Taiwan Semiconductor Manufacturing Co. is accelerating work on its second factory in Arizona as demand from Nvidia for advanced AI chips continues to climb, according to Reuters. The move underscores how the global race for artificial intelligence hardware is reshaping semiconductor investment in the United States.

The expansion comes while U.S. export controls on chipmaking equipment to China remain in place. Those restrictions have forced major manufacturers to navigate tighter rules even as they try to scale production for high-end processors used in data centers and other AI systems.

TSMC’s Arizona buildout is part of a broader push by Washington to bring more advanced chip production onto U.S. soil. For Nvidia, which relies heavily on TSMC for manufacturing, the added capacity could help support growing orders as demand for AI infrastructure keeps rising.

The project also highlights the strategic importance of semiconductor supply chains at a time when governments and technology firms are competing for control over the hardware that powers machine learning, cloud services, and next-generation computing.