As the U.S. Department of Commerce finalizes subsidies for Intel and TSMC, the two major semiconductor manufacturers will enter a new competitive landscape in the United States.

In preparation for these new challenges and with the first fab trial production imminent, sources cited by a report from Liberty Times has revealed that TSMC will dispatch Vice President of Manufacturing Operations, Arthur Chuang, to oversee the Arizona site in May. He will collaborate with TSMC’s vice president of fab operations Dr. Y.L. Wang, signaling TSMC’s accelerated efforts to establish and produce at U.S. fabs concurrently, aiming to achieve a competitive advantage in advanced manufacturing processes in the United States.

Arizona Fab to Begin Trial Production of 4,000 Wafers by Month’s End

Following the confirmation of subsidies for Intel and TSMC by the U.S. Department of Commerce, subsidies for Samsung are also rumored to be announced soon. Industry sources cited in the report from Liberty Times believe that the United States, through these subsidies promoting domestic chip manufacturing and with major clients gathering, will become the primary battlefield for investment in advanced manufacturing processes.

However, with high production costs and the need to rebuild supply chains, TSMC has adjusted its strategy following a series of setbacks at its first fab. After more than a year of installation work, the fab is nearing completion and preparing to embark on a new phase with trial production of approximately 4,000 wafers using 4-nanometer processes by the end of this month. The target is to ramp up production by the first half of 2025, making this facility the most advanced semiconductor fab in the United States.

TSMC’s U.S. fab is facing new challenges as it continues to build and produce concurrently. According to the same report citing industry sources, unlike the previous director-level executive overseeing operations at the U.S. fab, TSMC will be assigning a vice president-level executive to lead the site, with experienced fab construction veteran Arthur Chuang slated for a long-term assignment in the United States starting in May.

Arthur Chuang holds a Ph.D. in Civil Engineering from National Taiwan University and joined TSMC 35 years ago as an equipment engineer. He transitioned to fab operations over 25 years ago and has overseen the construction of nearly 20 fabs, including Fab 15 in Tainan, Fab 18 in Southern Taiwan, and the advanced 2-nanometer fab sites in Hsinchu and Kaohsiung.

TSMC’s second semiconductor fab in the United States is currently under construction, with plans announced on April 8th to commence production of next-generation 2-nanometer process technology in 2028. Additionally, a third fab is scheduled to begin mass production of 2-nanometer or more advanced process technologies by the end of 2030.

The total area of TSMC’s U.S. fab is 1,100 acres, which is more than half of its area in the Hsinchu Science Park. Estimates from the supply chain suggest that this site could accommodate up to six fabs, indicating that TSMC’s expansion plans may go beyond just building a third fab. If collaboration with U.S. partners proceeds smoothly, further expansion is also possible in the future.

TSMC’s Kumamoto Fab Phase 2 to Commence Construction by Year-End, Production Set for 2027

Additionally, TSMC’s Japan Kumamoto Fab (JASM) announced yesterday that its Phase 2 facility will be located adjacent to Phase 1 on the east side, covering an area of approximately 320,000 square meters, which is about 1.5 times the size of Phase 1. Construction is scheduled to commence by the end of this year, with production expected to start by the end of 2027.

TSMC is scheduled to hold an earnings call on April 18th, and ahead of the conference, positive news has emerged regarding the new US fab. It is anticipated that the related topics will also be the focus of attention on the day of the conference.

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• [News] TSMC Receives USD 6.6 Billion for Chipmaking from the US Government, Commits to Constructing Third Fab
• [News] TSMC’s US Fab Reportedly Eyeing for Early Mass Production

(Photo credit: TSMC)

Following grants to Intel and TSMC, the US administration reportedly plans to announce next week a USD 6 to 7 billion subsidy to Samsung for constructing a semiconductor fab in Taylor, Texas, aimed at increasing chip production capacity.

According to sources cited by Reuters, this funding initiative, set to be announced by U.S. Commerce Secretary Gina Raimondo, will back four projects at Samsung’s site in Taylor, Texas. These projects include a previously disclosed USD 17 billion chip manufacturing plant, along with an additional plant, an advanced packaging facility, and a research center.

Furthermore, the plan involves Samsung’s investment in another undisclosed location. As part of the deal, Samsung’s investment in the U.S. is projected to more than double, exceeding USD 44 billion.

In 2022, the U.S. Congress passed the CHIPS and Science Act, allocating USD 52.7 billion for research and manufacturing grants, alongside USD 75 billion in government loans, aimed at boosting American semiconductor production and reducing reliance on China and Taiwan. As per the Semiconductor Industry Association (SIA), the U.S. share of global semiconductor manufacturing capacity declined from 37% in 1990 to 12% in 2020.

Samsung is poised to become the third-largest recipient of subsidies under the semiconductor act, following TSMC. The US administration is set to provide USD 6.6 billion in aid to TSMC, which plans to build a third chip plant in Arizona with a total investment of USD 65 billion.

According to the latest information released by TSMC, Arizona’s first fab is on track to begin production leveraging 4nm technology in 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 third fab will produce chips using 2nm or more advanced processes, with production beginning by the end of the decade. Each of the three fabs, like all of TSMC’s advanced fabs, will have cleanroom area approximately double the size of an industry standard logic fab.

Previously, the U.S. government announced that Intel would receive USD 8.5 billion in federal subsidies and USD 11 billion in loans. Intel is planning to invest USD 100 billion across four states in the U.S. for building and expanding fabs, and is also seeking an additional USD 25 billion in tax credits.

Regarding the rumored subsidy to Samsung, the U.S. Department of Commerce, Texas Governor Greg Abbott’s office, and Samsung have declined to comment on the matter.

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• [News] TSMC Receives USD 6.6 Billion for Chipmaking from the US Government, Commits to Constructing Third Fab

It’s reported that TSMC’s new fab in Arizona, USA, is rushing to conduct the trial production of its first production line by mid-April and aims to complete all preparations for mass production by the end of this year. According to a report from the Economic Daily News, if everything goes smoothly, there is a chance that the original schedule for mass production in the first half of 2025 at the new US fab could be advanced to the end of 2024.

Regarding these rumors, TSMC stated on April 1st that the progress of the Arizona fab is proceeding according to plan, and for relevant information, please refer to the company’s official announcements.

TSMC is scheduled to hold an earnings call on April 18th, and ahead of the conference, positive news has emerged regarding the new US fab. It is anticipated that the related topics will also be the focus of attention on the day of the conference.

In the previous earnings call, TSMC announced its plan for the new US fab to commence mass production using the 4-nanometer process in the first half of 2025. Per Economic Daily News‘ report, the company believes that once this fab begins operations, it will be able to provide manufacturing quality and reliability on par with its Taiwan fabs in Arizona.

Industry sources cited by the report suggest that TSMC’s new fab in the United States is racing to complete the setup of its first production line by mid-April and commence trial production. Based on estimations of around 6.5 months from trial production to mass production, with an additional month for verification, there’s a chance that all preparations for mass production could be completed by the end of this year.

Taking stock of TSMC’s presence in the United States, the company currently operates an 8-inch fab in Camas, Washington, and has design centers in Austin, Texas, and San Jose, California. The new fab in Arizona will serve as TSMC’s second production base in the United States.

TSMC’s new fab construction in the United States faced labor shortage issues, which previously led to the announcement of a delay in the production schedule until 2025. However, TSMC has been making efforts to improve the problems encountered in the new fab and is seeking the maximum official subsidy support. Earlier report from Bloomberg indicated that TSMC’s new US fab could potentially secure over USD 5 billion in subsidies from the US government, but the relevant proposal has not been finalized.

TSMC announced the expansion of its investment in the new US fab in December 2022. Construction of the second phase of the Arizona fab has begun, with a total investment of approximately USD 40 billion for both phases. The first phase is expected to produce 4-nanometer chips, while the second phase will produce 3-nanometer chips.

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• [News] With Rampant Plant Construction, TSMC Reportedly Expected to Revise Upward Capital Expenditure
• [News] TSMC Supply Chain Delays US Fab Setup in Line with Chip Giant’s Pace

(Photo credit: TSMC)

The US government, according to a report from Reuters, is asking allies to stop domestic companies from servicing certain chip-making tools for Chinese customers, a U.S. Commerce department official said on March 27th.

“We’re pushing for not servicing of those key components and these are the discussions we are having with our allies,” stated export controls chief Alan Estevez, as reported by Reuters during an annual conference. “We are working with our allies to determine what is important to service and what is not important to service,” hinting that the US is not proposing restrictions on non-core components that Chinese firms can repair themselves.

The recent trigger for heightened vigilance in the US was Huawei’s launch of a new 5G smartphone in August last year, equipped with domestically manufactured advanced 7-nanometer chips from China. According to a recent Bloomberg report, the chips supplied to Huawei by its partner SMIC are manufactured using equipment from US suppliers such as Applied Materials and Dutch company ASML.

Since then, the US has reportedly been increasing pressure on allies such as the Netherlands, Germany, South Korea, and Japan, urging them to further tighten restrictions on China’s access to advanced chip technology.

Additionally, the US has restricted equipment suppliers like Applied Materials from providing maintenance services for entities in China subject to sanctions. However, neither the Netherlands nor Japan has implemented similar maintenance bans on their domestic companies, prompting the US to encourage allied firms to follow suit.

Gina Raimondo, the US Secretary of Commerce, previously responded by stating that the US will take “as strong and effective action as possible” to uphold national security interests.

Companies that have been listed on the Entity List by the US Department of Commerce include Huawei, SMIC (Semiconductor Manufacturing International Corporation), and Shanghai Micro Electronics. Additionally, China’s other major memory manufacturer, Yangtze Memory Technology Corp, was added to this restriction list in 2022.

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• [News] US Government Considers Adding ChangXin Memory Technologies to Entity List, Imposing Further Sanctions on Chinese Firms
• [News] US Considers Sanctioning Huawei-Linked Chinese Chip Network, Huawei-Related Enterprises Blacklisted

(Photo credit: iStock)

SK Hynix is rumored planning to build an advanced packaging fab worth USD 4 billion in West Lafayette, Indiana. According to a report from The Wall Street Journal, it is expected to commence operations by 2028, creating up to 1,000 job opportunities. This initiative may receive support in the form of state and federal tax incentives.

As reported by The Wall Street Journal and Tom’s Hardware, SK Hynix’s investment aims to enhance its capabilities in advanced semiconductor packaging, with a particular emphasis on manufacturing High-Bandwidth Memory (HBM).

Considering a potential capital expenditure of USD 4 billion for the construction, per Tom’s Hardware, if the project proceeds, it will become one of the largest advanced packaging facilities globally. Hence, government support is crucial, with expectations of tax incentives from both state and federal levels in the US.

SK Hynix, a supplier of HBM memory for NVIDIA, is eyeing enhanced capabilities in advanced chip packaging, particularly crucial for manufacturing HBM. The recent NVIDIA Blackwell B200, with each GPU utilizing 8 HBM3e chips, has also underscored SK Hynix’s role in the critical components supply chain for the AI industry.

The recent CHIPS and Science Act allocated USD 8.5 billion to Intel, enhancing US semiconductor competitiveness. SK Hynix’s plan to build a fab in Indiana is a significant stride, fostering US semiconductor growth.

However, US subsidies for chip manufacturing and packaging have been slow, with only three American companies currently benefiting, including BAE Systems, GlobalFoundries, and Microchip Technology.

Reportedly, SK Hynix’s plan remains more of an intention statement than a finalized deal, and whether it proceeds to the construction phase remains to be seen.

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• [News] SK Hynix Reportedly Invests USD 1 Billion in Advanced Packaging to Strengthen HBM Chip Leadership
• [News] SK Hynix Rumored to Propose Collaboration with Kioxia for HBM Production in Japan

(Photo credit: SK Hynix)