Taiwan Semiconductor Manufacturing Co., Ltd.’s first plant in Arizona achieved initial production yields that exceeded similar plants in its home country. This is a major breakthrough for the U.S. expansion project, which was initially plagued by delays and worker conflicts.
The percentage of usable chips produced at TSMC’s facility in Phoenix is about 4 percent higher than at a comparable facility in Taiwan, according to participants, Rick Cassidy, president of TSMC’s U.S. division, said in a webinar Wednesday. told listeners. Success rate, or yield, is an important measure in the semiconductor industry because it determines whether a company can cover the huge costs of a chip factory.
The achievement marks progress in Washington’s efforts to revitalize U.S. semiconductor manufacturing. TSMC, a major chip manufacturing partner of Nvidia Corp. and Apple Inc., will receive $6.6 billion in government grants and $5 billion in loans, plus an additional 25%, to build three manufacturing facilities, or fabs, in Arizona. The company plans to earn a tax credit of This award, like nearly all other Chips and Science Act awards in 2022, has not yet been finalized.
A TSMC spokesperson declined to comment directly on Cassidy’s event, instead pointing to comments made by CEO CC Wei on a conference call with investors last week.
“Our first factory started producing engineering wafers using 4-nanometer process technology in April. The results were very satisfactory and yields were very good,” he said at the time. “This is a significant operational milestone for TSMC and our customers and demonstrates TSMC’s strong manufacturing capabilities and execution capabilities.”
Two other chipmakers at the center of the Biden administration’s high-tech strategy, Intel and Samsung Electronics, have struggled in recent months. Intel, which is set to be the chip law’s biggest beneficiary, is under such severe financial pressure that it is delaying global projects and considering selling assets.
On the other hand, TSMC is doing well. The company’s stock hit a record high this month after the company beat quarterly estimates and raised its sales growth target for 2024.
This yield improvement is notable for TSMC, as the company has historically maintained its most advanced and efficient factories in its home base of Taiwan. The Arizona location got off to a rocky start, as the company couldn’t find enough skilled staff to install advanced equipment and workers struggled with safety and management issues. TSMC reached an agreement with the construction union late last year.
The company originally planned to begin full production at its first factory in Arizona in 2024, but pushed back that goal to 2025 due to labor issues. The company subsequently postponed the start of operations for the second factory from the original target of 2026 to 2027 or 2028. This raised concerns that the company would not be able to manufacture chips as efficiently in the United States as it could in Taiwan.
Cassidy cited early conversations in Washington regarding the second chip law, saying TSMC is now keen to further expand its presence in the US, relying in part on the possibility of further government support. He added that there is a possibility. In total, the Phoenix complex has room for at least six fabs.
Wei expressed optimism about the U.S. push during a phone conversation last week.
“We currently plan to begin mass production in our first factory in early 2025, and we are confident that our Arizona facility will provide the same level of manufacturing quality and reliability as our Taiwan facility.” he said.
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