Nvidia wants TSMC to make memory chips because of a large shortage

Taiwanese chip giant TSMC is considering a notable expansion of its operations. At Nvidia's request, the company is investigating whether it can produce advanced memory chips itself.

This would give TSMC an even greater role in the fast-growing artificial intelligence market, where serious memory shortages are causing problems.

According to business medium The Information, TSMC has started working out plans for the production of so-called 3D DRAM memory chips.

These are advanced memory chips in which components are placed one on top of the other. This technique can help to enable more memory and higher performance within a limited space.

The plans would have arisen at the request of Nvidia. The American chip designer is TSMC's largest customer and plays a central role in the global AI industry. TSMC produces all the powerful processors that Nvidia uses for its AI systems. By also making memory chips, the company would get its hands on a larger part of the production.

According to two sources familiar with the plans, the project is still in the preparatory phase. TSMC and Nvidia have not yet officially confirmed the message.

The potential expansion comes at a time when demand for AI hardware has grown explosively. Big tech companies are investing hundreds of billions of dollars in data centers to develop increasingly powerful AI models.

This requires not only fast processors, but also huge amounts of memory. It is precisely these memory chips that are becoming increasingly difficult to obtain. The shortages have driven up prices and are causing companies to look for alternative suppliers.

Apple is also affected by this. The company raised the prices of certain products earlier this year, pointing to rising memory costs. For Nvidia, an expansion at TSMC can help reduce dependency on existing memory producers.

Earlier it was announced that Nvidia has asked suppliers such as Samsung, SK Hynix and Micron to use TSMC technology for components of new AI memory chips.

It is not yet known when TSMC will actually start producing 3D DRAM and how much the company wants to invest in it.