TSMC's Arizona plant has surpassed Taiwan's chip yields, marking a key milestone in the U.S. semiconductor push, with significant backing from the Chips Act.
Taiwan Semiconductor Manufacturing Co. (TSMC) has achieved a major breakthrough at its first semiconductor plant in Arizona, with early production yields surpassing those of similar facilities in Taiwan. This marks a significant milestone for the U.S. expansion of the world’s largest contract chipmaker, which is a key player in Washington’s efforts to revitalize domestic semiconductor manufacturing.
TSMC’s Arizona chip yields have now surpassed those of its Taiwan plants, marking a major breakthrough for the US expansion project, per Bloomberg. pic.twitter.com/UWy6OXcOUF
— TFTC (@TFTC21) October 24, 2024
According to Rick Cassidy, president of TSMC’s U.S. division, the Arizona plant’s chip production yield is about four percentage points higher than the company’s factories in Taiwan. This success, confirmed in a recent webinar, underscores TSMC’s strong manufacturing capabilities despite earlier delays and labor-related challenges at the Arizona site.
TSMC, which manufactures chips for tech giants such as Nvidia and Apple, has been working closely with the U.S. government and stands to benefit from $6.6 billion in grants and $5 billion in loans under the 2022 Chips and Science Act. In addition to these funds, the company may also receive 25% tax credits to support the construction of three semiconductor fabrication plants in Arizona.
Speaking about the company's progress, TSMC Chief Executive Officer C.C. Wei highlighted the importance of the Arizona plant’s success. “Our first fab entered engineering wafer production in April with 4-nanometer process technology, and the result is highly satisfactory, with a very good yield,” Wei said during a recent call with investors. This demonstrates that TSMC can deliver the same high-quality manufacturing in the U.S. as in Taiwan.
The Arizona plant had previously encountered difficulties, including labor shortages and safety concerns. As a result, the timeline for the plant’s full production was pushed from 2024 to early 2025. Despite these challenges, the plant's recent success has raised hopes for further U.S. expansion, with the potential for as many as six fabs to be built at the Phoenix site, pending further government support.
TSMC’s success in Arizona is notable in contrast to the struggles faced by other key players in the Biden administration’s semiconductor strategy. Intel Corp., another beneficiary of the Chips Act, has faced significant financial pressures, delaying global projects, and exploring asset sales. Samsung Electronics has also encountered hurdles in its U.S. expansion efforts.
As the semiconductor industry remains at the center of global supply chain challenges, TSMC's advancements in the U.S. represent a significant step forward in securing a stable supply of advanced chips domestically. The company’s ability to meet the high production standards in its Arizona facility bodes well for future semiconductor production in the U.S., as the nation looks to reduce reliance on foreign manufacturing.
