As Trump prepares to tariff foreign-made semiconductors, Nvidia is going out of its way to announce plans for two new Texas factories focused on manufacturing parts for AI supercomputers.

Nvidia will build the first factory in Houston with iPhone supplier Foxconn. The second one will be in Dallas, built with the help of Wistron, a contract electronics manufacturer from Taiwan.

The resulting facilities will span “more than a million square feet of manufacturing space” with the goal of both building AI supercomputers and testing chips from Taiwan’s TSMC, which is developing six semiconductor fabs in Arizona.

“Mass production at both plants is expected to ramp up in the next 12-15 months,” Nvidia said in Monday’s announcement.

CEO Jensen Huang also says the investment is the first time Nvidia will be building AI supercomputers entirely in the US. “Adding American manufacturing helps us better meet the incredible and growing demand for AI chips and supercomputers, strengthens our supply chain and boosts our resiliency,” he said.

The investment will also help the company avoid Trump’s trade war. Last week, the president threatened to impose massive tariffs on numerous countries—including a cumulative 145% tariff on Chinese imports—before abruptly dialing back his approach and issuing exemptions on electronics and PC parts. Still, Trump and his commerce secretary have warned they still plan on tariffing foreign-made chips and electronics in a “month or so.”

Such tariffs could impose huge costs on Nvidia’s business, which primarily relies on chip and hardware manufacturing in Asia. But last month, Huang signaled that his company was preparing to migrate more manufacturing to the US when tech companies, including OpenAI, are buying hundreds of thousands of enterprise-grade GPUs from Nvidia.

“Within the next four years, Nvidia plans to produce up to half a trillion dollars of AI infrastructure in the United States," the company added on Monday.

However, Nvidia’s announcement didn’t mention any US-based manufacturing for consumer-grade graphics cards; most, if not all, are produced in China. Still, many PC component vendors have said they plan on migrating manufacturing away from China to other markets such as Vietnam and Taiwan to avoid the tariffs.

By: DocMemory
Copyright © 2023 CST, Inc. All Rights Reserved