Taiwan Plans $4 Billion Texas AI Hub and Tighter China Chip Export Controls Under US Trade Deal

Taiwan announced two major moves on October 16 that reinforce its alignment with Washington on semiconductor policy. The government revealed plans to fund a $4 billion industrial complex in Texas to anchor Nvidia's AI supply chain on US soil, while separately confirming it is tightening export controls on advanced AI chips to China as part of a broader US trade deal.

The Texas initiative, backed by Taiwan's Minister of Economic Affairs Kung Ming-hsin, would create industrial parks housing smaller suppliers essential to Nvidia and TSMC's operations, giving those manufacturers a domestic US foothold. Jensen Huang has acknowledged Nvidia can only fill about 70 percent of current demand, making supply chain expansion a pressing priority.

On export controls, Taiwan is preparing restrictions that would broadly limit AI chip sales to Chinese customers, mirroring Washington's approach and joining the Trump administration's clampdown on semiconductor smuggling to China. The measures go beyond existing entity-list rules, which previously targeted named firms such as Huawei, extending potential curbs to a wider range of Chinese buyers.

Markets absorbed both developments cautiously. TSMC shares slipped roughly 0.3 percent in premarket trading. Nvidia fell 1.84 percent on the day and was down about 5.75 percent on the week, with broader AI and chip names under pressure amid a 10-year Treasury yield near 5.06 percent and Nasdaq futures down 1.2 percent.