A large Microchip Wafer logo and the letters TSMC are crowned on top of a newly completed 3.5 million square foot building on 1,100 acres in the Arizona desert north of Phoenix.
British Semiconductor Arizona’s first wafer fabrication plant is making history as it is the most advanced state-of-the-art chip fabrication plant in the United States and apple has committed to be the site’s largest customer.
CNBC first visited the factory in 2021, shortly after TSMC broke ground. TSMC initially announced that the factory would cost $12 billion and produce 5-nanometer wafers by the end of 2024.
Instead, the factory is conducting trial production, making sample wafers and sending them to customers for verification. TSMC has committed to building two more wafer fabs here by the end of this century, with a total investment of US$65 billion.
During an exclusive first tour of the completed fab in November, TSMC Chairman Rick Cassidy told CNBC that the project was “pretty much on schedule.”
“When we came to the United States, we knew we were going to go through a learning process,” Cassidy said. “Whether it’s allowed or not, learning how to work with industry, learning how to work with unions, local labor laws. We’re constantly learning a lot. Now we’ve overcome that.”
On November 7, 2024, TSMC Chairman Rick Cassidy led CNBC’s Katie Tarasov to visit its newly completed wafer factory, which will produce advanced chips in the United States for the first time.
Andrew Evers
With the help of about 2,000 employees, the plant will produce more advanced wafers than originally planned. TSMC said the factory will produce 4-nanometer wafers at a rate of 20,000 wafers per month.
Wafers cost up to $18,000, according to one company Morgan Stanley reports. Their prices continue to rise, taking away TSMC’s stock value and its in the past few years.
Daniel Newman, CEO of Futurum Group, said: “We have seen that TSMC can say its price and everyone will pay that price because what is needed now is reliability and quality.”
“Be on an equal footing with Taiwan compatriots”
Cassidy said the fab’s output is expected to be “on par with our Taiwanese compatriots.” Despite this, about 92% of the world’s most advanced chips are currently produced in TSMC’s Taiwan factories, so the United States is far from being self-reliant.
“It would be difficult or impossible for the United States or any country to become completely self-sufficient in everything needed to make semiconductors,” said Stacy Rasgon of Bernstein Research. “That’s a pipe dream. “
Although the United States was the birthplace of microchips in the 1950s and remains a top chip design center, its manufacturing only 10% chips in the world, but not the most advanced chips. Supply chain disruptions during the pandemic collided with booming demand for consumer electronics, and the resulting chip shortage exposed the huge risks of relying on outside suppliers for such critical technology.
If there were an invasion, earthquake, or other event between China and Taiwan that affected Taiwan for a period of time, “the entire market, the entire world, could be affected by the lack of available frontier nodes,” Newman said.
one Deadly magnitude 7.4 earthquake In April, production in Taiwan was briefly halted, resulting in $92 million in losses For TSMC. Cassidy said Arizona’s buildings are “well prepared” for earthquakes.
TSMC’s first wafer fab in Arizona, pictured here, will be completed in November 2024 and will produce advanced chips in the United States for the first time.
British Semiconductor
Other concerns surfaced as President-elect Donald Trump was elected express objection He approved the $52 billion CHIPS Act in October during his campaign. A few weeks later, the U.S. Department of Commerce finalized TSMC allocated $6.6 billion from the bipartisan bill.
“Repealing the CHIPS Act will make Americans less safe,” U.S. Commerce Secretary Gina Raimondo said in an interview with CNBC, adding that she didn’t think the incoming administration would abolish it.
“I just don’t think they’re going to do it,” Raimondo said.
Negotiations with TSMC to bring advanced chip production to the United States began in 2018 during Trump’s first term.
“I had a phone call between the chairman of TSMC and the head of Apple,” said then-Commerce Secretary Wilbur Ross. “Apple was very supportive of TSMC coming.”
Rose Castanares, a 26-year company veteran and current president of TSMC Arizona, was also involved in early conversations. Castanares said customers “want elasticity in supply.”
Reliance on Asian chips also complicates U.S. efforts to pursue technological dominance. That’s why President Joe Biden has imposed a complex web of export controls on the chip industry aimed at preventing China from gaining a lead in advanced technology.
In October, some TSMC chips Found in Huawei devicesThis is despite a ban on sales to the Chinese company.
“This problem has been around for a long time,” Newman said. “A lot of complex routing is required in order to move goods to the gray market in different countries that have limited access to leading or state-of-the-art technology.”
On November 7, 2024, TSMC Arizona President Rose Castanares and CNBC’s Katie Tarasov were in the newly completed factory, which will be the first time TSMC will conduct production on American soil. Produce advanced chips.
Andrew Evers
workers, water and electricity
Near Chandler, Arizona, Intel Two huge fabs are also being built.
The U.S. company has a very different business model, designing and manufacturing its own chips, while TSMC only produces chips for other companies. Cassidy said the relationship between the two companies is strong.
“We meet with (Intel) every week and the feedback is that we are helping them improve their rankings,” Cassidy said. “We’re helping them get state-of-the-art training, so I think they’re very happy with what we’re doing.”
Both companies have Delay Schedule for full production at new Arizona facility. But TSMC remains the undisputed leader in advanced chips, while Intel falling again and again.
The two will also compete for the U.S. chip industry’s scarce resource: workers.
“When we finish building this factory, it will really be the first advanced manufacturing factory built in the United States in at least 10 years. Semiconductors are a very, very difficult technology,” TSMC’s Castanares said. “This experience doesn’t exist in the United States.”
In the early stages of the plan, TSMC sent about 600 engineers to Taiwan for training. Beginning in 2021, Process Integration Engineer Jeff Patz worked there for 18 months.
“The goal is to actually make things, right? And understand how they are made,” Patz said. “You have to have a kitchen to cook.”
TSMC has also brought in experts from Taiwan for a three-year temporary assignment. TSMC plans to employ at least 6,000 workers when all three fabs are completed.
“For engineers, we are actively recruiting at universities in Arizona and across the United States,” Castanares said. Arizona State University “even has what they call TSMC Day.”
Water is another scarce resource that requires large amounts.
Taiwan is currently facing its worst drought this year nearly a centuryTSMC is no stranger to recycling the vast amounts of water needed to make chips. TSMC will consume 4.7 million gallons of water per day to operate the first Arizona fab, but it will reduce that need to 1 million gallons per day, in part by recycling about 65% of that water, the company said.
Manufacturing wafers also requires large amounts of electricity.
TSMC built solar on site, but it was not enough to meet the 2.85 gigawatt hours per day needed to operate the first fab. This equates to approximately the power used 100,000 American households. TSMC said it is purchasing renewable energy credits to offset the impact. But amid the data center boom fueled by artificial intelligence, Arizona’s largest utility warns it could Transmission capacity exhausted before the end of the decade.
At the same time, TSMC also plans to start production at its third factory in Arizona, which Cassidy said “may use a 2-nanometer or more advanced process.”
TSMC is also expanding its global footprint. it opens its Japan’s first wafer fab In February, construction of an $11 billion German wafer fab broke ground in August.
In the United States, TSMC is also likely to continue expanding, Cassidy said.
“There’s enough room here for a lot of fabs,” Cassidy said.
Watch the full video for never-before-seen footage from inside TSMC’s Arizona fab: https://cnbc.com/video/2024/12/12/inside-tsmcs-new-chip-fab-where-apple-will-make- American chip
