Nvidia Feels ‘Perfectly Safe’ Relying Heavily on Taiwan Chips

 

US chip giant Nvidia, the world’s most valuable listed semiconductor company, feels “perfectly safe” about relying heavily on Taiwan for chip manufacturing, its chief Jensen Huang said on Thursday.

“When I was here, in all of our supply chain discussions, we feel perfectly safe,” Huang told reporters on the sidelines of a technology event in Taipei, when asked about the political risk of the world relying so much on Taiwan for chips.

Referring to Taiwan Semiconductor Manufacturing Co Ltd (TSMC), which makes chips designed by Nvidia, Huang said the chipmaker will also manufacture his company’s next generation of products.

 

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Huang’s comments come as Taiwan — a chip powerhouse — faces increasing military aggression from China, which considers the self-ruled island as its own territory.

Taiwan is home to a range chipmakers, including the world’s largest contract semiconductor manufacturer TSMC whose chips power 90% of “almost every category of electronic device around the world.”

Experts have warned that in the event China invades or blockades the island, and cuts off its chip supply, the world economy could lose as much as $1 trillion per year.

Those concerns have led several companies to express concerns about potential risks to their businesses in Taiwan. Global money managers, too, have been rethinking their Taiwan investments, most notably Warren Buffett, who recently sold off a $4.1 billion investment in TSMC within six months.

 

TSMC diversification strategy ‘excellent’

Huang said TSMC, whose founder Morris Chang he had dinner with while in Taiwan, was a world-class company with “immense capacity and incredible agility.”

“I have every confidence that the demand placed on us, which is extremely high, will be served and will be served soon,” Taiwan-born Huang said.

“The process of diversifying in different geographies is an excellent strategy by TSMC and so TSMC is now part of Nvidia’s diversity and redundancy strategy.”

Nvidia is diversified through multiple fabs at TSMC. Huang said the US chip firm also planned to source from TSMC’s Arizona fab, “so we have a lot of diversity and resilience designed into our supply chain.”

Nvidia chips have been at the heart of major tech trends from video games and self-driving cars to cloud computing and now artificial intelligence (AI).

The chip designer has quickly become one of the biggest winners of the AI boom, prompting investors to pile into Nvidia shares. The company joined an elite club of US companies with a $1 trillion market value on Tuesday.

Huang is hugely popular in Taiwan and has received a rock star welcome during his visit to Taipei. He was seen surrounded by adoring fans seeking selfies after a keynote address on Monday, which saw the attendance of thousands of people.

Huang said he planned to meet executives from TSMC and Apple supplier Foxconn, which makes iPhones and other electronics devices that use AI chips, on Friday.

He had not yet decided if he would visit China after his Taiwan trip, he added.

 

• Reuters, with inputs from Vishakha Saxena

 

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Taiwan ‘Should Destroy TSMC’ If China Invades: US Strategists

 

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