Nvidia CEO feels safe relying on Taiwan for chips

[Daniel Nenni]

[1/2] A Nvidia logo is seen on one of their products on display at their headquarters in Taipei, Taiwan May 31, 2023. REUTERS/Ann Wang

TAIPEI, June 1 (Reuters) - Nvidia Corp, a major supplier of chips and computing systems for artificial intelligence (AI), feels "perfectly safe" about relying so much on chip powerhouse Taiwan for manufacturing, its chief executive Jensen Huang said on Thursday.

Some companies have expressed concerns about potential risks to business given heightened military threats by China against the democratic island of Taiwan, which Beijing claims as its own, to Taipei's strong objections.

Chip manufacturer Taiwan Semiconductor Manufacturing Co Ltd (TSMC) (2330.TW), makes chips designed by Nvidia and Huang said his company's next generation of products would also be made by TSMC, while adding Nvidia (NVDA.O) would continue to diversify.

"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 given the China tensions.

Nvidia was diversified through multiple fabs at TSMC and Huang confirmed it also planned to source from the TSMC fab in Arizona, "so we have a lot of diversity and resilience designed into our supply chain."

Nvidia CEO feels safe relying on Taiwan for chips

Nvidia Corp, a major supplier of chips and computing systems for artificial intelligence (AI), feels "perfectly safe" about relying so much on chip powerhouse Taiwan for manufacturing, its chief executive Jensen Huang said on Thursday.

www.reuters.com

 

[Daniel Nenni]

Jensen sure is working his foundry relationships! Funny that Samsung is not included in this press tour. The Samsung Foundry Symposium is later this month so that may change. https://semiconductor.samsung.com/event/foundry-events-2023/

 

[ta152h]

[1/2] A Nvidia logo is seen on one of their products on display at their headquarters in Taipei, Taiwan May 31, 2023. REUTERS/Ann Wang

TAIPEI, June 1 (Reuters) - Nvidia Corp, a major supplier of chips and computing systems for artificial intelligence (AI), feels "perfectly safe" about relying so much on chip powerhouse Taiwan for manufacturing, its chief executive Jensen Huang said on Thursday.

Some companies have expressed concerns about potential risks to business given heightened military threats by China against the democratic island of Taiwan, which Beijing claims as its own, to Taipei's strong objections.

Chip manufacturer Taiwan Semiconductor Manufacturing Co Ltd (TSMC) (2330.TW), makes chips designed by Nvidia and Huang said his company's next generation of products would also be made by TSMC, while adding Nvidia (NVDA.O) would continue to diversify.

"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 given the China tensions.

Nvidia was diversified through multiple fabs at TSMC and Huang confirmed it also planned to source from the TSMC fab in Arizona, "so we have a lot of diversity and resilience designed into our supply chain."

Nvidia CEO feels safe relying on Taiwan for chips

Nvidia Corp, a major supplier of chips and computing systems for artificial intelligence (AI), feels "perfectly safe" about relying so much on chip powerhouse Taiwan for manufacturing, its chief executive Jensen Huang said on Thursday.

www.reuters.com

What else would he say? After making it pretty clear he's interested in dating Intel, he's not likely to say that he's afraid to depend too much on TSMC, when they are making almost all his chips now.

Of course he's got to have at least a minor concern, and based on his actions, more than that. He recently used Samsung, has been talking about Intel since they started pushing IFS, and now is saying their process looks good. His actions are pretty clear. Is it because of the geopolitical situation? Hard to say, but clearly he's looking for more than one dance partner.

TSMC got a bit arrogant by saying they will remain a node behind in Arizona. That's not going to fly if Intel gets their act together, and so far it looks like they will. Obviously there will be plenty of scenarios where companies will still find this useful, but for leading edge, the days where TSMC's penultimate node is as good or better than Intel's best, is probably going to end, at least to a large extent. Or maybe it won't, but it's dangerous to make a policy with this expectation/hope, especially given the updates from Intel have been pretty consistently favorable.

 

[lilo777]

I don't think Huang's statements are misleading or controversial. From a company perspective they probably care most (if not exclusively) about the price and performance now and that's what they get from TSMC. Even if something were to happen to Taiwan, it would not be that difficult for Nvidia to switch the foundry. Not using the best foundry now on the other hand could be catastrophic. As far as government perspective is concerned (US in particular) that's a totally different story.

I would imagine that Nvidia should still be monitoring and engaging with other foundries to see if someone is about to offer a better price or performance. Hence their (limited) engagement with Intel.

 

[Daniel Nenni]

I don't think Huang's statements are misleading or controversial. From a company perspective they probably care most (if not exclusively) about the price and performance now and that's what they get from TSMC. Even if something were to happen to Taiwan, it would not be that difficult for Nvidia to switch the foundry. Not using the best foundry now on the other hand could be catastrophic. As far as government perspective is concerned (US in particular) that's a totally different story.

I would imagine that Nvidia should still be monitoring and engaging with other foundries to see if someone is about to offer a better price or performance. Hence their (limited) engagement with Intel.

I think the "behind a node strategy" in AZ was to appease the powers to be in Taiwan. Clearly that has changed since customers seem to want to build chips in the USA. Last I spoke to TSMC, AZ would manufacture N4 and N3. The processes are very close and use the same equipment so that may be all N3. As I have mentioned before, N3 will be a long node so the timing of N3 and AZ is right on target for most customers with the exception of Apple who has a specialized SoC centric node and is already working on N2. Apple is a bleeding edge TSMC customer, absolutely.

I asked friends from Nvidia if they would be back at Samsung and they said hopefully not but that really is a PDK and pricing issue. Samsung can give away logic wafers without notice inside the memory business. Logic really is the tail of the Samsung semiconductor dog.