Taiwan plans to spend billions on U.S. industrial parks to support Nvidia's (NVDA) AI supply chain. These parks would make it easier for smaller Taiwanese firms to set up U.S. operations and support key Nvidia suppliers, including Taiwan Semiconductor Manufacturing Co. (TSMC) (TSM) and Foxconn.

According to Taiwan's Economic Affairs Minister Kung Ming-hsin, the first project is planned for Texas and could cost between $2 billion and $4 billion.

Taiwan to Support US Supply Chain

Taiwan, in partnership with the Taiwan Electrical and Electronic Manufacturers' Association, will fund the new industrial parks. The government will also offer loan guarantees and assist suppliers in dealing with U.S. regulations and permits. The plan comes as Taiwan is under pressure to fulfill its investment commitments under a trade deal with the U.S.

TSMC is a contract chipmaker that makes chips based on designs from major global tech companies. Meanwhile, Foxconn assembles products and builds AI servers for major global tech companies. Their products support U.S. chipmakers such as Nvidia and Advanced Micro Devices (AMD), as well as cloud firms like Meta Platforms (META) and Microsoft (MSFT).

TSMC and Foxconn can afford to fund and manage their own US expansions, but smaller suppliers may not be able to do the same. Taiwan hopes the new industrial parks will help such firms establish a foothold in the U.S. Nvidia CEO Jensen Huang also pointed out these smaller companies in a speech in Taipei earlier this year. He named dozens of parts makers, highlighting their key role in the global AI supply chain.