- Chip giant to invest hundreds of billions in US supply chain
- Direct response to Trump administration’s ‘America First’ policy
- Nvidia market cap has lost more than $650 billion this year
Chip firm Nvidia (NVDA:NASDAQ) plans to invest hundreds of billions of dollars in US-based semiconductor and electronics production over the next four years as it seeks to accommodate the Trump administration’s ‘America First’ manufacturing policy.
Thanks to big infrastructure investment in the US by suppliers like TSMC (TSM:NYSE) and Foxconn Technology, and commitments from the likes of Apple (AAPL:NASDAQ) to onshore manufacturing in the US, Nvidia chief executive Jensen Huang believes a ramp in US chip manufacturing is incoming.
Nvidia will spend up to ‘half a trillion dollars’ on electronics over the next four years, Huang told the FT, adding that the chipmaker is now able to manufacture its latest Blackwell systems in the US through suppliers such as TSMC and Foxconn.
SAFEGUARDING THE FUTURE
Huang believes the massive investment is necessary to safeguard Nvidia’s supply chain, which has been vulnerable to geopolitical risks, especially those tied to Taiwan’s semiconductor industry. The move also aligns with broader US ambitions to bring more high-tech manufacturing back to American soil.
At the heart of Nvidia’s vision is the creation of a robust semiconductor manufacturing ecosystem within the US. Huang’s plan includes establishing new production lines and expanding existing partnerships with industry heavyweights like TSMC and Foxconn.
‘Having the support of an administration who cares about the success of this industry and not allowing energy to be an obstacle is a phenomenal result for AI in the US,’ Huang said.
The new strategy marks a significant departure from Nvidia’s earlier reliance on overseas facilities, particularly those in Taiwan, to manufacture critical components.
The scale of Nvidia’s investment illustrates the chip designer’s vision of putting the US at the heart of production of advanced computing hardware, particularly the type used in AI and data centres where it holds a dominant position in the market.
Concerns over Taiwan’s security have risen, especially as China increases its assertiveness in the region. Home to TSMC, the island has long been the backbone of the global semiconductor industry yet its strategic importance has made it a potential flashpoint for international conflict.
POLITICAL PRESSURES
Another critical factor influencing Nvidia’s decision is the role of US trade policies and economic unpredictability, particularly under the Trump administration.
The shift toward a more protectionist stance, encapsulated in the ‘America First’ agenda, has led many tech companies to reconsider their global supply chains.
Nvidia shares have lost more than 20% this year as investors consider the economic impact Trump tariffs might have on economic growth, wiping more than $650 billion off the firm’s market cap.
In recent days, investment bank Goldman Sachs raised its recession probability this year from 20% to 35% as global trade battles escalate. An expected slowdown in the US economy also prompted Goldman Sachs to raise its year-end 2025 unemployment rate forecast to 4.5%.
‘The upgrade from our previous 20% estimate reflects our lower growth baseline, the sharp recent deterioration in household and business confidence, and statements from White House officials indicating greater willingness to tolerate near-term economic weakness in pursuit of their policies,’ wrote the firm.
