Nvidia is brushing aside concerns over the vulnerability of Taiwan in the chip supply chain, as it plans to spend $150 billion annually with Taiwanese suppliers.
TSMC shares gained 2% on the news.
Nvidia CEO Jensen Huang announced the huge spending plan at an event in Taipei to celebrate the launch of the chip maker's new campus in Taiwan on Wednesday.
Huang noted that Nvidia is already spending around $100 billion a year annually in Taiwan, the home of its most important supplier Taiwan Semiconductor Manufacturing. He didn't give a time frame for the boost to its investment.
Huang is in Taiwan ahead of the Computex conference, the annual event which acts as a showcase for the self-ruled island's technology industry and a reminder of its vital place in global supply chains.
Nvidia's vote of confidence is an important one, amid persistent concerns that Beijing will one day move against Taiwan, which China considers its own.
Those worries have intensified recently after President Donald Trump suggested earlier this month he might use a $14 billion package of U.S. arms for Taiwan that awaits his approval as a "negotiating chip" with China. The comments were made after Trump's summit with Chinese leader Xi Jinping.
American law makes it U.S. policy to provide Taiwan with weapons for its own self-defense. Trump has said policy on Taiwan hasn't changed and in December approved a separate $11.1 billion arms package.