Nvidia Plans to Establish $500B Worth of Domestic Production Chain

Trump’s tariff was found with severe criticism from business leaders worldwide. However, these levy have begun to come through positive effects.

The world’s leading AI chip manufacturer NVidia has announced its plan to create an AI server of $ 500 billion in the US. So far, a large part of the operation of Nvidia is located in Southeast Asia. However, implementing tariffs will discredit it to maintain foreign production units for technical giants. Therefore, switch.

NVIDIA and TSMC, Foxconn, Wistron, Amkor and Spil will form a full AI server supply chain in the US. It consists of a plant in Texas to build AI servers and server assembly plants in Dallas and Houston.

It is worth noting that this will be the first time when NVidia will collect its AI product within the states. The line is expected to be operational in the next 12-15 months.

Another partner, TSMC, has already started production of blackwell processors in Phoenix. Spill and MCOR will install packaging and test operations in Arizona – something that is currently done in Taiwan.

Donald Trump said that this is a direct result of imposing tariffs. DA Davidson analyst Gill Luria also said that Nvidia would never have consider constructing in the US if not for Trump and his tariffs.

The Chips Act, which provides financial assistance to companies for domestic chip production, can also be a factor to play here. NVIDIA can be a large part of the grant by moving to the banks of its production.

What does this mean for America?

For the beginning, domestic manufacturing will not be cheaper as being done in Taiwan due to high labor costs in the US. However, the benefit overtakes the cost of this step.

It is no secret that AI Tech will be at the forefront of the technical industry in the next decade. Anyone who controls AI Tech controls global markets. Right now, this power is not with America, a giant will not be comfortable with something. Keeping in mind the universal tension between the US and China, China is the last country that wants to control the US AI production.

A major AI company, such as NVidia pulling out of the South East Asia production line, may have far -reaching effects. It puts America back in the lead. Imagine the production of $ 500B value on the domestic coasts. It creates more employment, saves shipping costs, and gives more control over production and packaging to Nvidia.

Even more importantly, it can also begin a domino effect, in which other companies are after suits. Apple has already made similar commitments in February for the establishment of domestic manufacturing. So, this $ 500B number may increase to some trillion in the next five years. This will definitely raise China, but it is fine what can happen after America.

To improve each phase of NVIDIA production chain, Omniverse and ISSAC will use their own in-house technology like GR00T. With more automation and robotization, the actual cost of the assembled systems is also expected to go down in a long time-a winning position for the company.

Border tension

Another interesting angle for complete development is China-Taiwan-US relation. Now, Taiwan considers itself an independent state, while China considers it a part of the ‘China forest’ region and wants it to come back to the mainland China, if it is not a force with the will.

However, the US does not officially consider Taiwan as independent. For the US, this means that cutting or disrupts relationships with manufacturing in Taiwan is good as an economic attack on China itself. China, also, may not be very affected by this decision and can retaliate in some way or the other.