Jensen Huang admits that Nvidia can only meet about 70% of current demand, and the Taiwanese government just backed a multibillion-dollar bet that moving suppliers to Texas would change that equation for Nvidia and TSMC.
Supply constitutes the strictest constraint on Nvidia (NASDAQ:NVDA | NVDA Price Prediction). During the August 26, 2026 earnings call, CEO Jensen Huang said, “our entire supply chain is in question” and Taiwan now wants to move part of that chain to Texas.
In remarks reported on October 16, 2026, Taiwan’s Minister of Economy, Kung Ming-hsin, spoke. He said the government supports a plan for US industrial parks, starting in Texas, with the first complex costing up to $4 billion. The parks target small suppliers who serve Semiconductor manufacturing in Taiwan (NYSE:TSM) and AI server assemblers such as Foxconn, putting them in close proximity to Nvidia and other data center hardware makers.
Both names fell on October 15, 2026, during a broader technology sell-off due to AI funding concerns. Nvidia closed at $217.23, down 1.84%, and TSMC’s U.S. shares closed at $422.25, down 1.80%.
If you own either of these stocks, the question becomes whether a supplier fleet is important for companies of this size. This matters more for TSMC’s US ecosystem than Nvidia’s profits.
What Taiwan did
The plan is a statement of intent, backed by government support. The Taiwan Electrical and Electronics Manufacturers Association, an industry group, is expected to raise funds, and the government will offer loan guarantees, visas and access to land.
Kung Ming-hsin estimates the cost of each site at $2 billion to $4 billion, and the government wants to have more than one site in the United States, but has not set a figure. Nvidia, TSMC, and Foxconn have not made any commitments to the parks, and no participating vendors, schedules, or customer contracts have been named.
What Nvidia gains from local suppliers
AI servers rely on small manufacturers of power supplies, cooling systems, circuit boards, connectors and chassis. Placing them near U.S. assembly reduces shipping times and tariff exposure, which also helps Nvidia’s position in Washington (we’ve profiled seven of these chipless AI infrastructure providers, from power to cooling, in a free report you can grab here).
One site is small, with $96.22 billion in quarterly revenue and $279 billion in supply commitments. U.S. production generally costs more, although the expected gross margin of around 74% suggests Nvidia has the ability to pass those costs on to its customers.
Taiwan also addressed AI hardware policy. Shipping restricted AI materials to mainland China will become “a criminal offense under the Foreign Trade Law.” This reduces the risk of a leak, and Nvidia’s guidelines already exclude data center compute revenue from China.
Why TSMC is closer to the buildout
TSMC’s planned U.S. investment reached $265 billion after adding $100 billion for Arizona in July. Texas’ supplier base is small by comparison, but it places parts makers between Arizona manufacturing plants and server assemblers.
TSMC is also looking into Texas. Outlining capacity options outside of Arizona on its Oct. 15, 2026, call, management said, “And Texas is one,” and added that teams are evaluating options, with no investments announced.
Authorization, U.S. labor costs and whether enough suppliers sign up remain up in the air. Large Taiwanese companies are already striking out on their own. Quanta Computer won approval to spend $973 million on server assembly in Tennessee, and Wistron got approval for $146 million to upgrade a factory in Texas.
Taiwan’s semiconductor exports reached a record $87.22 billion in September, up 60.9 percent from a year earlier. The demand therefore now exists. The parks assume it will hold up long enough to cover the higher costs in the United States.
How Texas Supplier Fleets Could Shape Nvidia and TSMC’s Outlook
Supply remains the main limit to Nvidia’s growth. Huang said the company has a supply that covers about 70% of demand, so the additional U.S. capacity only helps marginally.
TSMC is more directly exposed to the topic of reshoring because it manages the factories that a Texas cluster would serve. Its market value of $1.95 trillion, compared to Nvidia’s $5.25 trillion, also gives local vendors more weight in its story.
The verification signal is an announcement naming the first providers at a Texas park, along with a confirmed site and schedule. Meanwhile, Kung Ming-hsin’s $4 billion figure is only an upper estimate for a single site.
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