A growing bottleneck in the AI chip supply chain is emerging not in fabrication, but in advanced packaging—where smaller chips are integrated into larger, more powerful units. Despite being designed and manufactured in the U.S., many cutting-edge AI chips are now shipped to Taiwan for this critical step. This shift places heavy reliance on TSMC, which dominates advanced packaging capacity. As demand surges, Nvidia’s dominance in securing production slots intensifies the strain, prompting TSMC to begin construction on its first U.S.-based packaging facilities.
Meanwhile, other major players are adapting. Elon Musk has partnered with Intel to develop custom chips in Texas, leveraging Intel’s expanding packaging capabilities. CNBC secured an exclusive look at an Intel packaging plant in Arizona, highlighting the company’s efforts to bring key stages of chip production closer to home. These developments signal a strategic pivot toward regionalizing high-end semiconductor processes, though full self-sufficiency remains distant due to technical complexity and existing infrastructure limitations in the U.S.