TSMC's $65 billion Arizona facility can now match Taiwan production yields according to early trials

[Skye Jacobs]

The big picture: The US is committed to establishing semiconductor manufacturing within its borders, and perhaps no effort is more crucial to this goal than TSMC's three-fab facility in Arizona. The government is pouring billions into the development, alongside TSMC's $65 billion investment.

Taiwan Semiconductor Manufacturing Co. has reached a significant milestone in its expansion into the US. Recent trial production at the company's new Arizona facility has yielded results comparable to those of its established plants in Taiwan, according to Bloomberg, which cited a person familiar with the company who requested anonymity. This development is a positive sign for the chipmaker's ambitious US project, which has faced delays and doubts about whether it could match the production efficiency of its Taiwanese operations.

The Arizona plant began engineering wafer production in April using advanced 4-nanometer process technology. With production yields now on par with its facilities in Tainan, Taiwan, TSMC should be able to maintain its targeted gross margin rates of 53 percent or higher.

TSMC has much at stake with its US operations. The company plans to invest $65 billion in three plants in Arizona, making it the largest foreign direct investment in Arizona history and the largest foreign direct investment in a greenfield project in US history.

Concurrently, the US government is providing substantial support through grants and loans. TSMC is set to receive up to $6.6 billion in grants and $5 billion in loans for its Arizona project.

TSMC's Arizona facility is on track to begin production at its first fab in the first half of 2025. The second fab, set to start production in 2028, will produce chips using 2nm process technology with next-generation nanosheet transistors, in addition to 3nm technology. The third fab will focus on 2nm or more advanced processes, with production expected to commence by the end of the decade.

The initial plan had been for the first fab to achieve full production this year, but the timeline was delayed due to several workforce challenges. These included difficulties in finding skilled workers locally, cultural differences between TSMC's Taiwanese management and American employees, and a shortage of skilled construction workers that slowed the building process. This delay raised concerns about TSMC's ability to maintain efficiency with its US operations compared to its facilities in Taiwan.

Recent success in trial production has alleviated some of these concerns. TSMC has confirmed that the Arizona project is progressing as planned, although the company has not commented specifically on yield rates.

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TSMC's $65 billion Arizona facility can now match Taiwan production yields according to early trials

 

[holydiver]

Good good! Meanwhile, dummies in Europe are debating on how to get rid of all power plants.

 

[Win7user]

Fantastic! It's a good start...

 

[Porkous]

Is where you want your fabs to be.
Although they have shortage of construction workers. Weird thing. America And all it's skyscrapers?

I like it because anyway all your important components are designed in USA. Now they are in the chips there, too.

 

[Tekpot]

The U.S was mocking the USSR/other communist countries for Nationalizing industries, and the irony they're doing the same now.

 

[bandit8623]

People cheer, but lets see how much pollution they are allowed to dump into our water system. or will they catch it 10 years later? cough cough 3m

 

[bclaymiles]

The U.S was mocking the USSR/other communist countries for Nationalizing industries, and the irony they're doing the same now.

Grants that amount to about 10% of what TSMC is investing don't somehow make TSMC a nationalized industry; the government doesn't own or control it.

 

[bclaymiles]

People cheer, but lets see how much pollution they are allowed to dump into our water system. or will they catch it 10 years later? cough cough 3m

Semiconductors have been produced in the US for sixty years; there were pollution issues long ago, but there are no longer (notwithstanding existing EPA SuperFund sites still being cleaned up from way back then). Companies in the US are required to follow EPA rules, and can't even begin building a facility unless all potential pollution issues have been addressed and accounted for. TSMC's fabs are in the middle of barren desert; even if there were pollution issues, they are far removed from any meaningful impact to the population. There's not a chance at all that they'll emit pollution into the surrounding area; they'll be monitored contuously for that.

 

[bandit8623]

Semiconductors have been produced in the US for sixty years; there were pollution issues long ago, but there are no longer (notwithstanding existing EPA SuperFund sites still being cleaned up from way back then). Companies in the US are required to follow EPA rules, and can't even begin building a facility unless all potential pollution issues have been addressed and accounted for. TSMC's fabs are in the middle of barren desert; even if there were pollution issues, they are far removed from any meaningful impact to the population. There's not a chance at all that they'll emit pollution into the surrounding area; they'll be monitored contuously for that.

part of the problem is the water use they need. they are in a dry area and need a **** ton of water. hmm where do they get that from?

 

[bclaymiles]

part of the problem is the water use they need. they are in a dry area and need a **** ton of water. hmm where do they get that from?

The Salt river and Verde river, neither of which are near the facility. They'll treat whatever effluent they generate, likely recycling the vast majority of it. Again, the entire construction process is under a microscope, all of that has been planned and approved, and any effluent will be continuously monitored. Both the TMSC fab and the Intel fab nearby have made commitments to reclaim a large proportion of the water they use, and treating it is 'easy' in Arizona, because there's tons of solar energy to power the reclamation and treatment; TSMC has an enormous solar array onsite.

 

[toooooot]

The U.S was mocking the USSR/other communist countries for Nationalizing industries, and the irony they're doing the same now.

I think they would not be if it was not for one specific unfriendly communist country threatening to become a first world power.

 

[Subset6]

With 85% Taiwanese workers.. yup. progress.. gold star America.. you did it! Make no mistake this a box checked for a bill passed that cost tax payers billions. Chinese aggression in the region I'm sure has nothing to do with it, and the unsure promise that the US would actually intervene in such an attack. The world need's safe places for lithography after all.. an all to familiar tale of profit over people.

 

[gamerk2]

With 85% Taiwanese workers.. yup. progress.. gold star America.. you did it! Make no mistake this a box checked for a bill passed that cost tax payers billions. Chinese aggression in the region I'm sure has nothing to do with it, and the unsure promise that the US would actually intervene in such an attack. The world need's safe places for lithography after all.. an all to familiar tale of profit over people.

To be fair, that's what happens when you put major tech hubs in the middle of the desert where there aren't sufficient population to support it.

 

[Cracken]

With 85% Taiwanese workers.. yup. progress.. gold star America.. you did it! Make no mistake this a box checked for a bill passed that cost tax payers billions. Chinese aggression in the region I'm sure has nothing to do with it, and the unsure promise that the US would actually intervene in such an attack. The world need's safe places for lithography after all.. an all to familiar tale of profit over people.

Naturally most are Taiwanese workers, what else would they be. The workforce needed for the fabs simply cannot be found in the U.S - they are in short supply of workers with the right expertise.
The shift in chip manufacturing is happening, but yet TSMC expands more in Taiwan than they do in the west. The process will take decades and it will require more Taiwanese people willing to move to the west.

 

[ferrellsl]

part of the problem is the water use they need. they are in a dry area and need a **** ton of water. hmm where do they get that from?

This has been explained over and over again. The Phoenix basin is surrounded by high peaks that generate a lot of snow melt. Also, the Salt River flows right into Phoenix and it never dries up. There are also enormous reservoirs that also supply Phoenix with water from Roosevelt Lake, Apache Lake, Canyon Lake and Saguaro Lake. Phoenix is not a desert wasteland as you seem to believe. I've lived in the Mesa/Phoenix area for 10 years now so I know firsthand.

 

[ferrellsl]

To be fair, that's what happens when you put major tech hubs in the middle of the desert where there aren't sufficient population to support it.

Seriously? There are over 2 million residents in the Phoenix metro area and crap ton of high tech industries in the valley including Apple, Intel, Honeywell, etc.

 

[gamerk2]

Seriously? There are over 2 million residents in the Phoenix metro area and crap ton of high tech industries in the valley including Apple, Intel, Honeywell, etc.

I'm from NY; we have different definitions of a "big" city.

 

[Tekpot]

Grants that amount to about 10% of what TSMC is investing don't somehow make TSMC a nationalized industry; the government doesn't own or control it.

The fact that the U.S gov passed the law 'domiciliating CHIP industry' means the Gov 'Politically/juridically' control them, and ofc most shareholders are from Congress, same as other sectors (Pharma & ).

 

[bclaymiles]

The fact that the U.S gov passed the law 'domiciliating CHIP industry' means the Gov 'Politically/juridically' control them,

It literally doesn't, the CHIPS act is publicly available to read. The government has no ownership nor control of the company. The $6B grant and $6B loan are peanuts to TSMC, if they had to give up control of their company in order to construct fabs in the US, they'd just pull up stakes.

and ofc most shareholders are from Congress, same as other sectors (Pharma & ).

"Most shareholders are from Congress" - that's a vague construct. Are you saying that members of the House of Representatives and the Senate are majority holders of TSMC's stock? That would be pretty absurd. If you're saying that members of congress can own stock in the company, of course they can, as can you and I and anyone else can. That doesn't make TSMC a nationalized company.

 

[waclark]

part of the problem is the water use they need. they are in a dry area and need a **** ton of water. hmm where do they get that from?

I live pretty close to this plant. Water is a constant issue here in the greater Phoenix area. I have no idea why they chose Phoenix as say compared to something up in the NW, like WA State, or Idaho etc. They have TONS of water up there.

From what I've heard these plants can use a couple million gallons a day. They do recycle but the best of them only recycles 98%. So, what's 2% of 2M gallons? 40,000 gallons a day by my calculation. Given the average family of 4 will use about 400 gals a day, that's enough for 100 families per day!!!

Sooner or later, I suspect the solution will be to desalinate salt water and pump fresh water to AZ from CA.

 

[LimyG]

Much needed. Europe too. If Taiwan ever became truely a part of China. Well, "they," would have us by the short and curlies. The consequences...Nightmare.

 

[LimyG]

The U.S was mocking the USSR/other communist countries for Nationalizing industries, and the irony they're doing the same now.

I would almost always agree with you. But when it comes to semi-conductor production, it's essential to have national access to them. Europe should get it's act together too.
Taiwan great place. But if their big brother ever... you know, the risk of cutting off imports would be disaster. Big brother can never be trusted - at all.

 

[bclaymiles]

From what I've heard these plants can use a couple million gallons a day. They do recycle but the best of them only recycles 98%. So, what's 2% of 2M gallons? 40,000 gallons a day by my calculation. Given the average family of 4 will use about 400 gals a day, that's enough for 100 families per day!!!

Sooner or later, I suspect the solution will be to desalinate salt water and pump fresh water to AZ from CA.

Nothing exists in a vacuum. Phoenix area residents use approximately 29 percent less water per capita than they did in 1990. And the Phoenix area population has risen from about 1 million residents in 1990 to 2 million. The result is that gross water usage for the region has actually gone down as the population has gone up. Arizona as a whole uses about the same amount of water as it did in the 1950's.

On the other hand, the mighty Colorado River runs dry (most of the time) long before it reaches its delta in the Gulf of California, due to use of its water upstream (mostly for agriculture).

 

[waclark]

Nothing exists in a vacuum. Phoenix area residents use approximately 29 percent less water per capita than they did in 1990. And the Phoenix area population has risen from about 1 million residents in 1990 to 2 million. The result is that gross water usage for the region has actually gone down as the population has gone up. Arizona as a whole uses about the same amount of water as it did in the 1950's.

On the other hand, the mighty Colorado River runs dry (most of the time) long before it reaches its delta in the Gulf of California, due to use of its water upstream (mostly for agriculture).

Water usage may be the same, however, as you pointed out our water sources are drying up. We literally have a place here with no water, Rio Verde Foothills. Now, there are some reasons behind that like the developers didn't bother to ensure there would be water for the houses they built.

The bottom line is that using water equivalent to 100 families a day doesn't seem prudent given the current state of affairs. And it's not like there aren't other places in the US that have plenty of water.

 

[LimyG]

The fact that the U.S gov passed the law 'domiciliating CHIP industry' means the Gov 'Politically/juridically' control them, and ofc most shareholders are from Congress, same as other sectors (Pharma & ).

"Most of the shareholders are from Congress."

Are you serious? What basis for that comment? It's absurd. Apologies if you were being sarcastic in some manner.