Taiwan plans to raise billions of dollars to build U.S. industrial parks for suppliers to Nvidia $NVDA and other AI hardware makers, starting with a Texas complex that could cost as much as $4 billion, Minister of Economic Affairs Kung Ming-hsin told Bloomberg.
Each complex would carry a price tag of $2 billion to $4 billion, while officials are planning "more than one" site in the U.S., Kung said during an interview on Oct. 12. The Taiwan Electrical and Electronic Manufacturers' Association has teamed up with the government and will handle the fundraising, he said.
The parks are meant to help smaller suppliers to Taiwan Semiconductor Manufacturing Co. and AI server assemblers such as Foxconn Technology Group set up operations in the U.S., Kung said. TSMC $TSM is Nvidia's main production partner. Bloomberg reports that TSMC and Foxconn can finance and run their own expansion into the U.S., while many smaller firms cannot, including makers of cooling modules and chip packaging substrates.
"We are going to establish a long-term, sustainable supply chain there that can also be joined by American firms and local workers, and not just Taiwanese companies," Kung said.
Taiwanese officials will stand behind suppliers located in the parks through loan guarantees, Kung said. They will also liaise between companies and officials at the local and federal levels in the U.S. on matters such as visas and land, he said. Under its trade agreement with Washington, Taiwan committed this year to help stand behind $250 billion of credit guarantees aimed at investment in America's chip supply chain.
Taiwan has locked down a parcel in Texas for a park, according to Bloomberg, which cited an unnamed source. The Ministry of Economic Affairs said it will share further details of the proposal when the timing is right, according to Bloomberg.
Kung said the U.S. buildout has become pressing because Taiwan must make good on the investment pledges it made in its trade agreement with the Trump administration. The self-governing island also wants to lower the geopolitical exposure of its biggest tech manufacturers to tensions with China, according to Bloomberg.
Separately, TSMC is weighing a new Texas campus where each fabrication plant would cost at least $20 billion. The company said Thursday that it is looking at Texas for another U.S. location, according to Bloomberg. Asked whether TSMC has chosen Texas, Kung said the chipmaker has "many locations" under consideration and did not go into detail. TSMC declined to comment, according to Bloomberg.
Foxconn and Wistron Corp. have expanded their presence in Texas, according to Bloomberg.
Kung said Tesla $TSLA CEO Elon Musk, who has declared he will challenge TSMC in chipmaking, would be free to tap the new supply chain, but Taiwan would not hand over its technology wholesale.
The U.S. government has not commented on the plan, according to Tom's Hardware.