TSMC's Arizona Plant To Start Making Advanced Chips
Arthur T Knackerbracket has processed the following story:
After years of planning, building, geopolitical wrangling, and workforce challenges, the world's largest semiconductor foundry, Taiwan Semiconductor Manufacturing Co. (TSMC) is officially starting mass production at an advanced chip-manufacturing facility in Phoenix in 2025. The fab represents the arrival of advanced chip manufacturing in the United States and a test of whether the 2022 CHIPS and Science Act can help stabilize the semiconductor-industry supply chain for the United States and its allies.
In late October 2024, the company announced that yields at the Arizona plant were 4 percent higher than those at plants in Taiwan, a promising early sign of the fab's efficiency. The current fab is capable of operating at the 4-nanometer node, the process used to make Nvidia's most advanced GPUs. A second fab, set to be operational in 2028, plans to offer 2- or 3-nm-node processes. Both 4-nm and more advanced 3-nm chips began high-volume production at other TSMC fabs in 2022, while the 2-nm node will begin volume production in Taiwan this year. In the future, the company also has plans to open a third fab in the United States that will use more advanced technology.
The chip-manufacturing giant is currently set to receive US $6.6 billion in CHIPS Act funding for building the first Arizona plant. But government funding isn't the only reason semiconductor manufacturing is coming back to the United States. TSMC makes 90 percent of the world's advanced chips, and U.S.-based companies including Apple, Nvidia, Google, Amazon, and Qualcomm rely on them. The chip shortages during the economic shock of the early COVID years, and Chinese president Xi Jinping's increasingly aggressive rhetoric about Taiwan, have made TSMC's customers and international policymakers uncomfortable.
TSMC announced their intention to invest in Arizona in 2020. "The CHIPS Act didn't make it happen-companies have largely moved on their own," says TechInsights semiconductor analyst Dan Hutcheson. Big customers like Apple have been pushing TSMC to build fabs elsewhere to minimize risk, he says.
Hutcheson says having TSMC fabs outside Taiwan is good for the company's customers and good for Taiwan. The island's "silicon shield" against China has done its work - TSMC's dominance in advanced chip manufacturing gives the United States and other countries a reason to support Taiwan. But going forward, Hutcheson says the shield could turn into a target. If the United States and its allies are increasingly dependent on chips made only in Taiwan, then China can cause major damage to the U.S. economy by targeting Taiwan. Hutcheson says TSMC's geographical diversification will make its home country less of a target. The company has also opened a fab in Japan and is building one in Germany.
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