Taiwan Semiconductor Manufacturing Co. and Arizona authorities are talking about adding advanced chip packaging capacity to the company’s plants in the state, Gov. Katie Hobbs said in Taipei on Tuesday.

Hobbs is part of a broader U.S. delegation visiting the island, with discussions among officials and companies focused on Taiwan’s key role in the semiconductor supply chain. Under Secretary of Commerce Laurie E. Locascio said the U.S. is talking to TSMC about research and development for the first time, in an effort to bring more of the world’s biggest contract chipmaker’s technology onshore.

Packaging has become a bottleneck in the fabrication of the most in-demand silicon today, Nvidia’s artificial intelligence accelerators, made by TSMC. The Hsinchu-based company has committed to expanding its packaging capacity in Taiwan, but expects supplies to be tight for another 18 months, Chairman Mark Liu said at Semicon earlier this month. At the same event, Cadence Design Systems Chief Executive Officer Anirudh Devgan said packaging will be the key battleground for nations seeking to establish tech leadership.

TSMC’s commitment to Arizona now spans two fabs and $40 billion in investment, and adding advanced packaging to that endeavor would again raise the ceiling on what’s possible to produce there. In December, TSMC said it would offer more advanced 4-nanometer chips from its Arizona plant, at the request of Apple, one of its biggest customers.

Arizona and TSMC are "working through some bugs,” Hobbs said, but she is "very impressed by the speed with which it has been built” and the project continues on schedule. TSMC executives said at its last earnings call that operation of the first Arizona plant will be delayed to 2025 due to a lack of skilled labor.

Hobbs noted that more than 30 supply chain companies have come to Arizona in the past year. She said the state has a "highly skilled workforce” that’s continuing to grow. She added that Taiwan "needed to bring some more workers over, but there are 12,000 builders on this site every single day that are largely Arizonans. And they’re working side by side and learning those skills, those advanced skills so that we can grow that really advanced construction workforce as well.”

TSMC said in a statement that it was "honored” to host Hobbs at its headquarters where executives held "productive discussions” with her. "We believe the dialogues that we held during this visit will help us to work together even more closely in the future,” the company said.