Nvidia is increasing its U.S.-based manufacturing operations, allocating over a million square feet across Arizona and Texas for the production and testing of AI chips.
Highlights
The expansion reflects a strategic effort to localize part of its advanced semiconductor operations amid evolving global supply chains and geopolitical shifts.
Production for Nvidia’s latest AI chip architecture, known as Blackwell, has already begun at TSMC’s facility in Phoenix.
Nvidia is working with Foxconn in Houston and Wistron in Dallas to establish manufacturing facilities for AI supercomputers. In Arizona, partners Amkor and SPIL are managing chip packaging and testing operations.
Mass production at the Texas sites is expected to scale over the next 12 to 15 months. Looking further ahead, Nvidia projects up to $500 billion in U.S.-based AI infrastructure production over the next four years.
CEO Jensen Huang described this as a pivotal development in the evolution of AI manufacturing. In a company statement, Huang noted that expanding U.S. manufacturing will help Nvidia meet growing demand, strengthen its supply chain, and improve operational resilience.
This domestic push aligns with broader federal initiatives to reestablish semiconductor manufacturing within the United States.
The timing follows reports suggesting that Nvidia’s H20 chip—one of its advanced models—was allowed to continue sales in China after Nvidia committed to increasing U.S.-based manufacturing tied to AI data centers, as reported by NPR.
Other major technology firms have adopted similar strategies. OpenAI has joined forces with SoftBank and Oracle to launch the Stargate Project, a proposed $500 billion investment in U.S. data centers.
Microsoft, meanwhile, plans to allocate $80 billion toward building AI data infrastructure during its 2025 fiscal year, with about half of that investment slated for U.S.-based projects.
Industry developments also reflect growing political pressure to localize critical technologies.
For example, reports suggest that former President Trump warned TSMC of potential 100% tariffs unless it committed to building chip fabrication facilities in the United States—part of broader efforts to strengthen domestic AI infrastructure.
Fully U.S.-Built AI Supercomputers
Nvidia has announced plans to produce AI supercomputers entirely within the United States, marking the first time these systems will be manufactured domestically.
Strategic Facility Locations and Partnerships
- TSMC in Arizona: Production of Blackwell AI chips is underway at TSMC’s Phoenix facility.
- Foxconn and Wistron in Texas: Supercomputer manufacturing plants are being developed in Houston and Dallas.
- Amkor and SPIL in Arizona: These companies will manage packaging and testing of Nvidia chips.
Projected Economic Impact
Nvidia anticipates that its U.S. manufacturing efforts could result in the production of up to $500 billion in AI infrastructure and generate hundreds of thousands of jobs over the next four years.
Alignment with Federal Policy Goals
The initiative appears to align with U.S. government efforts to reduce reliance on foreign semiconductor production. Nvidia’s domestic expansion reportedly played a role in avoiding tighter export controls on certain AI chips.
Broader Industry Movement
Nvidia’s move is part of a larger shift across the tech sector toward U.S.-based infrastructure investments. Several companies, including Apple, have announced similar commitments aimed at reinforcing domestic capabilities.
Considerations and Potential Challenges
While the economic promise of these initiatives is considerable, there are potential obstacles. Tariff threats and global trade tensions may complicate access to key materials, while the U.S. semiconductor industry continues to face a shortage of skilled labor.
These challenges could affect the pace and scalability of domestic manufacturing efforts.
There is also uncertainty surrounding the future of the CHIPS Act, the 2022 legislation aimed at bolstering U.S. chip production through federal incentives.
Proposed revisions or rollbacks under changing administrations could influence long-term investment decisions within the sector.
As Nvidia accelerates its commitment to manufacturing AI hardware in the United States, the intersection of market demand, policy frameworks, and international trade dynamics will play a critical role in shaping the next phase of America’s semiconductor landscape.
