By Iyore Akenzua
IT News Correspondent
Nvidia’s ambitious expansion in Taiwan is sharpening focus on the chipmaker’s growing dependence on the island’s semiconductor dominance as demand for artificial intelligence hardware accelerates worldwide.
The Taiwanese government has approved plans for Nvidia to establish a new headquarters valued at NT$3.3 billion (US$105 million), reinforcing the company’s presence at the heart of the global semiconductor supply chain. The facility, to be located in Taipei, will serve as a commercial office complex alongside land acquisition for a comprehensive business park, according to Taiwan’s Ministry of Economic Affairs.
The approval came just ahead of reports that Nvidia founder and chief executive Jensen Huang was set to arrive in Taiwan for a series of engagements, potentially including talks with C.C. Wei, chairman and CEO of Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker.
While neither Nvidia nor TSMC confirmed a meeting, analysts say close coordination between the two companies is increasingly unavoidable. Nvidia, now reportedly TSMC’s largest customer—having overtaken Apple—faces mounting pressure to secure production capacity for AI chips that power data centres, cloud platforms, and next-generation computing systems.
“Production capacity is reserved years in advance,” said Stefan Angrick, associate director and senior economist at Moody’s Analytics. “Taiwan remains the world’s most critical producer of advanced semiconductors, and with AI rapidly spreading across industries, Nvidia’s strategy makes clear sense.”
Founded in 1987, TSMC leads the world in manufacturing advanced chips at five nanometres and below, enabling faster processing with reduced energy consumption. According to Counterpoint Research, the company produced roughly 70 per cent of the world’s chips last year.
Demand has become so intense that TSMC has earmarked between US$52 billion and US$56 billion in capital expenditure for 2026 alone. Taiwanese authorities recently signalled economic overheating by flashing a “red light” across key economic indicators—an uncommon warning tied to surging industrial activity.
TSMC confirmed that increasing technological complexity now requires closer collaboration with customers, often beginning two to three years before production. Meanwhile, Swiss private bank Union Bancaire Privée estimates that global spending on AI infrastructure will grow by more than 34 per cent this year, sustaining strong demand for semiconductors and manufacturing equipment.
Huang first outlined Nvidia’s Taiwan expansion in May during a keynote speech at the Computex Taipei technology exhibition. He cited deep partnerships with Taiwanese technology firms and acknowledged that Nvidia’s engineering workforce on the island had outgrown its existing facilities.
“As chip design becomes more complex, Nvidia requires a large, on-the-ground research and development team working closely with TSMC on a daily basis,” said David Wu, a research analyst at Counterpoint. “This collaboration is essential for addressing yield challenges and accelerating the launch of next-generation silicon.”
Local media reported that the government’s approval followed the cancellation of a prior land agreement with an insurance firm and the consolidation of two adjacent plots to accommodate Nvidia’s plans.
Huang’s Taiwan visit follows a week-long stay in mainland China, where Nvidia is awaiting regulatory clearance for its H200 processor, the company’s second-most powerful AI chip.
Looking ahead, Huang has reportedly stated that TSMC will need to significantly expand capacity over the next decade to keep pace with global AI demand.
Analysts say Nvidia’s expanded Taiwan hub will also strengthen its ability to manage a complex AI server supply chain that spans mainland China and Southeast Asia, positioning the company to remain at the forefront of the AI revolution.
