Taiwan Semiconductor Manufacturing Co. has achieved early production yields at its first Arizona plant that exceed similar factories back home, a major breakthrough for a U.S. expansion project initially plagued by delays and labor conflicts.
The proportion of usable chips produced at TSMC’s Phoenix facility is about 4 percentage points higher than comparable facilities in Taiwan. Rick CassidyPresident of TSMC’s US division told listeners on a Webinar Wednesday, according to a person who attended. Success rate, or yield, is a crucial metric in the semiconductor industry because it determines whether companies are able to cover the enormous costs of running a chip factory.
The success is a sign of progress in Washington’s efforts to revive American semiconductor production. TSMC, Nvidia Corp.’s main chip manufacturing partner. and Apple Inc., is on track to receive $6.6 billion in government grants and $5 billion in loans – plus 25% tax credits– the construction of three manufacturing facilities or factories in Arizona. The award, like almost all others, comes from 2022 Chips and Science Actis not yet completed.
A TSMC spokesman declined to comment directly on Cassidy’s incident, citing CEO CC Wei’s comments on a call with investors last week.
“Our first factory started technical wafer production in April using 4-nanometer process technology, and the result is extremely satisfactory, with a very good yield,” he said at the time. “This is an important operational milestone for TSMC and our customers and demonstrates TSMC’s strong manufacturing capabilities and execution.”
The two other chipmakers at the center of the Biden administration’s technology strategy, Intel Corp. and Samsung Electronics Co., have struggled in recent months. Intel, considered the biggest beneficiary of the Chips Act, is under so much financial pressure that it is doing this delay global projects and think sell out Assets.
TSMC, meanwhile, has seen a resurgence. Its shares hit a record high this month after the chipmaker beat quarterly estimates and increased its revenue growth target in 2024.
The recent earnings growth is notable for TSMC, as the company has historically had the most modern and efficient facilities in its home island of Taiwan. The start at the Arizona site was difficult because the company could not find enough qualified personnel to install modern equipment and workers faced problems Security and management issues. TSMC reached one accordance with construction unions at the end of last year.
The chipmaker had originally planned to begin full production at its first Arizona plant in 2024, but pushed back the target by 2025 because of labor issues. It later delayed The start date for its second factory has been pushed back to 2027 or 2028 from an original target of 2026. That raised concerns that the company might not be able to produce chips in the U.S. as efficiently as it does in Taiwan.
TSMC may now be interested in further expanding its U.S. presence, depending in part on the possibility of greater government support, Cassidy added, pointing to early discussions in Washington about a second Chips Act. There is space for a total of at least six factories in the Phoenix complex.
Wei expressed optimism about the U.S. push during the call last week.
“We now expect mass production of our first factory to begin in early 2025 and are confident that our Arizona factory will deliver the same level of manufacturing quality and reliability as our factories in Taiwan,” he said.
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