Nvidia to Invest Hundreds of Billions in US Supply Chain Amid Trade Pressures

Chip Giant Shifts Focus Away from Asia as US Tariff Fears Mount

Nvidia, the world’s most valuable semiconductor company, has announced plans to spend hundreds of billions of dollars on US-manufactured chips and electronics over the next four years. This massive investment marks a significant shift in its supply chain strategy, prompted by President Donald Trump’s trade policies and the growing desire among tech giants to reduce dependency on Asia.

In a recent interview, CEO Jensen Huang said Nvidia would procure around $500 billion in electronics, with “several hundred billion” likely to be sourced and manufactured within the United States.

Bringing Chip Production Back Home

Huang explained that thanks to partnerships with major suppliers like Taiwan Semiconductor Manufacturing Company (TSMC) and Foxconn, Nvidia can now manufacture its advanced systems in the US. TSMC recently announced a $100 billion investment in chipmaking facilities in Arizona, building on a $65 billion plan from the Biden administration.

“TSMC’s US investment significantly boosts our supply chain resilience,” said Huang.

Nvidia’s latest AI systems, including the new Blackwell chips, are already being made in the US, reducing the company’s reliance on TSMC’s Taiwanese facilities. Huang stressed the importance of this shift, given Taiwan’s geopolitical vulnerability, China’s claims over the island, and natural risks like earthquakes.

“We now have a diversified supply chain. If production in Taiwan is ever disrupted, it’ll be uncomfortable, but we’ll manage,” he said.

America First Trade Policies Driving Change

Nvidia is just the latest tech company reacting to Trump’s renewed push for "America First" trade policies, which have sent ripples through global supply chains. Companies such as Apple are also redirecting production and investment towards the US.

Huang believes the Trump administration’s stance could actually accelerate America’s AI industry by ensuring energy access and strong policy backing.

“Having a government that prioritises this industry and removes energy as a constraint is hugely beneficial,” he noted.

Facing Fierce Competition from China

While Nvidia continues to generate substantial revenue in China, it faces intensifying competition from Huawei. The Chinese tech giant has advanced significantly with its Ascend AI chips, despite being restricted from buying advanced chipmaking tools due to US export controls.

“Huawei is the most formidable technology company in China. They’ve succeeded in every market they’ve entered,” Huang said.

He added that US efforts to curb Huawei’s growth have been poorly executed and that the company is becoming an increasing force in AI development.

Intel’s Role and Future Prospects

Nvidia’s domestic production ambitions raise questions about Intel’s place in the supply chain. Though Intel has struggled in recent years, Huang expressed confidence in its future under new leadership.

“Intel has the potential to be competitive again, especially in chip manufacturing and packaging,” Huang said.

While denying reports that Nvidia was forming a consortium with TSMC to invest in Intel, Huang did not rule out becoming a customer in future.

“We evaluate their technology regularly and are open to working with them if the right opportunities arise.”

Conclusion: A Strategic Shift Towards US Resilience

Nvidia’s planned massive investment in the US marks a clear response to global supply chain risks and shifting trade dynamics. By building a more resilient, diversified, and locally rooted operation, the company aims to protect its position as a leader in AI and semiconductor technology.

As trade tensions rise and geopolitical uncertainty continues, this move signals a broader trend: tech giants are realigning their supply chains to reduce risk and prepare for a more protectionist global economy. Nvidia is leading the way.

Sources: (FT.com, ChatGPT)