Taiwan is reinforcing its role at the center of the global AI chip supply chain as Nvidia Corp (NASDAQ:NVDA) deepens its footprint on the island and Taiwan Semiconductor Manufacturing Company Ltd (NYSE:TSM) pushes ahead with overseas expansion.
Taiwan Greenlights Nvidia's $105M Headquarters Plan
Taiwan's government approved Nvidia's plan to build a NT$3.3 billion ($105 million) headquarters on the island, strengthening the chipmaker's presence in the critical semiconductor hub.
The Ministry of Economic Affairs said Nvidia will use the Taipei site as a commercial office and acquire land to develop a comprehensive business park, SCMP reported on Thursday.
The approval came one day before Taiwanese media reported that Nvidia founder and CEO Jensen Huang was expected to arrive in Taiwan for events that could include a meeting with Taiwan Semiconductor Chairman and CEO C.C. Wei.
AI Boom Tightens Nvidia–TSMC Ties
Recently, Nvidia overtook Apple Inc (NASDAQ:AAPL) as Taiwan Semiconductor’s largest customer as the AI frenzy shifted industry priorities.
Counterpoint analyst David Wu told SCMP that Nvidia needs to build a large local R&D team to work closely with Taiwan Semiconductor on a daily basis, and help the company manage a complex AI server supply chain involving key partners in mainland China and Southeast Asia.
Reportedly, Huang had spent the six days in mainland China holding meetings while Nvidia awaited regulatory approval for its H200 chip.
Last October, Nvidia became the first company to top the $4.5 trillion market cap, signifying how the AI boom fueled demand for its AI GPUs.
TSMC Expands Abroad As Tariffs And AI Pressures Build
At the same time, Taiwan Semiconductor is expanding geographically to move closer to major customers like Nvidia and Apple while lowering the geopolitical risk tied to its heavy concentration in Taiwan.
A new U.S.-Taiwan trade agreement has reinforced that shift.
The chipmaker is centering its U.S. strategy on Arizona, where it plans to invest tens of billions of dollars to add multiple fabs and build a large "gigafab" cluster.
The chipmaker has already purchased additional land after determining its original site was too small for long-term growth, accelerated construction timelines for new plants, and advanced permitting for future facilities.
At the same time, rising global AI demand and tariff-related pressure from Washington have pushed Taiwan Semiconductor to diversify its manufacturing footprint beyond Taiwan.
Price Action: Nvidia shares were down 0.61% at $190.34 and Taiwan Semiconductor shares were down 1.11% at $338.50 at the time of publication on Thursday, according to Benzinga Pro data.
Photo via Shutterstock
