Nvidia announced a significant expansion in Taiwan, with CEO Jensen Huang revealing plans to spend $150 billion annually in the country, a tenfold increase from the $10 billion to $15 billion spent just four or five years ago [1]. The company will also begin construction of a new office complex, Constellation, in northern Taipei by the end of the year, which will accommodate 4,000 employees when it opens in 2030—four times Nvidia's current headcount in Taiwan [1].
The announcement fueled a rally in Taiwan's semiconductor sector, with the Taiex stock index climbing 1.7% to a record close on Wednesday [1]. Shares of TSMC rose 1.3%, MediaTek surged 8.8%, and Delta Electronics gained 7.2%. These companies are the largest by market capitalization on the Taiex index [1]. Nvidia, which designs chips manufactured by TSMC, is expected to surpass Apple as TSMC's largest customer this year [1].
Nvidia's $150 billion annual outlay in Taiwan is among its largest spending plans to date and exceeds its single-quarter revenue, which was a record $81.6 billion for the quarter ended April 26. The company forecasts $91 billion in revenue for the current quarter [1]. In comparison, Nvidia has also announced plans to invest $500 billion in AI infrastructure in the U.S. over four years, averaging $125 billion annually in U.S. value creation [1].
The investment comes amid increasing regulatory hurdles for Nvidia in the mainland Chinese market. In the latest quarter, Nvidia's revenue from Taiwan surged by more than 50% year-over-year, while revenue from mainland China and Hong Kong halved [1]. Shares of leading Chinese chipmakers, including SMIC, Cambricon, and Hygon, fell sharply on Wednesday, with Cambricon down 5% and Hygon down 7% [1]. Earlier in the week, these stocks had rallied after Huawei announced a new semiconductor production approach, with plans to implement its "LogicFolding" engineering in smartphone chips this fall and in data center chips by around 2030 [1].
Jensen Huang emphasized Taiwan's central role in the AI revolution, stating, "Taiwan is the epicenter of the AI revolution," and highlighted the transformative potential of AI combined with hardware, or "physical AI," for manufacturing [1].
CONCLUSION
Nvidia's announcement of a $150 billion annual investment in Taiwan has significantly boosted confidence in the island's semiconductor sector, driving chip stocks and the Taiex index to record highs. The move underscores Taiwan's pivotal role in the global AI and semiconductor supply chain, even as regulatory challenges and technological competition intensify in China.