Nvidia To Build Network Of AI Chip Plants In Japan

Nvidia chief Jensen Huang says company to work with local companies to build network of AI chip plants in Japan

Nvidia is to collaborate with local companies to build a  network of semiconductor manufacturing facilities in Japan to meet demand for artificial intelligence (AI)-oriented graphics chips, Nvidia chief executive Jensen Huang said on Tuesday.

Huang also said Nvidia, which is by far the leading supplier of chips for training AI tools, would work with Japan to support domestic start-ups in the highly competitive AI sector.

“Japan has all of the technical expertise, the industrial capability to create your own artificial intelligence right here in Japan,” Huang sais during opening remarks in a Tuesday meeting with Japanese economy minister Yasutoshi Nishimura, Bloomberg reported.

The previous day Huang met with prime minister Fumio Kishida and afterward told reporters Nvidia would do its best to “prioritise Japan’s requirements for GPUs” in the midst of heavy demand.

Nvidia chief executive Jensen Huang. Image credit: Nvidia
Nvidia chief executive Jensen Huang. Image credit: Nvidia

AI race

AI has become an investment hotspot over the past year after the popularity of generative AI tools surged with the launch of OpenAI’s ChatGPT.

Worldwide demand for AI infrastructure including Nvidia GPUs has sent Nvidia’s share price soaring and has led a number of countries to prioritise the technology as critical national infrastructure.

The US in October introduced new sanctions aimed at preventing China from obtaining high-end AI processors and the manufacturing technology from developing such chips itself.

US commerce secretary Gina Raimondo in a speech on Saturday criticised Nvidia for making GPUs that could be sold to China in compliance with US restrictions but were capable of performing AI training tasks.

Local production

“If you redesign a chip around a particular cut line that enables them to do AI, I’m going to control it the very next day,” she said, while calling China the “biggest threat we’ve ever had”.

Meanwhile the US, Japan and other countries have made efforts to localise production of GPUs and other high-end chips in their own countries rather than in Taiwan, which manufactures about 90 percent of all advanced semiconductors.

Japan recently passed an extra budget that included about 2 trillion yen ($13.6bn, £11bn) in funding for chip investment and manufacturing, including support for a third Taiwan Semiconductor Manufacturing Co (TSMC) factory in Japan that is to focus on making high-end AI chips.

The funding is also expected to support chip foundry venture Rapidus, which intends to manufacture high-end chips in Japan’s northern island of Hokkaido.