Taiwan Semiconductor Manufacturing Co (TSMC) is reportedly nearing a deal to manufacture Nvidia’s latest AI chips at a new factory in the US which is expected to start volume production in 2025.

Reuters reported if a deal is reached, the contract manufacturer would make Blackwell chips at a facility in the US state of Arizona, though added the silicon would be shipped to Taiwan for packaging because the new plant would lack the chip-on-wafer-on-substrate capacity required.

The company currently produces Nvidia’s Blackwell chips in Taiwan.

Taipei Times reported TSMC’s first Arizona facility is due to begin manufacturing 4nm chips in early 2025, with a second plant expected to produce 2nm chips by the end of the decade.

Taiwan law prohibits TSMC from making chips overseas using its most-advanced processing node, which currently is 2nm.

TSMC is receiving $11.6 billion in grants and loans under the US CHIPS and Science Act to build a third production facility in Arizona.