TSMC’s Arizona Facility Is Manufacturing Apple A16 Processors

• TSMC has started production in its first US fabrication unit in Arizona and Apple is its first big customer. The chipmaker is producing A16 Bionic processors.
• The A16 processors were first used in the iPhone 14 Pro. Although we don't know much about Apple's plans with these chips, it might use them in upcoming iPads and/or iPhone SE.
• The production has started in the first fabrication unit. The company plans to add two more fab units in Phoenix alone. However, the timelines for both of these have been pushed back.

The Taiwan Semiconductor Manufacturing Company (TSMC) Arizona fabrication facility is ready to roll and Apple will be its first big customer.

According to reports, the tech giant's A16 processors are being built using TSMC's 5nm technology. Although in small quantities, the production is already underway. TSMC plans to increase output after mid-2025, i.e., once the fabrication's second stage is completed.About the Processor

The A16 Bionic processor came out two years ago with the iPhone 14 Pro - it was then also used in the iPhone 15 series. The first sets were made in Taiwan using the N4P process, which is also known as the 4nm mode.

Here, it might get a little confusing for some of you because many people use 4nm and 5nm interchangeably. TSMC has clarified that it's all a part of the broader 5nm family of processes - more like an enhanced version of 5nm. The bottom line, therefore, is that you can call it whatever you please.

Not much is known about which products might have these new Made in America' chips. Our best guess is that the upcoming iPads (not the iPad Mini, as it's coming out this October) and iPhone SE might have the new Arizona-built A16 processors.About TSMC's Arizona Venture

The fabrication in the unit in Arizona is part of a much bigger plan. TSMC plans to invest $65 billion in building three fabrication units across Phoenix that will use 4nm, 3nm, and 2nm processes to manufacture the finest quality of chips and processors the world has ever seen.

The construction of the first facility started 3 years ago, in 2021. Back then, the company had expected to release the first bulk of 4nm chips by 2024. However, multiple hurdles, such as the COVID-19 pandemic, cultural differences between Taiwan management and American employees, and delays in construction pushed this timeline to 2025.

The dates for the second fabrication facility have also been pushed back. The production was initially supposed to start in 2026. However, it now looks like production won't start until 2027 or 2028. It all depends on customer demand, especially because the latest Made in America' chips will be at least 30% costlier.

This project also received immense support from the U.S. government's CHIPS and Science Act - a recently passed legislation that aims to help the US develop semiconductors domestically and reduce its reliance on Asia.

Intel and Its CHIPS Act FundingSpeaking on the CHIPS Act, there's something else huge you should be aware of: Intel might miss out on its promised share of the CHIPS Act fund. The White House has allegedly delayed payments owing to the company's poor performance.

In order to qualify for the funding, the company needs to go through stringent checks and meet the expectations that were initially promised. However, Intel's data center CPU and foundry businesses aren't performing as expected - the company reported a massive $1.6 billion loss in the second quarter of 2024.

Addicting to its troubles, Intel announced layoffs affecting 15% of its workforce. On top of that, some of its shareholders sued it after its stock prices went down. All in all, it's a bad time for Intel, with the company struggling to survive.

What makes things even more complicated is that Intel was supposed to be the biggest beneficiary of this scheme. However, considering its financial woes, followed by TSMC's production launch and deal with Apple, is it possible that Intel might lose its spot to TSMC? Only time will tell, so stay tuned to find out.

Related: Intel shares surge 6% following plans to separate its AI chip manufacturing subsidiary

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