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.

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(Photo credit: TSMC)

According to a report from Bloomberg, Applied Materials Inc. pointed out that the U.S. Department of Justice (DOJ) has requested information regarding its federal grant applications, further intensifying the government’s investigation into the company’s operations.

Per a regulatory filing last week, the chip equipment manufacturer received a subpoena from the DOJ and is fully cooperating with the government. Reportedly, the company stated that the request pertains to certain federal award applications and information submitted to the federal government.

Applied Materials had applied for government support for its planned research center under the U.S. CHIPS and Science Act, which was expected to bolster local chip facilities.

Yet, per previous reports by Bloomberg and Tom’s Hardware, the company’s funding application was ultimately denied, leaving the USD 4 billion research center planned for Sunnyvale, California, underfunded.

It is worth noting that though the U.S. keeps tightening the export controls on the semiconductor sector, major chip equipment makers seem to become increasingly dependent on the Chinese market.

Thus, Applied Materials’ dealings with China have already been under government scrutiny. Notably, from February to April, China accounted for 43% of the total sales of Applied Materials, a 22 percentage point increase YoY.

Back in February of this year, Applied Materials had already received subpoenas from the U.S. Securities and Exchange Commission, as well as the U.S. Attorney’s Office for the District of Massachusetts, even before the DOJ subpoena, and was reportedly under investigation for allegedly sending equipment to SMIC, China’s leading chipmaker, through South Korea without export licenses.

Addressing the matter, Applied Materials did not immediately respond to requests for comment.

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• [News] Funding for Applied Materials’ USD 4 Billion R&D Center Reportedly Denied by the U.S. Government

(Photo credit: Applied Materials)

On August 16, the U.S. government announced a preliminary agreement with Texas Instruments (TI) to propose up to USD 1.6 billion in direct funding through the CHIPS and Science Act to support three 300mm semiconductor wafer fabrication plants (Fabs) under construction in Texas and Utah. Two of them (SM1 and SM2) is located in Sherman, Texas, and one (LFAB2) in Lehi, Utah.

Haviv Ilan, President and CEO of Texas Instruments, stated that the company plans to increase its internal manufacturing rate to over 95% by 2030, and is currently expanding its 300mm wafer capacity to meet customer demand for analog and embedded processing chips in the coming years.

The funds will respectively be used to build the clean room for SM1 and complete the initial production pilot line, construct the clean room for LFAB2 to start initial production, and build the shell for SM2. In addition to the funding, the U.S. government will also provide up to USD 3 billion in loans to TI.

Moreover, TI expects to receive an estimated USD 6 billion to USD 8 billion from the U.S. Department of Treasury’s Investment Tax Credit for qualified U.S. manufacturing investments, which will support the company’s investment of over USD 18 billion in building the new facilities.

Previously, TI announced the plan to spend USD 30 billion to construct up to four interconnected wafer fabs (SM1, SM2, SM3, SM4) to meet customer demand for the coming decades.

As per its 2022 plan, TI will build six new 300mm wafer fabs by 2030. Among them, RFAB2 in Richardson, Texas, and the LFAB plant acquired from Micron began production in 3Q22 and 1Q23, respectively. Two of the four Sherman plants completed construction in 2023, with the remaining two to start construction between 2026 and 2030.

Aside from the above mentioned plan, TI announced the construction of a second 300mm fab in Lehi, Utah in February 2023, which commenced construction in the second half of 2023 and is expected to start production as early as 2026.

This fab will primarily produce analog and embedded processing chips. It is adjacent to the existing 300mm wafer fab LFAB. Once completed, the two fabs will be merged into a single operation.

Looking forward, TI aims to achieve revenue of USD 45 billion by 2030, more than doubling its 2022 revenue. The company targets a compound annual growth rate (CAGR) of 7% over the next decade, compared to an average growth rate of 4% from 2010 to 2020.

To achieve this, TI has revised its capital expenditure plans, increasing its annual capital spending to USD 5 billion for 2023-2026, with capital expenditures accounting for 10%-15% of revenue after 2027.

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• [News] Nearly 40% of Major Manufacturing Projects Reportedly Face Delays under U.S. IRA and CHIPS Act
• [News] Texas Instruments Plans Large-Scale Transition of GaN Chip Production from 6-inch to 8-inch Wafers

(Photo credit: Texas Instruments)

Recently, the Financial Times reported that despite over USD 400 billion in tax incentives, loans, and subsidies provided by the U.S. under the Inflation Reduction Act and the CHIPS and Science Act to boost local clean energy technology and semiconductor industries, the resurgence of U.S. manufacturing has been delayed as investors hit pause on their plans.

Reportedly, there are 114 major projects tied to these acts, totaling USD 227.9 billion in investments. However, projects with a combined investment of approximately USD 84 billion have faced delays ranging from two months to several years, with some even indefinitely postponed. These delays include several semiconductor projects.

Companies involved have cited worsening market conditions, slowing demand, and uncertainties in domestic policies as reasons for altering their investment plans.

• TSMC Delays Production at Arizona Facility

On August 13, TSMC announced several board resolutions, including the approval of a nearly USD 29,6 billion capital budget. Among these, TSMC approved up to USD 7.5 billion in funding for its wholly-owned subsidiary, TSMC Arizona.

TSMC had initially planned to build three fabs in Arizona over the next few years, with a total investment of USD 65 billion. However, per a recent New York Times report, despite four years having passed since the announcement, the Arizona plant has yet to produce a single chip.

According to a report from WeChat account DRAMeXchange, cultural differences and competition for labor resources with Intel are among the factors contributing to the challenges faced by TSMC’s Arizona facility, leading to production delays.

When TSMC announced plans to build a semiconductor fab in Arizona in May 2020, the initial plan was to start construction in 2021, with production slated to begin in 2024. The second fab was announced in December 2020, with a production target of 2026.

In May of this year, TSMC’s website indicated that the first Arizona fab’s production start has been postponed to the first half of 2025, while the second fab’s production has been delayed to 2028.

As for the third fab, TSMC has not yet disclosed the start date for construction, but the official plan is to commence production by the late 2030s.

According to TSMC’s plan, the first Arizona fab will use 4nm process technology, the second fab will employ 2nm technology, and the third fab will utilize 2nm or more advanced process technologies.

• Intel Delays Construction of Ohio Project

Intel, the U.S. semiconductor manufacturer, 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.

Yet, according to a previous report by The Wall Street Journal in February, Intel has delayed its USD 20 billion chip project in Ohio due to market downturns and delays in U.S. subsidies.

Intel is set to build two new advanced fabs in Ohio, with an initial plan to begin chip manufacturing in 2025. Following adjustments, the completion of Intel’s Fab1 and Fab2 projects in Ohio has been postponed to 2026–2027, with operations expected to commence around 2027–2028.

As chip manufacturing processes advance to 3nm and 2nm, the investment required for fabs has surged, putting semiconductor companies under financial pressure. Against this backdrop, Intel has not only delayed the construction of its Ohio facility but has also made adjustments to its European projects.

Intel’s planned EUR 30 billion investment in two fabs, Fab 29.1 and Fab 29.2, in Magdeburg, Germany, was initially set to start in the second half of 2023.

However, due to delays in confirming EU subsidies and the need to remove topsoil at the construction site, Intel has postponed the start date to May 2025. Additionally, Intel has also paused its investment plans for facilities in France and Italy.

• Samsung Delays Taylor Fab Project

Initially, Samsung planned to build a semiconductor cluster in Taylor, Texas, including two advanced logic fabs and one advanced packaging facility, with up to USD 6.4 billion in U.S. subsidies.

The first of these fabs in Taylor began construction in 2022, initially scheduled to start production in 2024 with 4nm process capabilities. However, the plant may not begin operations until 2026, US local media MySA noted. This delay is likely due to a slowdown in the foundry market and delays in the disbursement of U.S. subsidies.

Meanwhile, according to reports from Tom’s Hardware and the Korean media outlet ETnews, with the delay in the construction of the semiconductor plant, Samsung may upgrade the facility’s advanced process technology from 4nm to 2nm.

This adjustment aims to enhance Samsung’s competitive edge in advanced process, positioning it more effectively against rivals like TSMC, Intel, and Rapidus.

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• [News] Nearly 40% of Major Manufacturing Projects Reportedly Face Delays under U.S. IRA and CHIPS Act
• [News] Opening of TSMC Kumamoto Plant Nears, Yet Delay in Arizona Plant – Why is US Semiconductor Fab Construction Lagging Globally?

(Photo credit: TSMC)

In August 2022, U.S. President Joe Biden signed the “Inflation Reduction Act” and the “CHIPS and Science Act,” providing over USD 400 billion in tax incentives, loans, and grants. However, according to a report from Financial Times, about 40% of the investment projects under these acts have been delayed or put on hold.

In the first year after these laws were implemented, companies announced investment projects totaling USD 220 billion. However, among these projects, around USD 84 billion of investment has now been delayed by anywhere from two months to several years, with some even being indefinitely postponed.

Notably, TSMC has delayed the mass production schedule for its second plant in Arizona by two years. The foundry giant’s local suppliers, such as Chang Chun Group, have also postponed a USD 300 million factory investment project by two years, while KPCT Advanced Chemicals has put its USD 200 million project on hold as well.

Other major investment projects that have been put on hold include LG Energy Solution’s USD 2.3 billion battery storage facility in Arizona, Italy’s Enel’s USD 1 billion solar panel plant in Oklahoma, and Albemarle’s USD 1.3 billion lithium refining plant in South Carolina.

Industry sources cited by the report reveal that the uncertainty of policies during the election year, coupled with deteriorating market conditions and slowing demand, has led the companies to alter their plans.

Specifically, the slow approval process for CHIPS Act funding and unclear rules for the Inflation Reduction Act have also hinted at delays in some investment projects.

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(Photo credit: TSMC)