Taiwan Semiconductor Manufacturing Company (TSMC) needs to “work very hard” to meet growing demand from leading US chip designer Nvidia, which alone could require TSMC to more than double its capacity in the next decade, Nvidia CEO Jensen Huang has said.

Huang’s remarks followed a high-profile banquet on Saturday evening with executives of key supply chain partners in Taiwan, including TSMC chairman and CEO C C Wei and Foxconn chairman Young Liu, as the Nvidia founder sought to shore up supply amid a production crunch on critical inputs for artificial intelligence infrastructure such as memory chips.

Speaking outside the restaurant, Huang said that TSMC must increase output this year as Nvidia “needs a lot of wafers”.

“TSMC is doing an incredible job and they’re working very, very hard,” he said. “We have a lot of demand this year.”

Nvidia, based in Santa Clara, California, relies on a host of Taiwanese firms to manufacture and scale its cutting-edge computing solutions, including TSMC for advanced packaging and wafers and Foxconn for servers. Last month, TSMC said capital spending could jump up to 37 per cent this year to US$56 billion and increase “significantly” in 2028 and 2029 due to AI demand.

TSMC would be one of the biggest beneficiaries of the AI boom, regardless of whether graphics processing units from the likes of Nvidia and AMD, or custom AI processors such as Google’s tensor processing units saw greater demand in the future, Morgan Stanley said in a research note on Thursday. The Taiwan foundry would see a 60 per cent compound annual growth rate for AI chip revenue from 2024 to 2029, Morgan Stanley estimated.

However, Huang also emphasised the growing importance of memory chips for sustaining the AI infrastructure buildout during his Taiwan trip, which was expected to end on Monday.

High-bandwidth memory is critical for AI workloads as it enables cutting-edge chips to store and process data at high speeds. However, the world was facing a significant shortage of memory chips due to exploding demand, with the shortfall expected to persist well into 2027, analysts said.

Since arriving from mainland China on Thursday, Huang has been flanked by fans and journalists at every stage of his trip to the island where he was born. Periodically stepping out of Saturday’s banquet to address reporters, Huang praised his Taiwanese partners and said Nvidia would not be possible without Taiwan.

He also confirmed that Nvidia would participate in leading AI start-up OpenAI’s latest funding round, calling it potentially “the largest investment we’ve ever made”, without specifying a figure.

Asked about recent accusations by a US lawmaker that Nvidia offered technical support for leading Chinese AI start-up DeepSeek to build its frontier models, Huang said that “every developer” globally uses Nvidia hardware and software, something he was “very proud of”.

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