Taiwan Semiconductor Manufacturing Co. may produce Nvidia‘s Blackwell artificial intelligence chips in Arizona, according to a Reuters report.

TSMC is in discussions with Nvidia to potentially begin Blackwell chip production at its north Phoenix fab early next year, Reuters reported, citing three people familiar with the matter.

Nvidia’s Blackwell supercomputing chips — which the California-based company unveiled in March — are intended to handle the complex demands of autonomous systems, AI applications and data centers, according to the company.

Japan-based SoftBank Corp. is building a powerful AI supercomputer with the Nvidia’s Blackwell platform, while Taiwanese electronics contract manufacturer Foxconn plans to build Taiwan’s fastest supercomputer with Nvidia’s Blackwell to transform research, health care, robotics and smart city innovations, according to the company.

The agreement with TSMC would mark a “significant shift” for Nvidia’s production strategy as TSMC has been producing the technology company’s Blackwell chips exclusively in Taiwan, according to Reuters.

While TSMC plans to produce the front-end process of Nvidia’s Blackwell chips in Arizona, the company will ship the chips to Taiwan for packaging as its north Phoenix fab lacks capability for chip-wafer-on-substrate packaging, Reuters reported.

Should TSMC and Nvidia finalize the deal, it would add to a growing number of manufacturers conducting business with the chipmaking giant.

TSMC’s Arizona fab began engineering wafer production in April with N4 process technology. In October, the fab reached a trial production rate that’s on par with TSMC’s Fab 18 in Tainan, Taiwan, the Business Journal previously reported.

TSMC will begin mass production at its Arizona fab site at the beginning of 2025 and operations are expected to begin at TSMC’s second factory in 2028. The company’s second fab will produce 2 and 3 nanometer process technologies for AMD, Apple, Nvidia and Qualcomm.

Just last month, the White House awarded TSMC with a $6.6 billion CHIPS Act grant with plans to disburse $1 billion to the chipmaker by the end of the year to support its Arizona fab.

The award to TSMC Arizona is based on the company’s completion of project milestones for its $65 billion fab site in north Phoenix.

In addition to the federal grant, TSMC is also expected to take advantage of a $5 billion loan and tax credit for a portion of its capital expenditures, the Business Journal previously reported.