U.S. AI chips sent to Taiwan for packaging as Nvidia dominates capacity, TSMC and Intel race to build domestic plants

TSMC and Intel are building advanced chip packaging plants in the United States after discovering a critical bottleneck: nearly all AI chip packaging—the process that connects smaller chips into GPUs for data centers—happens in Asia. Nvidia has booked the majority of existing packaging capacity globally, forcing U.S.-made chips to be shipped to Taiwan for assembly before returning to American data centers. TSMC is preparing to break ground on its first U.S. packaging facility while Intel is working with Elon Musk on custom chip plans in Texas. This dependency on Asian manufacturing for a crucial step in AI chip production creates supply chain vulnerability and delays for companies building U.S. AI infrastructure.