Later today, Apple CEO Tim Cook will be attending a celebratory event for the upcoming TSMC Arizona chip plants in Arizona. We’re now learning a little more about the company’s plans, including a tripling of the original investment.
However, it’s becoming even clearer that US-made chips are never going to rival those TSMC makes in its home country, Taiwan …
Background
The Taiwanese Semiconductor Manufacturing Company (TSMC) announced back in 2020 that it would be building a $12B chipmaking plant in Arizona. Construction of the main chip facility was completed in August, with production scheduled to begin in 2024.
It has so far been unclear whether the plant would make Apple chips. Apple helped lobby for subsidies for the plant, suggesting that this was indeed the plan. Others doubted this as the planned 5nm process would be too far behind Apple’s curve for its A-series and M-series processors. A later report suggested that the plant would instead use a 4nm process, but this would still lag behind Apple’s reported plans to switch to 3nm a year before production is scheduled to start.
TSMC subsequently confirmed plans for an additional 3nm plant, but again Apple is expected to have moved onto 2nm processes by the time this one opens.
However, Bloomberg has reported that the plants will make some chips for Apple, just not A-series and M-series processors, and probably not significant quantities of even legacy chips. That is set to become official when Cook attends today’s event.
More investment in TSMC Arizona chip plants
The Financial Times reports that TSMC is set to announce that it is tripling its investment in the US plants.
Taiwan Semiconductor Manufacturing Company will more than triple its investment in the US state of Arizona to $40bn, as geopolitical tensions put pressure on the world’s largest contract chipmaker to step up diversification of its production facilities.
But will never make latest A-series or M-series chips
While much of the report echoes things already known, it does appear to answer one question: Will TSMC ever bring its most advanced chipmaking tech to the US? The answer, according to an FT source, is: no.
“TSMC’s US presence will continue to follow the principle of N minus 1,” said a person close to the company, indicating that any US fab would be one technology generation behind the most advanced in production in Taiwan.
This means that when the company’s Taiwan plants are making 3nm chips, the Arizona ones will remain limited to 4nm. When Taiwan moves on to 2nm, Arizona will move onto 3nm. If confirmed, this means that it will never be possible for Apple’s latest A-series and M-series chips to be made in the US, even in limited volumes.
Additionally, the limited outputs will mean that even for legacy chips, the plants won’t much reduce Apple’s exposure to Taiwan.
“This won’t insulate customers [from supply chain risk] in case of a full Taiwan disruption,” said another chip industry expert who asked not to be named. The person said a larger TSMC fab in the US would allow its customers to plan and prepare for having chips made to their designs there and thus cutting “recovery time” in case Taiwan-based capacity is lost. Shifting chip production to a different fab can take many months.
We’ll of course bring news from the event later today.
Update: The word ‘latest’ was inserted following Tim Cook’s statement, to clarify that it is only the most advanced Apple chips which cannot be made in Arizona.
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