CEO Jensen Huang reveals that Nvidia is now making chips in the USA but will that help with gaming GPU supplies?

CEO Jensen Huang reveals that Nvidia is now making chips in the USA but will that help with gaming GPU supplies?

  • 21.03.2025 12:45
  • pcgamer.com
  • Keywords: Nvidia, TSMC

Nvidia CEO Jensen Huang announced that the company is now producing chips in Arizona using TSMC's N4 node. While this could help alleviate GPU supply constraints for gaming graphics cards, it doesn't utilize the more advanced N3 node, potentially limiting performance improvements. The move aims to increase production capacity but may not immediately solve shortages.

Nvidia ProductsNVDAsentiment_satisfied

Estimated market influence

Nvidia

Nvidia

Positivesentiment_satisfied
Analyst rating: Strong buy

Nvidia is making chips in the USA, which could improve gaming GPU availability.

TSMC

Neutralsentiment_neutral
Analyst rating: N/A

TSMC is providing production capacity for Nvidia's chips in Arizona.

Context

Analysis and Summary: Nvidia's Chip Production in the USA

Key Facts and Data Points:

  • Production Location: Nvidia is now producing chips in the USA at TSMC's Arizona fab.
  • Technology Node: The production uses TSMC's N4 node, not the more advanced N3 node.
  • Strategic Reasoning:
    • Diversifying production to ensure supply chain resilience.
    • Potential to allocate other fabs (e.g., Taiwan) for gaming GPU production.
  • Performance Impact:
    • RTX 50 series GPUs are on N4, limiting complexity and generational performance improvements compared to expectations.
  • Market Implications:
    • May improve availability of reasonably priced gaming GPUs in the short term.
    • Could signal a shift in Nvidia's strategy to balance production capacity with performance.

Market Trends and Business Impact:

  • Supply Chain Resilience: By producing chips in the USA, Nvidia is reducing reliance on TSMC's Taiwan fabs, which have faced geopolitical and logistical challenges.
  • Production Capacity: The move suggests Nvidia is prioritizing stable manufacturing over cutting-edge technology for certain products.
  • Gaming GPU Availability: While not directly increasing gaming GPU production, the freed-up capacity in other fabs could indirectly improve availability.

Competitive Dynamics:

  • AMD's Position: AMD continues to use TSMC's N3 node exclusively, potentially maintaining a technological edge in GPU performance.
  • Strategic Shift: Nvidia's decision may indicate a long-term strategic shift toward balancing manufacturing locations and technology nodes for different product lines.

Strategic Considerations:

  • Geopolitical Risks: By producing in the USA, Nvidia is mitigating risks associated with Taiwan's geopolitical instability.
  • Cost-Benefit Analysis: The trade-off between using an older node (N4) for production in the USA versus the more advanced N3 node in Taiwan.

Long-Term Effects and Regulatory Impacts:

  • Regulatory Environment: Potential implications under U.S. semiconductor policies, such as incentives for domestic manufacturing.
  • Industry Precedent: Sets a precedent for other semiconductor companies to diversify production locations, particularly in the USA.

This analysis highlights the strategic significance of Nvidia's decision to produce chips in the USA, its potential impact on gaming GPU supplies, and the broader implications for the semiconductor industry.