Houston, we have a problem. A couple of days ago the CEO of Nvidia stood on the stage at Computex in Taipei and said an inconvenient truth for the United States: “Taiwan is the epicenter of the AI revolution. This is where chips and packaging are made. This is where systems are created. This is where AI supercomputers were created.”
The setting was Computex 2026, Asia’s biggest tech event, and it wasn’t a compliment to the host, it’s a real depiction of how the industry works. It may sound paradoxical for an American company and at a time when The United States wants to reindustrialize with chipsbut he needs it. It is a structural issue.
The harsh reality of profitability. Nvidia plans spend 150,000 million dollars a year in Taiwan, much more than the 100,000 million they spend now and with an abysmal difference compared to the 10,000 and 15,000 million five years ago. If it sounds silly, it’s because it is, but so is its billing: in the first fiscal quarter of 2026 billed 81.6 billion dollars, 85% more than the previous year in that same period. Also its benefit it’s already going off the charts: 58.3 billion, more than triple compared to the same period last year.
That this money goes to Taiwan and not to the United States is due to technical and objective issues: Taiwan produces 90% of the most advanced chips in the world, according to a study by the Stimson Center. Of that Taiwanese production, TSMC controls 70% and is going to invest between 52,000 and 56,000 million this year. Bottom line: If Nvidia wants cutting-edge manufacturing capability, it has to be there.
Why is it important. The best way to see it is to put Vera Rubin on the table, who In Huang’s words it is “probably the biggest product launch in Taiwan’s history.” Each system contains about two million parts and is assembled with 150 suppliers, almost all Taiwanese. This mechanism is not assembled by decree or in a legislature: it requires years and putting billions of dollars on the table. There is no factory in Arizona that can do something like this at least until 2030.
Constellation will be Nvidia’s new headquarters in Taipei and will come to stay permanently: 4,000 engineering professionals will work in that center that according to Huang It will be operational by 2030. It is no longer that it buys in Taiwan, it is that the most valuable semiconductor company in the world is building the heart of its R&D in that core, an island 10,000 kilometers from the United States. A splash of cold water on Trump’s aspirations.
Context. In January 2026, Taiwanese companies they committed to invest $250 billion in semiconductors and AI in the United States, as part of a trade agreement with Washington. Because Taiwan and the US are a symbiosis: each needs the other to maintain its position in the race for AI. The investment of a private company like Nvidia is another expression of this pact.
In fact, Nvidia is not the only one: AMD is doing exactly the same: associate with Taiwanese manufacturers such as ASE, SPIL and Wiwynn with their Helios AI platform on the horizon (expected for the second half of 2026). That the two largest AI chip designers in the world strengthen ties with Taiwan is confirmation that the island’s industry is strategically necessary for the entire industry, not a particular bet by one firm.
The elephant in the room: China. China’s role in this story is twofold: it is a threat and also a client. According to Reutersin 2026 Chinese companies have placed orders for more than two million units of the H200. Trade restrictions have made the operation difficult, but they have not been able to prevent it. One of the last cases point upon the arrival of a shipment of Nvidia AI chips to China via Japan.
Nvidia lives in a contradiction from which it cannot escape:
- Its supply chain is on an island that China considers its own.
- China, which is its largest potential market, is blocked.
- Washington prohibits him from selling to Beijing while asking for independence from Taipei.
And judging by his statements, Jensen Huang has bet everything on continuing to walk that wire.
Yes, but. The Nvidia CEO forgot one problem in his speech: Taiwan makes the overwhelming majority of the world’s most advanced chips, but TSMC’s diversification into Arizona, Japan and Germany will not be ready before 2028 at best.
That is to say, there are almost four years ahead in which Nvidia depends totally on Taiwan, a country that matters 97% of your energy. Furthermore, the atmosphere in the Strait of the same name is increasingly heated. Concentrating the production of its most critical component in a geographically hot spot is dangerous to say the least: if something explodes, there is no plan B. The closure of the Strait of Hormuz has reminded us of this the hard way.
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Cover | freepik and Jimmy Liao
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