AT A GLANCE
- US Chip Independence: Nvidia CEO, Jensen Huang, says the US is 10 to 20 years away from being independent in making computer chips without relying on other countries.
- Global Supply Chain Complexity: Huang explains that Nvidia’s products use parts from various places worldwide, not just Taiwan. Achieving independence is challenging due to the complex supply chain.
- Biden Administration’s Goal: Despite efforts by the Biden administration to bring chip-making back to the US, Huang suggests it’s not a practical goal for at least a decade or two.
- Industry Expansion in the US: Major companies like Taiwan Semiconductor Manufacturing Co, Samsung Electronics, and Intel plan to expand their manufacturing operations in the US, aligning with the administration’s objective.
- Global Shift in Manufacturing: Both the US and Europe are trying to bring more chip manufacturing within their borders, signaling a shift away from decades of globalized production that led to vulnerabilities in key areas.
- Nvidia’s Commitment to China: Despite export restrictions impacting Nvidia’s sales in China, Huang reaffirms the company’s commitment to the Chinese market and mentions ongoing efforts to develop products that comply with restrictions imposed by the US government.
Dependence on Overseas Chipmaking to Last for Decades
Jensen Huang, CEO of Nvidia and leader of the semiconductor industry’s most valuable company, casts doubt on the US’s near-term goal of achieving chipmaking independence. Speaking at The New York Times’ DealBook conference, he estimated it will take between one and two decades for the country to break free from its reliance on foreign chip production.
“We are somewhere between a decade and two decades away from supply chain independence,” he said. “It’s not a really practical thing for a decade or two.”
Global Supply Chain Remains Entangled:
Huang emphasized that Nvidia products depend on a complex network of components sourced from various parts of the world, not just Taiwan, the current hub for advanced chip fabrication. He stated, “We are somewhere between a decade and two decades away from supply chain independence. It’s not a really practical thing for a decade or two.”
Biden’s Vision of Domestic Chip Manufacturing Faces Challenges:
This assessment presents a significant hurdle for the Biden administration’s ambitious plan to attract chip manufacturing back to US soil. Although the president has championed bipartisan legislation and major corporations like TSMC, Samsung, and Intel have announced US expansion plans, the road to self-sufficiency appears long and winding.
Europe Joins the Race for Domestic Chip Production:
Europe, too, is embarking on a similar mission to bolster its chipmaking capacity. This push coincides with a broader trend of deglobalization, aiming to reduce reliance on geographically concentrated production centers and mitigate the vulnerability exposed by recent supply chain disruptions in places like Taiwan and South Korea.
Nvidia Navigates the China Market Amidst Tightening US Regulations:
Huang also addressed Nvidia’s ongoing struggle with navigating the Chinese market, the largest consumer of chips globally. The company’s top AI processors are currently banned for export to China due to US national security concerns, with restrictions further tightening last month.
“We have to come up with new chips that comply with the regulation, and once we comply with the regulation, we’ll go back to China,” he said. “We try to do business with everybody we can. On the other hand, our national security matters. Our national competitiveness matters.”
Responding to these challenges, Huang revealed that Nvidia is actively developing products for China that comply with US regulations, aiming to regain a foothold in this crucial market.
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Source(s): SCMP
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