Nvidia to build semiconductor plant in Japan, boosting AI capabilities

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Nvidia to build semiconductor plant in Japan, boosting AI capabilities

TOKYO - Nvidia Corp (NASDAQ: NVDA ) has announced a collaborative venture to construct a semiconductor plant in Japan, aiming to bolster the country's role as a key player in the generative AI technology sector. In a meeting with Japan's Economy Minister Yasutoshi Nishimura today, Nvidia's CEO Jensen Huang highlighted the importance of local expertise and industrial capacity in driving a robotics revolution. This move is part of Tokyo's broader strategy to invest in advanced technology, which is expected to spur economic growth.

Prime Minister Fumio Kishida has committed significant financial support to companies like TSMC and Rapidus to expand high-end chip manufacturing, reinforcing the semiconductor industry's foundation in Japan. During discussions with Kishida, Huang emphasized the increasing demand for Nvidia's GPUs and pledged to prioritize supply for Japan. This commitment is pivotal as major Japanese corporations, including NEC Corp., SoftBank (TYO: 9984 ) Corp., Sakura Internet Inc., and Nippon Telegraph and Telephone (OTC: NPPXF ) Corp., intensify their generative AI research and adoption initiatives.

The joint venture aligns with Japan's semiconductor strategy outlined in June 2021, which aims to restore the nation’s leading position in the chip industry through collaboration with the U.S. and substantial subsidies. These efforts are part of an expansive $88 billion extra budget designated to counteract inflation's impact on households and businesses.

The demand for generative AI applications is on the rise, as evidenced by OpenAI’s ChatGPT, which relies on Nvidia A100 GPUs. This surge in demand has led to soaring data center revenues for Nvidia, underscoring the strategic significance of domestic GPU production capabilities.

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