Nvidia, the world’s most valuable semiconductor company, has announced plans to invest several hundred billion dollars in US-based manufacturing over the next four years.
This move signals a shift in the company’s supply chain strategy, influenced by trade policies and geopolitical risks.
Jensen Huang, Nvidia’s CEO and co-founder, stated that the company expects to procure around half a trillion dollars worth of electronics in the coming years, with a significant portion of that investment dedicated to US production. This decision reflects a broader trend among technology giants like Apple, which are rethinking their supply chain strategies due to trade uncertainties.
For years, Nvidia and other major US tech firms have relied heavily on semiconductor production in Taiwan, particularly through manufacturers such as Taiwan Semiconductor Manufacturing Company (TSMC) and Foxconn. However, concerns over potential tariffs, supply chain disruptions, and geopolitical tensions between China and Taiwan have prompted companies to diversify their manufacturing locations.
Huang’s announcement highlights the influence of trade policies on corporate investment decisions. Former US President Donald Trump’s “America First” policy encouraged domestic manufacturing, a trend that continues to shape industry strategies. Huang noted that having an administration that supports the AI industry could accelerate US leadership in the sector.
The semiconductor industry has been at the center of US-China tensions. While the US has restricted exports of Nvidia’s advanced AI chips to China, Chinese companies like Huawei have made significant advancements in semiconductor technology. Huang acknowledged Huawei’s growing presence in AI and described the company as a formidable competitor.
Efforts to bolster US semiconductor production have been supported by TSMC’s recent $100 billion investment in Arizona, which complements an earlier $65 billion commitment made under the Biden administration. Nvidia’s latest Blackwell AI chips are already being produced in the US, enhancing supply chain resilience.
In addition to TSMC, Intel has been working to expand its foundry business to compete with Asian manufacturers. While Nvidia has not committed to using Intel’s chipmaking services, Huang emphasized that the company continues to evaluate Intel’s technology and potential role in its supply chain.
With input from the Guardian and the Financial Times.
