According to a report from Commercial Times, citing industry sources, TSMC has become the focus of active collaboration efforts from various parties. The governor of Texas, Greg Abbott, plans to visit TSMC after the U.S. elections to persuade the company to transfer its Arizona plant investment plan to Texas, offering discounts on water and electricity, along with subsidy incentives.

Texas is actively courting TSMC, offering more favorable policies in hopes of persuading the company to shift its original Arizona investment to the state. Furthermore, the report indicated that, citing industry sources, Texas offers a well-established supply chain cluster of Taiwanese factories, along with its proximity to Mexico.

The report also noted that Samsung Display has sought TSMC’s production support to meet Apple’s growing demand. According to the report, institutional investors highlighted that as the LCD market shifts to AMOLED, UMC’s display driver capacity is facing supply shortages, and TSMC is the only company capable of meeting Apple’s production capacity requirements. Additionally, next year’s capacity for mature process production is expected to be loose, and TSMC is anticipated to offer discounts to boost utilization rates.

Regarding the technological development from TSMC, the report also indicated that TSMC is advancing its 16nm FinFET process to produce driver ICs, enhancing their high performance and low power consumption, which is expected to appeal to Apple.

According to the report, industry sources indicate that FOPLP packaging technology is a key area of development for both Apple and TSMC, suggesting that FOPLP will be a major focus of advanced packaging innovation in the next phase. The report also speculates that the Texas governor’s visit to TSMC may have been arranged by Apple, a major client of TSMC.

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• [News] TSMC’s First Plant in Arizona Achieves Early Chip Production Yields Higher than Taiwan’s
• [News] TSMC Reportedly Begins Small-Scale Production in Arizona for Apple’s A16 with the N4P Node

(Photo credit: TSMC)

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)

In early September, rumors have it that TSMC’s first US fab in Arizona began producing engineering wafers using the 4nm process in April, with yields reportedly comparable to those manufactured in its Southern Taiwan Science Park facility. Now here’s the latest update: the fab has started trial production for Apple’s A16 chip, according to a report by Tim Culpan at substack, a technology columnist.

Tim Culpan notes that the mobile processors are manufactured with TSMC’s 5nm, or the so-called N4P node, which is the same as the node used in Taiwan to manufacture A16. The N4P node is actually a member of the 5nm family, as it is regarded as an enhanced version of 5nm, the report explains.

It is worth noting that Apple’s A16 SoC, though launched two years ago with iPhone 14 Pro, is considered as one of the most advanced mobile chips for the company, as the chip is also be seen in iPhone 15 and iPhone 15 Plus models. Culpan indicates that the move marks a milestone that instead of beginning with some less critical chips, Apple and TSMC intend to aim high from the start.

According to Culpan, Apple’s A16 is currently being trial-produced at TSMC Arizona’s “Fab 21” Phase 1 facility, with a small production volume. However, once the second stage of the Phase 1 fab is completed, the output will significantly increase.

TSMC plans to build three plants in Arizona, each with cleanroom spaces twice the size of typical logic fabs in the industry. The first fab is expected to begin mass production in the first half of 2025.

TSMC’s second fab in Arizona will use 2nm process technology to meet strong AI-related demand, with production expected to begin in 2028. The third fab will employ 2nm or even more advanced process.

However, the situation for Samsung’s investment in the U.S. would be a different story. A previous report from Korean media outlet Business Korea noted that persistent issues with its 2nm yield rate have led Samsung to decide to withdraw personnel from its Taylor, Texas plant, signaling another setback for its advanced wafer foundry business.

As for Intel, which proactively pursues the support of the U.S. government, it is holding steadfast on its investments in the country despite recent announcements to spin-off its foundry business and delaying the projects in Germany and Poland for two years.

Intel plans to invest USD 100 billion over the next five years in new fabs and expansions across Arizona, New Mexico, Ohio, and Oregon, creating 10,000 manufacturing jobs and 20,000 construction jobs.

Read more

• [News] Showing Positive Progress, TSMC’s Arizona Fab Reportedly Reaches Production Yields on Par with Taiwan
• [News] TSMC Receives USD 6.6 Billion for Chipmaking from the US Government, Commits to Constructing Third Fab

(Photo credit: Apple)

Grappling with a series of operational challenges, Intel has been weighing options to stem losses, with cost reduction being one of its major focus. Under this scenario, the decisions the semiconductor giant has made include slashing 15% of its workforce and the cancellation of its 20A process, which can help avoiding the significant capital expenditures needed to scale the node to full production.

In addition to the aforementioned moves, rumors have been circulating regarding the progress of Intel’s global expansion, hinting that the projects at Germany and Penang might be put on hold. Moreover, though granted with USD 8.5 billion in grants and USD 11 billion in loans under the Chips and Science Act, the company has not yet received any money from the U.S. authority, raising concerns on the feasibility of its ongoing Arizona and Ohio projects.

Here is a roundup of Intel’s major expansion projects which have been reportedly delayed, scaling down, or put on hold recently, as cost considerations may be the primary reason.

Accompanied by construction crews on Oct. 12, 2023, Intel CEO Pat Gelsinger toured the company’s two new fabrication plants being built in Chandler, Arizona. (Credit: Intel)

US: Ohio Delayed for 2 Years, with Mass Production Expected in 2027-28

Intel plans to invest USD 100 billion over the next five years in new fabs and expansions across Arizona, New Mexico, Ohio, and Oregon, creating 10,000 manufacturing jobs and 20,000 construction jobs.

However, according to a previous report by The Register, the construction of Intel’s two fabs in Arizona has progressed more slowly than anticipated. Rising costs for materials and labor, combined with a surge in investments in the state, have resulted in a shortage of workers.

Citing Nikkei, the report notes that the cost of constructing a plant in Arizona is now four to five times higher than in other regions, such as Asia, and several times more than the initial budget Intel had anticipated.

The semiconductor giant’s Fab 52 and Fab 62 in Arizona are previously scheduled to be completed in 2024. However, The Register notes that the schedule may be delayed a bit, as the fabs are likely to begin operations later this year or in early 2025, targeting to manufacture chips using Intel’s next-generation Angstrom-era process technology, including the 18A node.

The 20 billion project in Ohio, on the other hand, may be facing larger obstacles as Intel has delayed the plan due to market downturns and delays in U.S. subsidies.

With an initial plan to begin chip manufacturing in Ohio in 2025, the company has now postponed the pipeline, aiming to complete the two fabs in 2026–2027, with operations expected to commence around 2027–2028.

EMEA: Hard-hit Area as Investments on Hold in Israel, France and Italy

The situation is not too optimistic in Europe, neither. According to a report from global media outlet Volksstimme, the construction of Intel’s Fab 29.1 and Fab 29.2 near Magdeburg, Germany, which may totaling 30 billion euros, has been postponed due to pending approval of EU subsidies and the need to remove and reuse black soil. The date of commencement has been pushed from summer 2024 to May 2025.

It is reported that Intel’s fabs in Germany were originally scheduled to start operations by late 2027 and were expected to employ advanced manufacturing processes, potentially Intel 14A (1.4nm) and Intel 10A (1nm) nodes. However, Intel now estimates that it will take four to five years to build these plants, and production is expected to commence between 2029 and 2030.

In addition, earlier in June, the struggling semiconductor giant also put a halt to the expansion of a major factory project in Israel, which was set to invest an additional USD 15 billion in a new chip plant, according to The Times of Israel.

In December, Intel had announced plans to increase its investment in the chip manufacturing plant in Kiryat Gat, from USD 10 billion to USD 25 billion, in order to secure a USD 3.2 billion grant from the Israeli government. However, it has now suspended the plan, suggesting that “managing large-scale projects, especially in our industry, often involves adapting to changing timelines,” the report states.

It is also worth noting that Intel tends to scale down on its production in the EMEA area, as in June, the company announced the sale of a 49% stake in its plant in Leixlip, Ireland, to Apollo Global Management for USD 11 billion, securing more external funding for usage.

Another report by POLITICO in July also notes that the U.S. semiconductor giant has discreetly suspended several investment plans in Europe after incurring significant losses, dealing a setback to Europe’s push to produce more microchips.

In 2022, Intel announced an initial investment of over €33 billion for R&D and Manufacturing in EU, targeting countries including France, Germany, Ireland, Italy, Poland and Spain. However, the report suggests that the promised investments for France and Italy, valued at billions of euros and potentially creating thousands of jobs, will be put on hold for now.

Asia: New Packaging Project in Malaysia Suspended

The latest of Intel’s moves on halting its global expansion would probably be the cancellation of its new chip packaging and testing project in Penang as part of cost-cutting efforts, while the operations of existing facilities will remain unaffected.

The U.S. chip giant had announced three years ago that it would invest approximately USD 7 billion to build new chip packaging and testing facilities in Malaysia, looking to make the site its largest overseas packaging and testing base. Per a report by Malaysia media outlet The Star, Intel employs around 14,000 people in Malaysia, meaning over 2,000 local employees may face the risk of job loss.

Would the series of emergency measures taken by the struggling giant stem the bleeding? Or would these moves more like a cornered beast fighting out of its way? The only thing for sure now may be that Intel would have a pretty different look after the upcoming board meeting in mid-September.

Read more

• [News] Qualcomm Rumored to Consider Acquiring Parts of Intel’s Chip Design Business, with a Focus on PC Segment
• [News] Amidst Rumors of Germany Plant Delay, Intel’s Penang Project Also Reportedly on Hold

As per a report from Bloomberg citing sources, it’s pointed out that TSMC’s first US fab in Arizona began producing engineering wafers using the 4nm process in April, with yields reportedly comparable to those manufactured in its Southern Taiwan Science Park facility, showing promise in meeting its targets.

Addressing on the matter, TSMC reportedly stated that the project is proceeding as planned and is making good progress, without further commenting on the yield.

TSMC plans to build three plants in Arizona, each with cleanroom spaces twice the size of typical logic fabs in the industry. The first fab is expected to begin mass production in the first half of 2025.

TSMC’s second fab in Arizona will use 2nm process technology to meet strong AI-related demand, with production expected to begin in 2028. The third fab will employ 2nm or even more advanced process.

TSMC stated that once the fabs are fully operational, they will deliver the same level of manufacturing quality and reliability in Arizona as is provided in its Taiwan facilities.

The U.S. government officially announced in April that it will provide a USD 6.6 billion subsidy to TSMC, and confirmed that TSMC will build its third fab in Arizona, USA, with total investment rising to USD 65 billion.

Read more

• [News] TSMC’s Kumamoto Fab Influence Expands, Economic Spillover Effect Expected to Exceed JPY 10 Trillion
• [News] TSMC Receives USD 6.6 Billion for Chipmaking from the US Government, Commits to Constructing Third Fab

(Photo credit: TSMC)