[News] TSMC’s First Plant in Arizona Achieves Early Chip Production Yields Higher than Taiwan’s

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According to a report from Bloomberg, TSMC’s first wafer fab built in Arizona, USA, has achieved a major breakthrough in early production yield, surpassing that of similar factories in Taiwan.

The report in Bloomberg indicates that, citing the words from TSMC’s U.S. division president Rick Cassidy, the yield of chips produced at TSMC’s facility in Phoenix is about 4 percentage points higher than that of comparable facilities in Taiwan.

The recent yield improvements are significant for TSMC, which has traditionally maintained its most advanced and efficient facilities in Taiwan. According to Bloomberg, TSMC’s Arizona plant faced early challenges due to a shortage of skilled workers for advanced equipment installation and issues related to safety and management. However, TSMC resolved these setbacks by reaching an agreement with construction labor unions late last year.

Cassidy further pointed out that TSMC may intend to further expand its presence in the United States, partly depending on whether the government will provide more subsidies, referring to the early conversations in Washington about a second CHIPS Act. He mentioned that there is space for at least six total fabs at the Phoenix complex, according to the report in Bloomberg.

Earlier this year, the U.S. government has officially announced that it will provide subsidy about USD 6.6 billion to TSMC, and TSMC will build its third fab in Arizona.

According to the press release from TSMC, Arizona’s first fab is on track to begin production using 4nm technology in the first half of 2025. The second fab will produce the world’s most advanced 2nm process technology with next-generation nanosheet transistors in addition to the previously announced 3nm technology, with production beginning in 2028.

The press release further states that the third fab will produce chips using 2nm or more advanced processes, with production beginning by the end of the decade.

The report in Bloomberg pointed out that, citing the words of Chief Executive Officer C.C. Wei, TSMC expects volume production of its first fab in Arizona to start in the beginning of 2025, and are confident to deliver the same level of manufacturing quality and reliability  in Arizona as from fabs in Taiwan.

On the other hand, according to the report in Bloomberg, Samsung’s investment in the U.S. is facing challenges. Meanwhile, Intel, despite being a major beneficiary of the CHIPS Act, is experiencing financial difficulties due to delays in global projects and may consider selling off assets.

According to a report from MoneyDJ, TSMC previously has announced that its first US fab in Arizona has begun producing engineering wafers using the 4nm process in April but did not provide additional details about the yield. Investors are concerned about the yield and expect that the company’s gross profit to maintain stable.

Addressing this issue, according to the report from MoneyDJ, TSMC mentioned that the gross profit rate will remain 53% or even higher, and the net profit margin has maintained above 36% in the last four years.

(Photo credit: TSMC)