Nvidia CEO Praises TSMC as Smart Investment Amidst US Interest in Acquiring Stake

Nvidia CEO Jensen Huang commended Taiwan Semiconductor Manufacturing Company (TSMC) during a recent visit to Taiwan, stating that investing in TSMC stock would be “very smart.” The praise comes amidst signs of U.S. government interest in acquiring stakes in tech companies, particularly those receiving funding under the CHIPS Act.

Huang’s trip to Taiwan was primarily aimed at expressing gratitude for TSMC’s work on Nvidia’s Rubin, a next-generation AI chip platform. During a question about potential U.S. investment in TSMC, Huang remarked, “Anyone who wants to invest in TSMC is a smart individual.”

TSMC is currently developing six new products for Nvidia, including a new central processing unit (CPU) and a general processing unit (GPU), primarily used for advanced computation, particularly AI.

Earlier this week, reports suggested that U.S. Commerce Secretary Howard Lutnick was exploring equity stakes in return for CHIPS Act funding for companies such as Micron, TSMC, and Samsung.

The 2022 CHIPS Act, supported by both political parties under the Biden administration, has provided grants and loans to chipmakers increasing production within the U.S., as part of efforts by Washington to bolster U.S. dominance in semiconductor manufacturing. TSMC was promised $6.6 billion under this act to aid in building its three advanced chip fabrication plants in Arizona.

Lutnick confirmed in a CNBC interview that the government was considering a 10% equity stake in troubled semiconductor company Intel, and suggested that the administration might also consider stakes in other firms. However, a report from the Wall Street Journal on Thursday stated that the government had no plans to acquire shares in semiconductor companies increasing their U.S. investments, citing a government official. TSMC announced an expansion of its U.S. investment to $165 billion in March.

Separately, Huang revealed Nvidia’s eagerness to initiate work on “NVIDIA Constellation” – a new Taiwan office designed to accommodate the company’s growing Taiwan workforce. Huang stated that the company is collaborating with local authorities to address some issues before construction can commence.

“We have a substantial number of employees in Taiwan, and our operations here are expanding due to the busy nature of our supply chain,” Huang explained, adding, “We’re working closely with chip companies, system vendors, and system makers across Taiwan, and we require a significant number of engineers to support their efforts.”

Shares in TSMC, the world’s largest contract chip manufacturer, have increased by 6.5% this year.

Separately, reports on Friday suggested that Nvidia had requested some component suppliers to halt production related to its H20 GPUs designed for the Chinese market, following security concerns raised by China over these chips. Last month, Nvidia projected it would receive an export license for its H20 chips, which were effectively banned in April. However, Beijing has reportedly imposed a moratorium on local companies’ ability to purchase them.

According to Reuters, one of the companies asked to cease work related to the H20 GPUs was Taiwan’s Foxconn (Hon Hai Precision Industry). Foxconn did not respond to an inquiry from CNBC regarding this matter.

On Friday, Huang confirmed that Nvidia had addressed China’s concerns regarding its H20 chips and expressed hope for a resolution.