Nvidia's Huang Urges TSMC to Ramp Up Production Amid AI-Driven Chip Crunch

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TAIPEI—The relentless demand for artificial intelligence computing power is putting unprecedented pressure on the world’s semiconductor supply chain, a reality underscored this weekend as tech leaders gathered in the Taiwanese capital. Nvidia CEO Jensen Huang, speaking informally to reporters outside a Taipei restaurant following an exclusive industry dinner, delivered a pointed—if jovial—message to the island’s chipmaking titan, Taiwan Semiconductor Manufacturing Company (TSMC).

"TSMC needs to work very hard this year because I need a lot of wafers," Huang remarked with a laugh, acknowledging the foundry's efforts while underscoring the scale of demand. "They're doing an incredible job, but we have a lot of demand this year."

The so-called "trillion-dollar dinner"—a reference to the combined market capitalization of the attending firms—brought together executives from Nvidia, TSMC, and other key players in the AI hardware ecosystem. Among them was TSMC CEO C.C. Wei, who declined to comment to the press.

Huang’s public nudge reflects a broader industry tension: TSMC’s advanced packaging capacity, essential for producing high-performance AI chips like Nvidia’s H-series GPUs, is reportedly nearing its limits. With AI server deployments consuming vast quantities of high-bandwidth memory (HBM) and advanced logic chips, analysts warn that supply constraints could persist through 2026.

"The entire supply chain is challenging this year because demand is so much greater," Huang added, referencing the ongoing shortage of DRAM for consumer components—a side-effect of the AI boom that has driven up prices for PC gamers and general consumers.

In response to the crunch, TSMC has signaled plans to aggressively expand its footprint. Beyond its existing $165 billion investment in U.S. fabrication plants, the company is reportedly planning four new advanced packaging facilities in Taiwan. "Over the next decade, TSMC will likely increase their capacity by much more than 100%," Huang noted, suggesting a massive, long-term scaling of production capabilities.

The supply pinch comes as Nvidia continues to capitalize on the AI acceleration market. Recent reports indicate that several Chinese AI firms, including leading startup DeepSeek, have received conditional approval to import Nvidia’s H200 GPUs for training—potentially easing a persistent geopolitical friction point for the company.

Yet for the average consumer, relief appears distant. With AI hardware claiming production priority, costs for graphics cards and memory modules are expected to remain elevated. "While TSMC’s expansion may eventually benefit the broader market, Nvidia’s focus—and much of TSMC’s advanced capacity—is unequivocally tied to AI in the near term," said tech industry analyst Marcus Chen. "Gamers and PC builders should brace for a tight market well into next year."

Industry Reactions

David Park, semiconductor analyst at Horizon Insights: "Huang’s comments, though lighthearted, underscore a serious bottleneck. TSMC’s packaging technology is a linchpin for the entire AI pipeline. Their expansion can’t come soon enough."

Linda Shaw, VP of Procurement at data-center firm CloudDynamic: "We’ve been planning for 12–18 month lead times on HBM and advanced logic. This isn’t a short-term spike—it’s a structural shift in demand. Suppliers need to invest boldly, and quickly."

Raj Mehta, founder of gaming hardware retailer BoostedPCs: "It’s incredibly frustrating. Every time there’s a production surge, it’s for data centers, not gamers. We’re seeing graphics card prices creep up again, and inventory is thin. The ‘AI-first’ strategy is leaving mainstream consumers in the dust."

Sophie Reynolds, tech journalist at The Circuit: "The dinner itself symbolizes the concentration of power in just a few hands. When the CEOs of Nvidia and TSMC share a meal, they’re effectively shaping the roadmap for the entire digital economy. The rest of us are just waiting for scraps."