Semiconductor Manufacturing Co., and AI server assemblers like Foxconn Technology Group. These companies will be able to set up shop in the US, thanks to the new infrastructure. This move is seen as a strategic step towards strengthening ties between Taiwan and the US.

Taiwan is also tightening export controls on artificial intelligence chips to align with US restrictions. The country plans to add AI servers and cutting-edge semiconductors to its list of controlled items under the Foreign Trade Act. Shipping restricted AI hardware to China will become a criminal offense after the measures take effect, according to Minister Kung. This move is part of Taiwan’s efforts to comply with the Agreement on Reciprocal Trade signed with the US this year.

The development comes as several Taiwanese companies have recently received approval for significant investments in the US. Quanta Computer was approved to spend $973 million to support assembling servers and peripheral equipment in Tennessee, while Wistron was given the green light to invest $150 million in a U.S. subsidiary that assembles circuit boards. The company also plans to spend another $146 million on renovating a Texas plant.

TSMC’s planned investment of over $265 billion in the US is separate from Taiwan’s economy minister’s announcement last month that Taiwanese companies are planning an additional $20 billion of investments in the country, driven by strong demand for AI applications and semiconductor products. Nvidia relies heavily on suppliers like TSMC, SK hynix, Samsung Electronics, and Micron Technology for chip manufacturing and memory, while its major customers include Microsoft, Amazon, and Meta Platforms.