What does Nvidia need to produce to fulfill its $500 billion promise?
This week, Nvidia and its partners Amkor, Foxconn, SPIL, TSMC, and Wistron announced plans to build $500 billion worth of AI hardware in the U.S. over the next four years. The announcement included the production of actual AI processors, their testing and packaging, as well as assembling actual AI servers. But, while the announcement represents a plan to build half a trillion dollars’ worth of AI hardware, it lacks detail, which casts doubt on whether it can be done. So, we decided to take a closer look.
Building a local AI supply chain in the U.S.
TSMC has already committed to invest $165 billion in its Fab 21 manufacturing site over an unknown amount of time, so it is safe to say that there is (and will be) advanced manufacturing capacity to build chips for Nvidia.
The 4nm-capable Fab 21 phase 1 is already ramping production, 3nm-capable Fab 21 phase 2 is expected to commence mass production in 2028 (1-2 years after Nvidia plans to ramp production of its 3nm-based Rubin GPUs in Taiwan), and 2nm/1.6nm-capable Fab 21 phase 3 is projected to start high volume manufacturing of chips by the end of the decade.
When it comes to packaging, TSMC has committed to building two advanced testing and packaging facilities in the U.S.
Amkor is building an advanced $2 billion packaging facility that will feature 500,000 square feet (46,451 square meters) of cleanroom space when fully built and equipped. This week, SPIL also announced that it will build a packaging facility in the U.S., and based on Nvidia’s press release, it will also feature 500,000 square feet (46,451 square meters) of cleanroom space. The company did not disclose planned investments, but it will likely be in the same ballpark as Amkor’s plant.
To put the investments of Amkor and SPIL into context: TSMC’s current advanced packaging facilities cost less than $2 billion, and given high demand, they cannot meet the demand from all customers who use CoWoS and other packaging methods.
However, two $2 billion OSAT plants will likely be enough for Apple’s, AMD’s, and Nvidia’s products made in the USA. However, you should remember that Amkor’s plant is scheduled to begin operations in 2027, and it is unclear when SPIL’s factory will be ready.
https://www.tomshardware.com/tech-industry/artificial-intelligence/made-in-the-usa-inside-nvidias-usd500-billion-server-gambit
